Auckland's housing shortage won't peak for three years

Auckland's housing shortage might not peak for another three years and could last for more than a decad. Photo / Glenn Jeffrey

Auckland's housing shortage might not peak for another three years and could last for more than a decade, new analysis shows.

The Auckland Council's Housing Project Office (HPO) estimates that the city's shortfall could rise rapidly to 25,000 homes in 2018, compared to current levels of roughly 15,000.

The HPO looked at the rate of population change, the number of dwellings required, and the likely rate of consenting to estimate how many homes would need to be built between over the next 15 years.

Its analysis was based on a method used by BNZ's chief economist Tony Alexander.

Based on various estimates by central and local government and independent reports, officials estimated that the current shortfall in Auckland was 15,000 homes.

They calculated that the shortfall would continue to rise until 2018, and would not return to the 15,000 level until 2025.

By 2028, the shortfall will have reduced to 11,500.

The HPO emphasized that a number of outcomes were possible depending on the changes to migration levels and the rate of construction.

The organisation assumed "medium" population growth and that 80 per cent of homes which were consented would be built.

It also assumed consents would rise to 11,000 to 12,000 a year, compared to current levels of 8300 a year in Auckland.

Officials said consent numbers were continuing to increase and it was not unrealistic to assume Auckland could get to 12,000 dwelling consents a year by 2021.

If 90 per cent of consented dwellings were built, Auckland's shortfall could be eliminated by 2027.

The analysis was more conservative than recent estimates by the Productivity Commission, which reported an existing shortfall of 32,000 homes and said 13,000 homes would be needed each year to accommodate new growth.

Referring to the 3000-home Hobsonville development - which will take ten years to complete - the commission said 11 more Hobsonvilles were needed immediately, and then four more needed to be completed each year.

At present, record migration levels are putting pressure on the city's housing stock, prompting the National-led Government to create new incentives for migrants to settle outside the city.

Statistics New Zealand's latest annual permanent and long-term migration figures showed a record net gain of 58,300 migrants in the year to June, nearly half of whom settled in Auckland.

The Government is also attempting to increase supply through fast-tracked housing areas and through first-home deposit subsidies which were designed to encourage more development.

The HPO was formed in 2013 to deal with Auckland's housing crisis.