Council land rules slammed by new Commission

Photo / Paul Estcourt

A hard-hitting investigation into housing affordability has just been issued by the Productivity Commission which has criticised the system for locking out so many home buyers.

Murray Sherwin, chair of the Government's first commission inquiry, said affordable quality housing was fundamental to successful communities yet the numbers of people forced to rent was rising.

"And it's abundantly clear that for younger people and those on lower incomes, there is a missing step on the property ladder, particularly in Auckland. The chances of them ever purchasing their first home are decreasing," Sherwin lamented.

The commission called for urgent action to free up more land for housing in high-growth areas of Auckland, Tauranga, Hamilton and Christchurch.

Read the report here.

The report showed building Auckland houses was far more expensive than those in Melbourne and on the Gold Coast.

In one of its most controversial moves, the commission wants to send Auckland Council back to the drawing board over the draft 30-year spatial plan for the city to force more people to squeeze in tighter.

It also wants house consenting sped up and for costs to be cut as well as calling for a re-examination of how councils charge for infrastructure.

"The commission found the current model has too much regional variation and is not transparent," the report said.

Another key recommendation is to improve productivity in the construction sector.

But the report was most critical of Auckland's smart-growth model, where Mayor Len Brown's council has proposed a "quality compact city".

Sherwin said land prices in the city now account for 60 per cent of the cost of a house so new homes tended to be top-end and not catering for first home buyers.

"No one is going to put a $150,000 home on a $300,000 section," Mr Sherwin said.

With about 400,000 extra people expected to live in the city in the next three decades, Sherwin says the current plan requires "urgent changes to accommodate what's coming down the line."

WHAT IT COSTS TO BUILD A HOUSE:

Auckland $167,271

Melbourne $118,107

Gold Coast $121,873

Source: Productivity Commission, information supplied by Fletcher Building