Housing shortfall 25,000 by 2018

The Auckland Council's Housing Project Office (HPO) has estimated the city's housing shortfall could rise rapidly to 25,000 dwellings in 2018. Photo / File

Minister Nick Smith admits shortage but warns of uncertainties in latest estimates.

Housing Minister Nick Smith says the construction of new homes in Auckland is increasing as fast as possible after new analysis warned that Auckland's housing shortage could last for more than a decade.

The Auckland Council's Housing Project Office (HPO) has estimated the city's housing shortfall could rise rapidly to 25,000 dwellings in 2018, compared with present estimated levels of roughly 15,000.

The organisation - which was set up two years ago in response to Auckland's housing crisis - calculated that the shortage would not fall back to existing levels until 2025.

Dr Smith agreed that Auckland had a housing shortage, while noting that there were a large number of uncertainties in the analysis.

"What we know is right now there is a shortage and we need to pull out all stops to grow supply as quickly as we can," he told the Herald.

On the issue of dwelling consents, he said: "We're not fast enough. But the advice from officials is that the housing sector in any economy, even in Christchurch under the emergency situation, has not been able to grow by more than 20 per cent compound."

Dr Smith said dwelling consents had grown by this margin in each of the past four years.

It was difficult to grow any faster because of capacity within the construction workforce.

The Christchurch rebuild was not expected to peak until 2017, and the city was absorbing a large proportion of the builders who were needed to increase supply in Auckland. Dr Smith said the residential part of the rebuild was now slowing, and companies were transferring their workers to the North Island.

The HPO's estimates about the shortfall emerged as QV data showed Auckland's average house values were rising by $511 a day, driven by migration and lack of supply.

QV national spokeswoman Andrea Rush said that as long as demand continued to outstrip supply it was likely that home values would continue to rise.

"There's still not enough existing stock or new homes being built, to accommodate the demand for housing in Auckland and building consents are not increasing in the Auckland region currently."

The HPO emphasised the shortfall depended strongly on shifts in migration levels and construction rates.

It assumed medium population growth, an increase in consenting rates, and that 80 per cent of homes which were consented would be built. Dr Smith said the analysis appeared to understate the proportion of consents which turned into houses.

He had been advised that 98 per cent of approved consents translated into dwellings.

The HPO's analysis was more conservative than recent estimates by the Productivity Commission, which reported an existing shortfall of 32,000 homes in Auckland.