Auckland housing gap: 18,000 homes

Nick Smith says the Government still has some shots to fire in the fight against rising house prices with new initiatives to be announced soon. Photo / NZME.

Housing Minister says new initiatives will be announced soon

Auckland's housing crisis will not be solved even if the Government's ambitious forecasts for residential construction are achieved, official documents show.

But Building and Housing Minister Nick Smith says the Government still has some shots to fire in the fight against rising house prices with new initiatives to be announced soon.

A Ministry of Business Innovation and Employment's (Mbie) post election briefing to Dr Smith estimates the shortage in Auckland at 18,000 dwellings and says it is likely to increase.

"The recent surge in net migration means that new supply - despite the recent increases - is still less than needed to meet growing demand."

With initiatives including a fast-tracked consenting process through Special Housing Areas and also its Homestart first home assistance programme, the Government says it is boosting residential building activity.

The National Construction Pipeline report estimates 61,400 new dwelling consents will be issued in Auckland between 2012-2018.

Labour's housing spokesman Phil Twyford said the expected supply of news homes closely matched anticipated new demand for houses as Auckland's population grows as detailed in Census forecasts. That would make little impact on the existing shortfall.

Mbie officials noted: "In Auckland ... the accumulated housing shortage that built up following the global financial crisis and ongoing population pressures are likely to mean continuing price increases, albeit at a slower rate."

Mr Twyford said even on the Government's own figures, "their efforts to fix the Auckland housing crisis are an epic fail".

"Even if they meet their own heroic projections over the next five years, they're not going to put a dent in that shortfall of 18,000 and that's why their own officials are predicting that Auckland house prices will continue to rise.

"Whichever way you slice it, under current policy settings there isn't a hope in hell they're going to fix the Auckland housing crisis.

"The obvious solution is actually for the Government through a policy like KiwiBuild to roll up its sleeves and actually build large numbers of houses."

But Dr Smith questioned the accuracy of National Construction Pipeline and Census numbers.

He said the National Construction Pipeline numbers were only a snapshot of activity currently on building firms' books. Much of the activity which would occur over the second half of the six-year period would not have been captured.

Dr Smith also said the Census estimates of how many new households would be formed in Auckland in coming years was based on assumptions about the number of people per household based on national averages.

However, given that households tended to be larger when house prices and rents were higher it was likely Statistics NZ had overestimated the number of new households and housing demand.

There was "no question that the broad consensus of these reports is that the Auckland housing market is going to remain tight - that is not in dispute".

Dr Smith refused to give any detail to support housing supply in Auckland but said those further steps would be announced "in a matter of weeks, rather than months".

The numbers

18,000
dwellings. Estimated current shortfall in Auckland housing.
61,400
new dwelling consents in Auckland 2012-2018.
58,596
estimated increase in Auckland households 2012-2018.