announcement of a 10 percent year-on-year decline in Auckland’s April dwelling
consents and fall in the total number of new homes completed in the last
quarter reinforces the importance of urgently implementing the Government’s
Urban Growth Agenda,” says Stephen Selwood CEO of Infrastructure New Zealand.
“The 1043 homes
consented in April 2019 was down from 1163 in April 2018, according to recent
data released by the Auckland Council’s Research and Evaluation Unit.
“These numbers confirm
strong anecdotal evidence coming from the infrastructure and development sector
of a slowing in the market.
“Of the 13,754 homes
consented, three quarters were actually certified as being completed in the
“While up on the
preceding rolling twelve months, the total number of certificates of completion
dropped from 10,637 in December 2018 to 10,195 in April 2019.
“This leaves the region
shy of delivering the 14,000 homes per year it needs to stay on top of
“The total number of
dwellings delivered each year now needs to be closer to 20,000 for the next
decade if the region is to build the almost 50,000 homes the council estimates
Auckland is short.
“It is disappointing,
but not surprising, that the market has now turned, just at the point at which
consents were almost meeting demand for the first time in a decade.
“Lack of competitively
priced land supply means that it is almost impossible for housing to ever meet
demand. Each time it comes close, house prices begin to flatten out and
developers are forced to cut output or sell new homes below cost.
“Supply drops while
industry waits for the market to recover and more people get pushed onto the
unfortunate side-effect is that many misinterpret slowing supply as a signal
that there is no longer demand in the system.
“That of course is
untrue. There continues to be an enormous demand for homes priced less than
“Half of Auckland’s
households earn less than $100,000 per annum. They need homes at
$300,000-$500,000, not $600,000 plus. Last year in Auckland, only 5% of house
sales were within this price bracket.
“It’s not just
Auckland. Tauranga is just months away from housing system failure. Queenstown
cannot accommodate its workforce.
“The Government’s Urban
Growth Agenda is a key part of the solution. Releasing land and providing the
tools to fund and finance infrastructure to unlock that land for housing is
exactly what is required.
“The Government can
either do this in a targeted way to align developments with transport
corridors, or give the market full flexibility but create risks around
transport misalignment. If it moves now to secure partnerships with land owners
around strategically located land near public transport corridors, it can both
improve housing supply and reduce congestion.
rezoning rural land adjacent to rail and enabling infrastructure, residential
and commercial development at scale will create value that can be passed on to
homeowners in the form of affordable house prices.
“But acting now is
imperative before the market softens further and builders pack up tools and
move to Australia.
“The speed at which the
Urban Growth Agenda is being implemented is a growing concern. This is the
Government’s year of delivery and if it waits any longer before unlocking
affordable land supply there is a very high likelihood in a return to rapid
house price inflation, and growing homelessness.
“It is urgent that the
Government acts now. The policies are there. They need to be implemented,”
For further information and comment contact
Stephen Selwood on 021 791 209