It has benefitted from regulatory and structural changes
Auckland’s housing affordability has improved by some 26% in the past four years, according to Auckland Council’s latest quarterly report.
The latest Auckland Economic Quarterly report has revealed that the city’s housing market has benefitted from regulatory and structural changes – including the Auckland Unitary Plan and its zoning rule changes, a foreign buyer ban, tighter loan-to-value ratios (LVRs), tougher exchange controls in China, ongoing economic strength in the city with income growth and low unemployment, and a surge in industry capacity in the country.
Auckland Mayor Phil Goff said the results have proven their progress in addressing the city’s housing issues.
“The Unitary Plan is working as it is intended to, helping Auckland become more compact, with 94% of dwelling consents issued in the past year being within the Rural Urban Boundary,” Goff told Interest.co.nz.
“We continue to issue consents at record rates across the board, with 14,634 dwellings consented in the year to September. On this estimate, the city has been chipping away at its total housing shortfall for the past four months. While there is no single solution to Auckland’s housing issues, the improved affordability shows we are moving in the right direction.”
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David Norman, chief economist at Auckland Council, said land supply and deregulation are often seen as solutions to housing affordability. However, focusing on one factor is not enough.
“At a headline level, what causes house prices to rise is simple: not enough houses being built to meet demand for resident and in some cases non-resident demand. But investigate the detail and understanding why not enough houses are being built is more complex but much more pertinent,” Norman said.
“Against the backdrop of continued growth, Auckland has managed to achieve greater affordability in the past six years through a mix of policies and structural changes, and after comparing other cities, we know there are several differences that give us food for thought.”
“Housing remains unaffordable for many Aucklanders, and although we can’t change our geography, we are making progress on things we can influence. As we continue to tackle this challenge, it’s going to take more of this holistic, open-minded view to get the job done,” Norman concluded.
