Auckland housing supply critics are "overstating the problem"

by Ksenia Stepanova11 Oct 2018

Auckland’s infill housing development is on the increase and KiwiBuild it set to drive the trend even further according to latest reports from CoreLogic – however, figures suggest that the new housing may still be out of reach for most New Zealanders.

Research analyst Kelvin Davidson says residential housing shortage is one of Auckland’s biggest issues, and is likely remain so for the foreseeable future. But despite no real land shortage and a large amount of new developments in the works both for standalone and town houses, affordability has still been described as ‘poor’.

Nonetheless, Davidson says the perceived lack of ongoing supply does not match up to the reality.

“Contrary to the perception that Auckland has been at a supply standstill for many years now, a huge amount of development has actually taken place,” Davidson stated. “The scale is huge compared with any other part of New Zealand and without it, the housing affordability problem in Auckland would be even worse.”

Infill development – the practice of developing underused pockets of land within existing urban areas – has been cited as a growing trend, with infill townhouses and apartments increasingly replacing smaller standalone houses. Davidson says the ‘inefficient’ use of state housing land is most evident around Mount Albert and Mount Roskill, so KiwiBuild would be well-placed to target those areas.

“But even though there are some positive factors on the supply side in Auckland, housing affordability is still poor,” he continued. “That’s despite no obvious physical shortage of land, thus the question naturally arises – why isn’t supply moving even faster?

Davidson says there are three key hurdles to developing new housing – lack of suitably priced land, lack of infrastructure to support new housing and the capacity constraints to the construction industry. Nonetheless, he says Auckland’s ‘worst critics’ are overstating the city’s supply shortfall.

“The land exists, infill housing is underway and KiwiBuild will help to speed this up,” he stated. “However, there is still a long way to go in terms of boosting the raw numbers of homes in Auckland, not to mention fixing a quality issue (e.g. poor general state of repair, lack of insulation) that clearly exists in many parts of the city.”

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