Statistics New Zealand’s latest report has revealed that housing consents had hit a 45-year high – and experts believe that it’s not enough to turn around house prices.
Housing consents have hit the highest level since 1974, with more than 37,000 dwellings consented. However, experts said this kind of build rate needs to be maintained and built upon for years to finally make up for the shortfall of houses across the country.
Economist Shamubeel Eaqub explained that a good year of good consents was still nowhere near enough to make up for a massive shortfall that has occurred over the years.
“You've got to fill the deficit and then keep up with population growth. We simply don't build enough houses when population growth is high or low - we persistently underbuild. Because there is still a lot of pent-up demand from that pent-up shortage people are still willing to pay a lot of money to find that place to call a home,” Eaqub said, as reported by Stuff.co.nz.
Read more: Housing consents hit 45-year high
Liz Kendall, economist at ANZ, said something must be done about the high price of land before prices actually dropped – emphasising the importance of having fundamental changes to the Resource Management Act (RMA).
“[High building] will keep house prices in check relevant to the counterfactual where they are not being built. But when you see more land being released and the price of land coming down, that's when the market will fundamentally change,” Kendall said.
Ian Cassels, veteran property developer in Wellington, aired the same sentiments, saying: “I think the electorate isn't demanding enough of its politicians. Somehow or another they are just getting let off one decade to the next.”