The New Zealand Initiative has warned that the housing crisis will continue to worsen if the government does not act now as it expects New Zealand’s population to boom by 2038.
The New Zealand Initiative’s latest report, which modelled 36 scenarios, found that the number of additional dwellings needed from 2019 to 2038 is between 26,246 (low migration and low fertility) and 34,556 (medium migration and high fertility) annually under the most plausible scenarios – excluding the annual housing replacement and demolition rate and the current 40,000 undersupply calculated by Informetrics.
From 2019 to 2060, New Zealand will need 15,319 (low migration and low fertility) or 29,052 (medium migration and high fertility) additional dwellings annually, without taking into account the annual demolition and replacement rate of dwellings and the current undersupply of 40,000.
Research assistant Leonard Hong said the country has added only 21,445 net private dwellings annually to the housing stock since 1992.
“Historical data tells us that only 21,445 new houses have been built in New Zealand annually since 1992. This is nowhere near enough to accommodate our growing population,” Hong said.
Hong added that New Zealand still needs to build nearly 20,000 dwellings annually to keep up with population changes for the next 20 years, even with zero net migration.
“Policymakers should stop blaming the housing crisis on land banking investment and speculation and find policy solutions to drastically expand housing supply to keep up with demographic changes,” he continued.
Hong also expects demographic changes to impact prospects for fiscal prudence – pointing out that the number of people over 65 years would increase by at least 23% in 2060, resulting in fewer taxpayers and more pressure on working-age Kiwis to fund public services, such as healthcare and education.
“Our future is an older and larger New Zealand, and we must start preparing for it,” he said. “We need to make a growing and ageing New Zealand a liveable place for New Zealanders, and this starts by building more houses now. Otherwise, future generations will have to deal with terrible housing affordability prospects.”