Property editor of the NZ Herald

Did plan to solve Auckland's housing crisis work?

Auckland prices have risen steeply since 2013. Photo/Doug Sherring
Auckland prices have risen steeply since 2013. Photo/Doug Sherring

In 2013 the Government and Auckland Council signed the Auckland Housing Accord, a programme planned to solve the city's housing crisis.

Economist Rodney Dickens of Strategic Risk Analysis says "ten steps have been taken backwards" since the accord was signed.

Auckland Council referred inquiries about the scheme's success to the Government. Building and Construction Minister Nick Smith said Auckland house-building numbers had risen steeply in response to demand.

Dickens found Auckland land prices rose 52 per cent, house prices 45 per cent and building costs 36 per cent since the ambitious scheme to deal with the city's difficult housing situation.

"Following that and up until September 2016 when the original Special Housing Area legislation expired, 154 Special Housing Areas were approved that had the potential to deliver around 60,000 additional new dwelling sites.

"Since the ratification of the accord, the median Auckland section price reported by REINZ has increased 52 per cent based on the rolling six-month average that is used to smooth the at-times extreme volatility in the monthly median while the average of the median prices for all other regions increased only 22 per cent," Dickens said.

"Over the same period the average square metre cost for building new dwellings in Auckland increased 36 per cent versus a 19 per cent increase in the rest of the country based on the rolling 12-month average," he said.

House prices are up 45 per cent, he noted.

Yet the Government and council moves were aimed at easing the situation where housing is out of the reach of so many.

"The Housing Accord was supposed to 'result in increased housing supply and improved housing affordability' although it was recognised that 'improving the affordability of housing is a complex issue and requires consideration of wider issues, not all of which will be able to be addressed under this accord'," Dickens noted.

He also pointed out how few residences have been built in special areas.

"Most of the supply response driven by the SHAs is still to reach the market. This means most of any impact the SHA will have on housing affordability still lies ahead," he said.

"The extent to which section prices and new housing costs have increased since the Housing Accord was ratified means 10 steps have been taken backwards in terms of improving Auckland housing affordability before any progress has been made in getting down new housing costs.

"The National Government has introduced a range of other initiatives although I am sceptical of how much and/or how quickly they will improve Auckland housing affordability.

"Labour's proposal to scrap the urban limit and debt fund infrastructure for new greenfield and brownfield residential developments potentially offers much more hope of significantly improving Auckland housing affordability while the same issues are relevant to various degrees to most major urban centres," he said.

Nick Smith, Building and Construction Minister, says Auckland building levels are well up.

"In Auckland the number of dwellings consented during March was 20 per cent up on the previous March, to 942; the highest for March in 12 years. This isn't just a one-off; the number of consents issued for the quarter was up 8 per cent to 2254, while for the year it was up 7 per cent to 10,199.

"This is the fifth straight year of strong growth in residential construction, making it the longest and strongest building boom in Auckland history," Smith said.

An Auckland Council spokeswoman said today: "The success of the accord is based on consents for dwellings, not completed dwellings."

- NZ Herald

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