The Auckland Council reckons Auckland is 20,000 to 30,000 dwellings short of what it needs. The New Zealand Institute of Economic Research begs to differ, putting the shortfall at just 5000.

Census figures released last week suggests NZIER is closer to the mark.

Auckland's "usually resident" population on Census night was up 110,000 on the previous count seven years earlier - significantly slower growth than expected.

You might bump that up to 116,000 to allow for Aucklanders temporarily overseas and an under-count of around 2 per cent.


Divide by the average number of Aucklanders per dwelling - three - and the city needed 39,000 new dwellings to house the increase in its population between the two Censuses.

The actual increase in occupied dwellings, the Census found, was 34,000.

The question is whether that rate of three people per dwelling, though stable over the past three Censuses, is to some extent involuntary. The national average is 2.7.

How much of the higher rate in Auckland is young couples sharing a flat with other people when they would rather have a place of their own? Or 21-year-olds who won't leave home? Or outright overcrowding?

But even at the national average rate of 2.7 people per dwelling, Auckland has only fallen short of keeping pace with population growth since 2006 by 9000.

What else might policymakers try to rein in galloping house price inflation?

*Supply, supply, supply:
Measures to increase the availability and lower the cost of sections and to reduce the cost of building on them to, say, Australian levels are key. Local and central government are working on it but the supply-side response is liable to be slow.
The tax laws make investment in property very attractive compared with other forms of saving. It is too hard politically to do much about the family home, but a capital gains tax and/or treating landlords the same as foreign investors in terms of the deductibility of interest might burn off some demand in the auction rooms.
*Interest rates:
Mortgage rates were never going to stay at 50-year lows forever. Housing affordability is about to get a lot worse as the Reserve Bank moves to normalise interest rates. Adjusted for house price inflation mortgage interest rates will still be negative but at the margin the hit to household cashflows could curb demand.