The Salvation Army said this morning that the housing crisis in Auckland was adding "incredible stress" to the day-to-day lives of many families.

The charity's annual State of the Nation report shows the housing shortage in the city worsened by a record near-4000 houses last year, as a pickup in home-building was "swamped" by a tide of new immigrants.

The report, A Mountain All Can Climb, says the city needed 11,200 new homes last year to house a population increase of 33,700 people at the region's average of three people per dwelling. But permits for only 7366 new dwellings were issued, leaving a shortfall of about 3800.

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Salvation Army social policy director Major Sue Hay told TV3's Firstline said that supply was the big issue that needed to addressed. "Land needs to be made available so that more houses can be built at an affordable price for low income people.

"There's incredible stress for people in terms of housing, the impact on their rents, the impact on their ability to feel like they are providing for their families, the constant stress of shifting. Some of our families shift six times in a year or don't know where they are living day-to-day. That adds incredible stress."

The Salvation army said, overall, the report was a "good news bad news story".

"There are some incredible positives. We are thrilled that youth culture is looking better. Youth offending is down youth employment is up. Teenage pregnancy rates continue to drop, and overall in New Zealand we are drinking and gambling less - so there are some real positives."

However, they were disappointed with domestic violence statistics, she told the programme.

"Serious violence and domestic violence is not really shifting, and a hard proportion of that violence is happening in our homes. It's an issue we need to bring out from behind closed doors and start to address as a nation."

The report, written by the army's social policy analyst and former Manukau city councillor Alan Johnson, gave the Government a "D" grade for housing in its social wellbeing scorecard.

The shortage in new housing Auckland has helped to drive the region's median house prices up 10 per cent to a record $670,000.


Median rents rose by only 5 per cent, but there were much bigger increases in many traditionally low-priced suburbs as people unable to find places to rent in higher-priced areas "spilled over" into less sought-after neighbourhoods.

Outside housing, the report found some good news as economic recovery from the recent recession flowed through into more jobs, higher incomes and dwindling welfare rolls.

The proportion of children in families on welfare may have dropped to its lowest level for 25 years, through a combination of welfare reforms pushing beneficiaries into work and more jobs pulling them in to earn higher incomes.

The number of children on welfare is historically an early indicator of child poverty levels, making it possible that child poverty may also have dropped to rates not seen for a generation.

But Mr Johnson warned that the historical link may have been weakened by increasing use of casual work and by escalating housing costs, which may leave many of those who have found work little better off than they were on benefits. "We might be finding that people are jumping from one poverty trap to another," he said.

The report estimates that Auckland's cumulative shortage of new houses over the past five years has now reached between 12,000 and 13,000.


"Over this period, Auckland has received 49 per cent of New Zealand's population growth, yet gained only 26 per cent of new housing consents," it says.

In the past year most of the city's population growth (27,600) came from net immigration from overseas, only partly offset by net internal out-migration of 5200 people to the rest of New Zealand. There was also a natural excess of 13,671 births over deaths.

In contrast, new dwelling consents in Christchurch, at 6668 last year, were much more in balance with a population increase of about 10,100. The report says the Christchurch population is now back up to 465,800, slightly more than before the 2010-11 earthquakes, and its housing stock has recovered to 185,000, only slightly below its pre-quake stock of 186,200.

It finds that rents for three-bedroom houses in the lower quarter of the market increased by more than consumer prices over the past five years in 23 out of 25 towns and suburbs that it selected as the lowest-valued parts of the country's main populated regions.

The biggest increases were in the Auckland suburb of Otahuhu (up 38 per cent) and in three Christchurch suburbs. The highest rents of the 25 communities were in Panmure, where lower-quarter rents for three-bedroom houses are now $445 a week.

Greenstone Group managing director Phil Eaton, who chairs the Property Council's Auckland branch, said the cheapest way to build more affordable housing quickly would be through more intensive housing such as apartments and townhouses in built-up areas with existing services.


"Sprawling greenfields development is not the only answer," he said. "We need smarter, well designed and located housing closer to where the jobs are."

Skyrocketing rents stretch young family

When Jason Paul and Jess Severn returned to Auckland in December, the only place they could find to live was an upstairs flat costing $470 a week.

The couple, both 26, have two children - 4-month-old son Liam and 2-year-old Bailey. They wanted somewhere where the children could play outside.

Instead, their three-bedroom unit near the Panmure Basin backs right on to another unit and has only a sealed parking space between their front door and a busy highway.

They are lucky to have it. After Mr Paul's job on a dairy farm near Dargaville was sunk by plunging dairy prices in September, just weeks before Bailey was born, they searched the internet for houses in Auckland where both grew up.

"We applied for each house, we were applying for a lot, but so were thousands of other people," Mr Paul said.


They were casual workers at the Vector Arena before they moved north last year. They kept up that work even while they were up north, and since, but they have lived mainly on a benefit until Ms Severn started a job as a shop assistant this week. After paying the rent, they live on only $80 a week.

Their letting agent has just found them a three-bedroom house in South Auckland at $430 a week - with a backyard.

"It's an issue we need to bring out from behind closed doors and start to address as a nation."

- additional reporting NZME. News Service