Divided Auckland: Renting trend to last for decades

The trend of more renters is to continue into the middle of the century. Photo / Thinkstock.

The trend of more renters in Auckland is to continue into the middle of the century, with an Auckland Council analysis tipping three out of 10 households will not afford a $400,000 house by 2051.

The council suggests that if 450,000 future households were formed by 2051, only three out of 10 could afford a house over $400,000.

New council figures also show that about 32,000 households - 19,000 paying off a mortgage and 12,000 paying rent - are forking out more than 30 per cent of their gross income if they earn between $50,000 and $70,000.

The urgency to claw down housing costs for low- to moderate-income households is spelled out in the council's draft response to findings by the Productivity Commission on housing affordability.

The commission wants the council to reconsider its plan to squeeze 75 per cent of the city's housing growth in the next three decades within existing boundaries.

The council yesterday noted the commission's concern that its aim for a more compact city would worsen the problem of housing affordability. But its submission said the commission had failed to demonstrate that releasing more sections outside the existing urban limit was the solution.

This was likely to pile on significant costs for providers of water and transport services.

The council called for further investigation into interventions in the housing market to help developers cater for low- to medium-income groups.

Council calculations suggested 300,000 "affordable" homes would be needed in 40 years.

Councillor Arthur Anae, who is chairman of the council's economic development forum, said Auckland was now in the same league as New York, where even affluent people could not afford to buy an apartment.

"And it will continue that way regardless of whether we move the metropolitan urban limit, because the price of a section will move up according to supply and demand."

Mr Anae said thousands of Auckland families could be helped simply by the council cutting its charges.

"The council should get rid of the red tape and make it easier for homeowners to build another property on the back of their house ... and let their children have the front one.

"People are put off using that empty section by the hassles and arguments."

AFFORDABILITY

What you can afford with your income:
$66,000 buys a $264,000 house.
$93,500 buys a $374,000 house.
$143,000 buys a $572,000 house.
$450,000 current median price Auckland home.

Source: Auckland Council