Infrastructure NZ says housing reform urgently needed to deliver cheaper Auckland homes

South Auckland should be a focus for the Government's new urban development authority, Infastructure NZ says. Photo / Richard Robinson

Auckland is only building half of the new homes it needs. The Government has the right tools to tackle the problem with its proposed housing reform agenda but is yet to pull the trigger and get to work, Infrastructure NZ says.

Planning reforms are needed even more urgently than KiwiBuild if thousands more affordable homes are to be built in Auckland, Infrastructure NZ says.

New home building hit a record high last December, but was now showing signs of tapering off, the independent think tank said.

In the 12 months to April, 10,195 new homes were built in Auckland, down almost 500 homes compared with the 12 months to December.

The recent drop was a worry because Auckland was still producing only half the homes it needed, Infrastructure NZ chief executive Stephen Selwood said.

Auckland Council estimated the city was short 50,000 homes, he said, meaning 20,000 needed to be built every year for a decade to reduce the shortfall.

Just keeping pace with population growth required 14,000 new homes each year, he said.

"We are already 4000 short just to meet annual growth, let alone catch up with the deficit," Selwood said. "That is a worrying sign and if it were to continue then clearly the housing problem gets worse, not better."

With home ownership levels at their lowest in 60 years, the Government urgently needed to push through the housing reform plans it promised shortly after being elected, he said.

Infrastructure NZ chief executive Stephen Selwood envisages a satellite city being created in South Auckland with homes priced as low as $300,000. Photo / Dean Purcell

These included three prongs. The first was to create a development authority given extra powers to speed up the opening up of land for large-scale housing developments.

Other moves included steps to make it easier for private investors to fund infrastructure and a longer-term process of overhauling New Zealand's planning laws.

Selwood praised the measures as the right tools for the job, but worried they were being bogged down in the parliamentary process.

He said a development authority could slash house prices by helping to create a satellite city in South Auckland, linking Drury and Pukekohe, where homes might be priced between $300,000 and $500,000.

The authority could access cheaper land by using Government-owned land or by potentially having greater power to acquire land at rural rather than city prices. Infrastructure costs could then be driven down by building housing estates on larger scales.

Housing

Selwood said the future satellite city was better suited to South Auckland than North or West Auckland because of its location on the rail line and proximity to job hubs Manukau, Auckland Airport, Hamilton and Tauranga.

Housing and Urban Development Minister Phil Twyford said the Government was making progress on its reform agenda with its new development authority - Kāinga Ora – Homes and Communities - to start operating from October 1.

Auckland mayor Phil Goff supported the creation of one Government body to co-ordinate house building efforts, but cautioned it still needed to listen to local residents and not steamroll their concerns.

He also said the council was now giving out a record number of building consents for new homes.

"These are three to four times as high as seven or eight years ago and are approaching the level needed to match population growth," he said.

Housing and Urban Development Minister Phil Twyford says his urban development authority, Kāinga Ora - Homes and Communities, will be running from October. Photo / Jason Oxenham

Auckland Council's director of growth and housing, Penny Pirrit, said the council's main planning document had already earmarked room for one million more homes and was having success getting new homes and apartments built along public transport networks.

ASB senior economist Jane Turner also questioned whether the housing crisis was as bad as many made out.

She said the building industry was flat out building new houses and ASB estimated Auckland's shortfall to be more like between 20,000 and 27,000 homes.

Nick Goodall, the head of research for property analysts CoreLogic, acknowledged it was hard to accurately calculate population growth in Auckland and therefore the housing shortage.

But he said the housing shortfall could be even worse than Infrastructure NZ thought because while 10,195 new homes were built in the 12 months to April, other homes had to be demolished to make way for them.

This meant the net number of new homes added to Auckland's housing stock could be as low as 7000 in the 12 months to April, he said.

For his part, Selwood wanted the focus to shift beyond simply building more homes to instead look at innovative ways to build cheaper homes in Auckland.

"There is no point building 14,000 or 20,000 homes that are in the $600,000-plus category because actually that will mean an oversupply in that category and undersupply of homes at prices people can actually afford, such as $300,000 to $500,000," he said.