Millions face a lifetime renting

Up to 2.6 million New Zealanders could be renting soon, according to a visiting American expert who has called for city boundaries to be expanded to free land for more housing.

Wendell Cox, co-author of the Demographia Housing Affordability Survey with Christchurch developer and investor Hugh Pavletich, said renters would outstrip home owners in the next few decades.

Up to 60 per cent of the population or 2.6 million people could be lifetime tenants, priced out of the housing market, said Mr Cox, here to speak at the Resource Management Law Association conference in Auckland today.

House prices were at least six times annual incomes, making New Zealand's housing stock one of the world's most expensive, Mr Cox said.

"Around 10,000 people a year are dropping off the housing ladder in New Zealand," he said.

New Zealand was in danger of suffering the single largest home ownership rate drop of any First World country, he said, citing Census figures due out in early December which are expected to show ownership levels plunging dramatically.

People's dreams of owning a house were being shattered by disastrous planning regulations, which had strangled a plentiful supply of land surrounding cities, Mr Cox said.

"New Zealand could be headed toward a 40 per cent home ownership rate in 50 years, which is a real problem because your country will be considerably less affluent," said Mr Cox, a public policy consultant.

An artificial land supply problem had been imposed on major cities and that had driven up house prices, a problem for Christchurch and Auckland but also worrying in Wellington.

Houses would become cheaper if the "ring fence" around Auckland was dismantled, which would restore a supply-demand balance.

"Housing affordability has been destroyed in New Zealand's major urban areas. Urban planning policies have strangled the market for land, driving up costs. These policies include urban growth boundaries, greenbelts, growth areas, requirements for infill development, infrastructure fees," he said.

Auckland Regional Council chairman Mike Lee said yesterday that Auckland's metropolitan urban limit had been expanded by around 1100ha in the past four years in response to territorial authority pushes in Manukau, Papakura and Waitakere. Only "neo-conservatives, the new right and developers" attacked growth strategies, which protected urban fringes.

He said expanding Auckland's boundaries would make little difference to house prices but would cause infrastructure and environmental issues and threaten horticulture.

Rob Lang, head of top commercial property investor AMP NZ Office Trust, said it had become so difficult to build in many parts of New Zealand that some developers had left.


Long queue for Flat Bush project

Developers are lining up to work with Manukau City Council on the new $500 million Flat Bush town centre in south Auckland.

Through its Tomorrow's Manukau Properties, the council this week called for expressions of interest to develop the area where 40,000 people are expected to live by 2020.

Grant Hirst, the former head of mall owner Westfield (NZ) and the selection process adviser, said many groups here and in Australia had shown an interest.

Tenders close on November 3.