The Government's strategy to increase the supply of land for building will take pressure off Auckland house prices and should deliver results within three years Prime Minister John Key said yesterday after it emerged just five houses have been built in the Super City's "Special Housing Areas".

Mr Key and his Government have faced renewed questions over their housing strategy after new Auckland Council rating data showed house prices across the Super City have climbed on average 34 per cent in the last three years and up to 65 per cent in Hobsonville.

The increase is in line with previously released data from Quotable Value.

In response, Mr Key suggested first home buyers looking to get onto the property ladder may have to lower their sights and consider buying apartments in some cases. However he continued to defend his Government's strategy of increasing land supply by working with the Auckland Council. In conjunction with the Government the council has now established several Special Housing Areas around Auckland where planning for new developments has been fast tracked.


The council's data show Special Housing Areas, which have been in place for about a year, have yet make an impact on the supply of new homes and prices. Auckland Mayor Len Brown yesterday acknowledged just three or four homes had been built in the areas so far. The council later told 3News the number was five.

Twelve months after the legislation for Special Housing Areas was passed, "that's a failure in anyone's book", Labour's housing spokesman Phil Twyford said.

"The Government has had six years in office, surely they have to recognise that whatever they're doing is not working."

Mr Key said his Government's policies would take time to work.

"I wouldn't be surprised if the discussion three years from now is about how many houses are available. There's going to be a hell of a lot of houses built over the course of the next three or four years, there's a lot of land released. If you look at those Special Housing Areas they will account for tens of thousands of new dwellings."

Housing Minister Nick Smith defended the Government's strategy but acknowledged "we have no reliable data on the number of houses that are completed in Special Housing Areas or anywhere".

However, he said there had been 294 building consents granted in Special Housing Areas so far.

Dr Smith said a fall in house price inflation in Auckland over the last year was proof the Government's strategy was working, as was an increase in building activity across the city.


The Auckland City rating valuation data was "simply a reflection of what we had already known. It is encouragement for us to push the accelerator as hard as we can on new housing development and growing supply."