In depth: What’s fuelling Auckland’s house prices?

Last Updated : 17 Nov 2015
In depth What's fueling Auckland house prices

Auckland Council knows housing is one of the toughest issues Auckland faces.

In 2012, the Auckland Plan referred to Auckland’s crisis in housing supply and affordability. Poor quality older homes and lack of choice in rental accommodation continue to be major challenges.

Although the council does not build homes, it does play a key role in facilitating housing by:

  • providing development opportunities to meet Auckland’s housing needs
  • continuously seeking to provide quicker and yet quality consenting approvals
  • ensuring infrastructure is in place where new homes are built
  • providing leadership through the Unitary Plan – a single planning rule-book that provides clear direction on long-term housing supply and facilitates housing choices.

Chris Parker, Auckland Council’s Chief Economist comments on the housing affordability challenge

“Auckland housing is a market like any other, driven by supply and demand factors.

On the demand side, there are a lot of people who see the Auckland of the future as a globally competitive city. So people are buying property now to position for that success.

We’re also seeing strong demand due to natural population growth and more migrants coming to Auckland as part of a global trend for people to move to major cities. Undoubtedly New Zealand’s outperformance of Australian and European economies is bringing migrants here too. And low interest rates mean people can borrow money cheaply.

On the supply side, planning rules have sometimes constrained development; under the forthcoming Unitary Plan, we’re looking to increase intensification and develop more land.

To achieve the world’s most liveable city, design requirements, such as building height limits, minimum apartment sizes, floor-to-ceiling heights, heritage values and environmental performance requirements must be carefully managed. These are also being reviewed as part of the Unitary Plan hearings.

Also, measured productivity in the construction sector has not improved for years, so homes are not getting cheaper to build.”

Read more of Chris's commentary on Auckland's housing market. 

So what is Auckland Council doing?

Auckland Council is one of a number of groups that play a role in tackling Auckland’s housing challenge, including central government, the Reserve Bank and property developers. We work closely with all of these parties to improve housing affordability and supply. Here are some of the things we’re doing.

Housing Action Plan

In 2012 the council developed a Housing Action Plan which is nearly complete. The plan has enabled:

  • a number of affordable homes to be built within special housing areas (SHAs) and under the Auckland Unitary Plan
  • a requirement in the Unitary Plan and SHAs for new homes to meet a minimum 6-star rating from the New Zealand Green Building Council or similar • the move of some Pasifika financial literacy graduates into new homes in Waimahia
  • funding of around $500,000 for papakāinga housing (housing for and by iwi) in the 2014-15 financial year and another $13.4 million in the 2015-2025 Long-term Plan for papakāinga and marae.

Auckland Housing Accord

In 2013 the council and government signed the Auckland Housing Accord to urgently boost the supply of new homes. 

We are on track to meet the agreement’s target of consenting 39,000 new homes and sections in three years. Almost 20,000 new homes and sections have been consented in Auckland between October 2013 and the end of June this year. Ninety-seven SHAs have been established in the two years the Housing Accord has been in place.

The council is seeing a marked acceleration in house building within SHAs. A quarter of the 97 already have completed homes. The rate of building will go even faster with the kick-off of the 2015/2016 construction season in October this year.

Fast-tracking consents

People will be able to apply and pay for resource consents and building consents online by early next year. Our fast-track process means that 15 per cent of all resource consents are processed within 10 working days. In some cases, building consents which have gone through a rigorous pre-application process are processed within five working days.

For more on the housing issue:

  • Deputy Mayor Penny Hulse's answers frequently asked questions on Auckland housing questions. 
  • Deputy Mayor Penny Hulse talks more on the Auckland housing crisis.
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