Amid record immigration, NZ dwelling supply to slow

By Leith van Onselen

The New Zealand National Government’s single-minded focus on solving Auckland’s housing crisis by boosting supply continues to take a hammering.

Last week, Statistics New Zealand released figures showing that construction momentum has slowed, with the trend number of new homes consented decreasing 15% in the five months to January 2017:

“Most regions appear to have contributed to the recent decrease in residential consents, although Canterbury is the most significant contributor, followed by Auckland,” business indicators senior manager Neil Kelly said.

According to the Statistics New Zealand figures, there were 30,123 new dwellings consented across New Zealand in the year to January 2017, with just 10,032 consented in Auckland.

Clearly, this level of construction is nowhere near high enough to keep up with New Zealand’s immigration-led population growth, which added just under 100,000 people in the 2016 calendar year, with Auckland the primary recipient:

Now, the New Zealand Institute of Economic Research’s (NZIER) latest consensus forecasts show that residential construction across New Zealand is set to fall further. From Interest.co.nz:

…year-on-year residential investment growth is expected to peak at 13.9% in March, before moderating to 5.4% in 2018, 2.7% in 2019 and to 0.4% in 2020.

“Strong population growth has boosted demand for dwellings, but the acceleration in construction and funding costs have seen some developments put on hold,” the NZIER says…

Accordingly, Auckland’s housing crisis is likely to worsen, given it is estimated that 15,000 new homes need to be built in Auckland every year just to keep pace with its migration-fuelled population growth – way above current levels.

Thus, the National Government will remain under acute pressure for failing to fix the housing mess as it heads to the General Election on 23 September.

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