New Zealand’s housing minister, Nick Smith, took spin to a whole new level yesterday, denying that his National Government had failed on their promise to boost Auckland housing supply and arguing that housing affordability had actually improved. From Interest.co.nz:
The Building and Construction Minister was speaking on Radio NZ about a story that despite the Auckland Housing Accord stipulating 10% of any Special Housing Area development must be ‘affordable’, the Council didn’t in fact have any figures or idea of what prices these houses had been sold for – or whether the houses had even been built…
It was put to Smith that a key purpose of the Accord was increased affordability and greater access to housing for first home buyers. Smith sought to argue that housing affordability had improved in Auckland over the past 12 months…
The definition of affordable housing was “very much in the eyes of the beholder,” Smith said. “Obviously, someone has bought the 4,751 new homes consented in those Special Housing Areas.” He then seemed to acknowledge that 30% of sales had been to investors. This did not mean the policy had failed.
“What you’re saying is affordability is the key. We know from Massey University’s independent index there has been a substantial improvement in affordability in the last 12 months. We know the purpose of the Accord was to increase housing supply. In May, we consented more houses, in the month of May than any year in 40 years. Now it is increasing supply, it is increasing affordability.”
“I cannot be a miracle man. We’ve had six straight years of increased housing construction in Auckland. There’s never been before six straight years. You cannot grow a sector at about more than 20% per year. Now the May figures are 20% up on last year”.
Auckland was set to deliver on its required 13,000 new houses per year by the end of 2018/early 2019, Smith argued…
Smith had earlier argued the SHA policy had been a significant success in boosting Auckland housing supply. The government’s input on the Housing Supply Accord had always been about unlocking the supply of land.
“We now have 4,751 homes consented in Special Housing Areas. A third of the new houses being built in Auckland right now are in Special Housing Areas. That is, if we did not have that mechanism, we’d have 3,000 a year fewer homes being built. And that is why it has been a significant success in what it set out to do, and that was to provide access for more land than had previously been choked,” he said.
Sadly for Nick Smith, the data points to a monumental failure by his National Government to improve housing affordability in Auckland.
Auckland’s average dwelling value was an insane $1,045,000 as at May 2017, having increased by 9% over the past year and by 91% since the pre-GFC peak:
Auckland dwelling supply has also failed miserably to keep pace with National’s mass immigration program. Over the past year, Auckland added an insane 44,500 people:
Driven by a 35,772 increase in net overseas migration:
By contrast, Auckland’s dwelling construction continues to slow, with just 885 dwelling consents issued in May and 10,379 issued over the year, with a downward trend clearly evident:
How Minister Smith can claim success in the face of these disturbing figures is beyond a joke.
Maybe Minister Smith should adopt Labour’s housing policy?
Labour will remove the Auckland urban growth boundary and free up density controls. This will give Auckland more options to grow, as well as stopping landbankers profiteering and holding up development. New developments, both in Auckland and the rest of New Zealand, will be funded through innovative infrastructure bonds.
Don’t hold your breath. After spending years complaining about council’s restrictions on land development, Nick Smith’s National Government recently thwarted legislation that would have removed Auckland’s urban growth boundary and freed up density controls. As noted by Bernard Hickey of Newsroom in April:
One curious coda to the RMA debate that concluded last week was that the Opposition parties plus ACT and United Future all voted again during the third reading debate for amendments that would have abolished Rural Urban Growth Boundaries and allowed the financing of infrastructure bonds paid for with targeted rates.
The amendments were defeated by National and the Maori Party.
The irony of a Government that has railed against restrictions on land development by councils voting against removing those restrictions should be noted. And also that the proposal for infrastructure bonds was backed by the right-leaning New Zealand Initiative and voted for by the Greens and Labour. Strange times indeed.
Bottom line: Much like their Liberal counterparts in Australia, the National Government are housing affordability phonies.
