Auckland Housing Supply Sees Improvement with 100,000 New Homes Built in Seven Years

Auckland, New Zealand — The city's housing supply is showing signs of improvement, with nearly 100,000 homes built since changes to higher-density rules began. Despite this progress, affordability remains a challenge for many residents.

Auckland Housing Supply and Affordability

Auckland Council's chief economist, Gary Blick, has reported that the city's housing supply has improved significantly, aligning more closely with population growth. However, the median house price in Auckland is now about $1 million, which is 7.5 times the median household income, a stark increase from previous decades.

Economic Fluctuations and Housing Demand

Blick noted that housing demand and supply are subject to economic cycles. From 2020 to 2021, inflation rose, interest rates climbed, and this dampened demand. By 2023, interest rates had fallen from 7% to about 4%, and there were more houses available, but there was still a fear of overpaying among buyers.

New Planning Blueprint and Government Directive

The council and government have agreed on a new planning blueprint to increase housing density near major transport routes. The City Rail Link is a key focus, and the council has until October 10 to finalize a plan across the wider city. This directive allows for more housing in central areas but permits the council to opt out of the previous directive allowing three dwellings of up to three storeys on most sites.

First-Time Homebuyer Experiences

Natasha Thirani, a 32-year-old first-time homebuyer, shared her experience. She and her husband are targeting a $850,000 townhouse in Mt Eden but are exploring options in The Glade, a masterplanned community in Mt Wellington. With interest rates falling and more houses to choose from, she advises against maxing out home loans for first-time buyers.

Mayor's Perspective on Growth and Development

Mayor Wayne Brown emphasized the city's future population growth, projecting an increase of over 250,000 people in the next decade—more than the current population of Wellington City. He highlighted the importance of focused growth in areas with significant investment, such as transport corridors.

Industry Insights and Market Trends

Barfoot & Thompson, the city's largest real estate company, reported a glut of 6083 unsold homes at the end of May 2024, nearly double the figure of 3013 in May 2016. Managing director Peter Thompson noted the increased buyer choice due to new builds and existing properties.

Councillor's View on Housing Challenges

Councillor Richard Hills acknowledged the progress in housing development but pointed out ongoing issues such as rising homelessness and unaffordable rents. He emphasized the need for at least 300,000 homes for future residents, particularly near transport hubs like the City Rail Link.

Conclusion

While the housing situation in Auckland is not perfect, Gary Blick concluded that it is a tale of improvement. With more homes available and a strategic focus on transport corridors, the city is moving towards a more balanced and sustainable housing market.