Lateral thinking required to increase housing stock
We’re in a crisis situation, people. Do the maths. Buying a house is now unaffordable for 86% of Auckland’s non-home owners. Over the past five years Auckland rentals have risen by 25%, land prices have increased 52%, building costs by 36% and house prices by 45%. Land is the new gold.
With only 7200 new houses completed last year (although 9900 dwelling consents were issued), we’re still 50% behind the number of new builds we need in Auckland annually to cope with our population increase – and we’re not within a bull’s roar of addressing the overall backlog shortage of houses.
The reasons for this are many and varied.
The pressure on Auckland’s housing and infrastructure increases by the year. In 2016 Auckland absorbed an additional 33,900 net permanent migrants.
The current big projects in Auckland’s CBD are sucking up materials and tradies from the rest of Auckland.
The majority of New Zealand banks have become more cautious and restrictive in their lending to local residential property developers, particularly those involved with high-risk big residential projects. In 2016 35 planned Auckland multi-residential projects fell through.
The development fees charged by the council for extra community and network infrastructure are still astronomical. Where are these reserve fees going? Not into infrastructure, it would appear.
In Auckland we’re paying the price of many years of poor planning by our local bodies. We still have sewage pouring into our harbours whenever it rains. Let’s fix up the existing infrastructure first.
The cost of new builds has increased 50% in five years – horrifying. It makes nonsense of budget forecasts for big construction projects because they’re out of date before the first sod is turned.
The shortage of construction materials continues to be crippling – construction firms are struggling to source concrete, glazing, kitchens and carpet. Because the supply of local materials is so stretched, cheap and substandard materials, including poor quality steel, is being shipped in from China. This is another ticking time bomb in our new buildings, as we will all discover in years to come.
Here are some solutions.