Statistics NZ analyses the data for our national housing markets to see how much new housing supply is falling behind the rising demand. The Auckland shortfall is large

This is a re-post of an article that first appeared on the Statistics NZ website, here.


Is there currently a house ‘building boom’?

In the year ended June 2017, 30,453 new homes were consented across New Zealand. This is near levels last seen in early 2005, but is still well below the all-time peak of over 40,000 homes per year seen in early 1974.

These new homes include stand-alone houses, apartments, townhouses, and retirement village units, but exclude non-residential dwellings such as prisons, hospitals, and hostels.

The average number of new homes consented was about 23,000 a year for the past 50 years. About 97 percent of all homes consented are eventually constructed, and on average their construction is completed about 10 months after the consent was issued, as estimated in recent experimental dwelling statistics.

Was there a house ‘building bust’ during the 2008 global financial crisis?

Home consents began to decline in 2007, and reached a low of 13,236 new homes consented in the July 2011 year. This was the lowest number in about 65 years, and was half the number of consented homes recorded in 2007.

Figure 1

Graph, New dwellings consented, year ended June 1967–2017.

Where are homes being built?

Just over one-third (10,364) of all new homes consented were for the Auckland region in the year ended June 2017. Canterbury issued the second-highest number of home consents, accounting for 17 percent of the national total.

What types of homes are being built?

Stand-alone houses accounted for 69 percent (21,090) of all new homes consented in the June 2017 year. Apartments accounted for 10 percent (2,913) of all new homes consented; three-quarters of these apartments were intended for Auckland.

Existing stock of homes

How many homes are there in New Zealand?

Dwelling and household estimates for the June 2017 quarter show there were 1.84 million private dwellings (homes) in New Zealand (at June 2017). These include stand-alone houses, apartments, townhouses, and retirement village units available for residential use that may be occupied or unoccupied. The estimates do not include non-private dwellings such as prisons, hospitals, and hostels.

How many dwellings are unoccupied?

The last few censuses identified that around 10 percent of dwellings were unoccupied. In these cases the homes may be baches and holiday homes only used part time, or the residents may have been away on census night. As some of the new homes consented are likely to be unoccupied because of part-time usage, we chose to exclude them from our estimate of housing supply.

Figure 2

Graph, Unoccupied dwellings as a percentage of total dwellings, 1891–2013 Censuses.

Figure 2 from A century of censuses – dwellings and households.

How many people live in each New Zealand home?

On average nearly three people are housed by each private dwelling in New Zealand (see A century of censuses – dwellings and households). This has changed over time, with just over five people on average living in a single house in the 1880s.

Figure 3

Graph, Average number of people per dwelling/household, 1867–2013 Censuses.

Figure 3 from A century of censuses – dwellings and households.

Is new housing supply keeping up with demand?

Supply of housing can be influenced by many different factors including regulations, new building plans, the cost of building materials, the availability of skilled workers, and zoning rules. Demand for homes is also influenced by a multitude of factors including increasing population, the cost of borrowing, exchange rates, and house prices.

New Zealand’s rising population implies the need for more new homes, assuming an average of about 2.7 people per household. This is a broad guide only.

From an estimated population of 4.41 million in June 2012, the resident population of New Zealand rose to 4.79 million in June 2017.

Just as the population has grown, so has the number of new homes available. Comparing population growth (adjusted for people in non-private dwellings, and average people per private dwelling) with building consents (adjusted for unoccupied dwellings) gives a broad indicator of the balance between housing supply and demand.

In the year ended June 2017, there was potentially a shortfall of about 9,000 new homes consented compared to what was needed to meet increased demand from a larger population in the same period.

Figure 4

Graph, Estimated new housing supply and demand, year ended June 1992–2017.

In the year ended June 2016, potentially 6,000 fewer new homes were consented in Auckland than population growth suggested was demanded.

Figure 5

Graph, Estimated new housing supply and demand, yer ended June 1997–2017.

Note: These figures are indicators of the balance between housing supply and demand and may change as more data is looked at in future.

Citation

Stats NZ (2017). Trending topics – Housing. Retrieved from www.stats.govt.nz

ISBN 978-1-98-852827-4
Published 22 August 2017


This is a re-post of an article that first appeared on the Statistics NZ website, here.

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21 Comments

Good information.
The number of Auckland houses that need work such as insulation, rewiring, new windows would be interesting.
Call that refurbishing or deferred maintenance.
Population of Auckland in the 1970,s 600,000, perhaps 200,000 homes need work done to meet reasonable standards of comfort?
Someone will know better than I.

You know we could probably solve Auckland's housing crisis over night just by getting those empty homes released back on to the property market for rental. What was it; 33,000 Auckland dwellings officially classified empty they would make quite a big dent in available properties.

And remember that 33,000 Auckland figure was based on the 2013 Census figures so it's probably a lot more than that right now.

Both Paris and Vancouver have been very active on tackling their vacant home issues. Paris has introduced a 60% non-resident owners tax.

And a City of Vancouver report reveals 25,495 homes either empty or used by temporary and foreign residents. Out of the 25,495 homes, 60 percent or 15,280 were apartment units.
Vancouver has introduced a empty homes tax at 1% of the property’s assessed value.

Vancouver: https://www.straight.com/news/927761/city-vancouver-report-reveals-25495...

Paris: Vacant Homes Are A Global Epidemic, And Paris Is Fighting It With A 60% Tax
https://betterdwelling.com/vacant-homes-global-epidemic-paris-fighting-6...

Auckland: Rise of the ghost homes - More than 33,000 Auckland dwellings officially classified empty
www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11654495

Looking at the numbers you are certainly right.
Reading either the power or water meters may establish if homes are empty then a letter to the ratepayer with a please explain, first plead, then threaten.....
I think it will go down well.

This sounds great, I fully support totalitarian governments! Everyone needs to be very closely monitored to ensure they are acting in the best interests of the masses even when that goes against their own best interests.

You don't sound enthusiastic?

I take it you never get a warrant of fitness or insure your car because you don't like mass surveillance?

no.. he is saying that if he is not using his car, why should he be forced to let someone else use it..??
Why should "they" even monitor whether it is used or not.

I'm guessing thats is why he uses the word... Totalitarian".

Fair comment.

Dp

At the risk of starting a whole separate side conversation... I would just like to point out that the TOP tax on unproductive capital would have the same effect as a vacant house tax with the bonus being a reduction in income tax. The homeowners would need to make the asset productive or find the money elsewhere to pay the tax.

There is a mix of NZ born owners and overseas born migrant owners in our street (Brits, Aussies, SA, China and Taiwan). The irony is that the often empty houses are NZ born residents with beach houses or on long european trips.

thats just anecdotal, my street has a halfway house for asian tourists every 2 weeks a new bunch of people come in late at night with a dozen suitcases. three houses are for sale by the same agent which are all empty

A recent purchase of an auckland inner suburban 2 bedroom flat, probably 70,s
No kitchen or bathroom ventilation and leaking windows that caused mould on walls and condensation.
But you can see the sky tower and drive to work without the motorways.
10k fixed the problems and it is now warm, condensation free, with just one kitchen extract fan.
Perhaps auckland council could offer free surveys next winter, 30 minutes per flat, and build a database of the state of housing?
This wasnt a rental so is outside the scope of the goverments interest currently.

I remember doing a Geography project at school where we looked at how the local council had improved the quality of the old terraced housing in Bristol in he 90s. They paid for insulation and double glazing to be installed and brought toilets inside. The outcome was less fuel poverty and improved health (less health spend per capita).

National has preferred to let the market decide and pay for itself or offer token subsidies (33% off but your have to pay someone an extra 33% to do the work for you). The obvious problem with this being the less well off can't afford it (especially given the amount they now have to pay for shelter).

I think during the weekend there was a panic.
It appears our hospitals are overflowing wirh repiratory problems, a bad winter.
Stuff wrote an article implying Wellington was considering inspecting private homes, but strangely worded.
The government parked an ambulace at the bottom of the cliff.
Who knows what will happen.

Snap Statistics NZ. Great minds think alike ...... or is it fools hang out together.....
https://medium.com/land-buildings-identity-and-values/aucklands-housing-...

Dull Sunday and I listened to Bill English in Christchurch for a few seconds.
It is so typical of the Nats that they will wait until a child presents to hospital with illness and then pour resources into correcting problems with the house.
Shame the child is already sick.
A top of the cliff solution would be identify the homes that are substandard and assess if the occupants are at risk.
Wont do that...

just get the chinese to invest more ,Oh thats right is just a figment of our imagination and we are all just racist well thats what National said i dont

forget being call racist by my govt who put money and chinese before Kiwis

What is tricky with the figures is the significant impact that people per house makes to the demand factors. Some of the change is the sign of an aging population (more retired, more widows etc). However, I think the big factor in the Auckland market is that as rentals have gone up - people have found different housing options. If the average people per household changes from 2.4 to 2.6 then we need 50,000 less houses. Put into that mix that the current average size of houses in Auckland is relatively large (eg more stand-alone than apartments compared to other major cities) it is able to adapt to higher occupancy levels- eg kids staying home longer, taking in boarders, more flatmates. You add that much of the net population increase young immigrants (eg students) they are people who are prepared to look at different housing options.

I believe the increase in auckland house prices has been based on a belief that population increases results directly into housing shortages - without considering the impact on higher rentals on demand.

And it is going to get worse.

Phil Goff has decided that the planned Takanini land release is to be blocked forever, but Warkworth North will be moved forward. Proving yet again that just when Auckland can't get any more stupid, it does.

There is nearly universal agreement that the current building code standards are too low but the government refuses to improve these for fear that they will be seen increasing the cost of building. Another problem caused by prices being too high.