Auckland will face pressures on land development capacity, significant increases in the number of house renters and rental properties required, as well as pressures on transport infrastructure due to strong population growth over the next 16 years, the Centre for Housing Research (CHRANZ) said in a report released today.
Meanwhile, CHRANZ released a second report on the patterns and dynamics of housing demand among younger Auckland households.
It said the younger households age group (20-40 year olds) had experienced New Zealand’s biggest fall in home ownership rates between 1986 and 2006, with Auckland leading the national trend.
Between 1986 and 2006, the largest falls in home ownership nationally have been among younger age groups:
• 17.9 percent among 25–29 year olds;
• 17.7 percent among 30–34 years olds; and,
• 15.5 percent among 35–39 year olds.
Here is the release from the Centre for Housing Research on the first report:
The Centre for Housing Research, Aotearoa New Zealand (CHRANZ) has today released the research report “Auckland Region Housing Market Assessment” (November 2010) that assesses current and future housing demand and need (2006 to 2026) in the Auckland region, its distribution, composition and also its implications. This is the first such assessment using the New Zealand housing market assessment manual.
Undertaken by Darroch Limited, this research was funded by CHRANZ and the Auckland Regional Council.
• Strong population growth in Auckland will place stress on Auckland's dwelling capacity, infrastructure, transport, and city form as it shapes the housing market until 2026.
• Dwelling demand for the 14 defined housing market areas (HMAs) will increase by 39.6 percent - from 431,890 dwellings in 2006 to 601,420 by 2026.
• The Auckland region already has (June 2009) significant renter housing affordability issues - 49.9 percent of all private renter households are experiencing ‘financial housing stress’ – households spending more than 30 percent of that household's total gross income on housing costs.
• Demand for rental accommodation will continue to increase a significantly faster rate (63.5%) than demand for owner-occupier dwellings (26.2%).
• Home ownership has significantly reduced from 70.7 percent to 66.9 percent between 1996 and 2006.
• The absolute size of the ‘intermediate housing market’ (IHM) increased from 39,700 to 77,110 households between 2001 and 2009. ( IHM is the number of private renter households who have a least one member in paid employment and cannot afford to purchase a dwelling at the lower quartile sale price, assuming standard bank lending conditions.)
• Housing demand will be particularly shaped by the growth in older, couple-only and single person households and will increase demand for smaller one and two-bedroom dwellings.
• Auckland's residential development capacity under the existing Regional Growth Strategy (RGS) will be nearing full capacity by 2026.
• A mismatch between the location of dwelling capacity in the region and the location of projected employment growth (especially for higher skilled and high paid occupations in Auckland city). 51 percent of the employment growth in the region is projected to be located in Auckland City but this area only has 32 percent of regional dwelling capacity.
• The implications for Auckland and its new governance will include: pressures on land development capacity; significant increases in the number of renters and rental properties required; as well as pressures on transport infrastructure.
Here is the release for the younger households report:
The Centre for Housing Research, Aotearoa New Zealand (CHRANZ) has today released the research report “The Determinants of Tenure and Location Choices of 20-40 year old Households in the Auckland Region” (November 2010) that identifies the patterns and dynamics of housing demand (tenure and location choices) among younger households in the Auckland region. Environmental, social and economic implications on Auckland's spatial planning and urban growth are also examined.
Undertaken by Beacon Pathway Ltd, this research was funded by CHRANZ, the Ministry for the Environment and the Ministry of Economic Development with funding from the Ministry of Research, Science and Technology’s Cross-Departmental Research Pool.
• Location is critical. Once Auckland region’s younger householders have decided what locations best optimise their connections to places and people, their preferences are:
home ownership, especially for families;
a detached dwelling;
comfort and functionality (which involves dwelling size and warmth); and
homes and neighbourhoods that are safe for children.
• Quality of life, closeness to familial and social connections rates higher than closeness to work.
• When younger households move within Auckland they are more likely to move another dwelling in the same suburb or neighbourhood. Lower income households particularly limit the distance they move.
• The younger households (25-39 years) age group has experienced NZ’s biggest fall in home ownership rates (1986 – 2006) with falls most pronounced in Auckland.
• The number of younger households in Auckland’s ‘intermediate housing market’ has more than doubled in five years - from 24,908 in 2001 to 51,866 in 2006. (Between 1986 and 2006, the largest falls in home ownership nationally have been among younger age groups: 17.9 percent among 25-29 year olds; 17.7 percent among 30-34 years olds; and15.5 percent among 35-39 year olds.)
• Rental tenure among younger households is concentrated especially in lower income households, and among Asian, Maori and Pacific younger households. ( IHM is the number of private renter households who have a least one member in paid employment and cannot afford to purchase a dwelling at the lower quartile sale price, assuming standard bank lending conditions.)
• Significant numbers of children in younger households live in rental dwellings.
• A burgeoning population and increased demand for rentals will place further strains on Auckland region's infrastructure – transport and amenities.
• Multi-pronged approaches are needed to support diverse housing choices of younger households, including recognition that housing is integral to city resilience and connectivity.
(Updates with second report)