By Greg Ninness
The housing shortage may be far worse in several regions than it is in Auckland, the latest census data suggests.
Interest.co.nz compared population and dwelling data from the 2018 Census with the same data from the 2013 Census to get an estimate of how much population growth had exceeded the supply of dwellings in all regions of the country over that five year period.
The results were surprising.
They showed that while Auckland had the biggest shortfall in the supply of homes in terms of absolute numbers, when adjusted to allow for differences in the scale of regional markets, the housing shortfall was greatest in Northland, Marlborough, Bay of Plenty, Gisborne and Waikato, suggesting those regions are likely to be facing the biggest squeeze in their housing markets.
At the 2013 Census this country had a usually resident population of 4,241,448 people and 1,747,077 dwellings, giving an average occupancy of 2.4 people per dwelling.
At the 2018 Census the usually resident population had increased to 4,699,089 people, which would have required 188,505 additional dwellings to keep average occupancy at the same level as 2013.
But the number of additional dwellings recorded in the 2018 Census was just 108,549, leaving a national shortfall of 79,956 dwellings throughout the country, equivalent to 4.3% of total housing stock.
In Auckland the estimated shortfall between the two censuses was 22,980 dwellings, easily the biggest in the country. But because the Auckland market is so large that was just 4.3% of its total dwellings, exactly the same as the whole of New Zealand.
The table below shows the size of the estimated housing shortfall between the 2013 and 2018 census, both in the actual number of homes and as a percentage of total dwellings in each region. The higher the percentage, the greater the shortage of housing is likely to be. By that measure, the housing shortage should be greatest in Northland where it was short by 9.2% of the region's total housing stock, followed by Marlborough at 7.8%.
Those numbers should be of interest to residential property investors because areas with the biggest shortages of housing are also likely to be the areas with the biggest potential for growth in rental income and capital gains. So Northland and Marlborough could be happy hunting grounds for potential investors chasing growth.
However the relatively small size of those regions' housing markets can bring their own problems. It only takes a small movement in the number of people arriving in or leaving from such a market, or in the number of homes being built, to change those numbers. In smaller markets, today's housing shortage could fairly quickly turn into tomorrow's surplus, so investors should weigh-up potential volatility.
A better bet might be the Bay of Plenty (6.6% shortfall) and Waikato (5.2% shortfall). They both show dwelling shortfalls that are greater than Auckland's, have good prospects for further growth and a reasonably good sized market that's less likely to be subject to extreme movements in supply and demand.
Regions that don't look so promising are Taranaki and Southland where the supply of housing appears to have come much closer to keeping up with growth in population, and the West Coast where the population declined between the 2013 and 2018 censuses, which wouldn't have helped landlords in the region.
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|Estimated Accrued Housing Shortfall between 2013 and 2018 Censuses|
|Region||Housing Shortfall||Shortfall as % of total housing|
|Bay of Plenty Region||8,329||6.6%|
|Hawke's Bay Region||4,220||6.4%|
|Total, North Island||63,823||4.6%|
|West Coast Region|
|Total, South Island||15,738||3.3%|
|Total All Regions||79,956||4.3%|