If there is one thing we have learned in the past few years, and especially in 2019, the activity from the government and council has a tremendous effect on how the market is trending. Since the labour government came into power we have seen things such as the potential capital gains tax scare off investors from the market, the underperforming kiwi build, but also the lowering of LVRs and the OCR which has brought back first time buyers in record-breaking numbers, as well initiatives to try and keep the housing more accessible for this market. But now, three months into the new year, what have we seen from the government and councils in terms of new policies and investments, and as we get closer to the election month, what potential promises can we expect from the two big parties?
One aspect the labour government has been trying to tackle since they came into power is the high number of homelessness and how expensive renting is, taking initiatives with reining in landlords but most importantly, trying to invest more in state and emergency housing.
One example of this is the investment made in January to Kāinga Ora – Homes and Communities, the agency responsible for the likes of KiwiBuild and the country’s statehouses, which gained a substantial amount more headroom for future debt issuance with the government more than doubling the debt ceiling under its “Borrowing Protocol” from $3.05 billion to $7.10b.
Kāinga Ora’s acting chief executive, Greg Groufsky, said the agency’s higher debt limit gives it room to “build more houses in addition to current targets if needed for the future”. This includes support for large urban development projects underway in Auckland, which will deliver up to 22,000 new homes over the next 10 to 15 years, as well as upgrading older state homes. This has been a hot button issue for a lot of voters across the country as many have perceived state housing as being a neglected issue in the grand scheme of housing.
But it also seems that we are trying to get more houses built, and faster – especially in Auckland.
According to a new report, Auckland can expect to see the number of new homes being built continues to increase for the next one to two years. This comes as more than 13,000 new homes were added to Auckland’s housing stock last year.
Auckland Council issued 13,197 Code Compliance Certificates for new dwellings in 2019, up 24% compared to 2018 and up 63% compared to 2017. As the number of new dwelling consents being issued is still rising and it generally takes up to two years for a dwelling to be completed after a consent is issued, it is expected that the number of new homes being built in the city will continue to rise at a steady pace.
Code Compliance Certificates are issued when the building work carried out complies with the issued building consent, and in the past four years, the number of new homes being completed in Auckland each year has more than doubled.
That suggests the number of new homes being completed in Auckland could hit around 15,000 a year sometime in 2022, which would be an increase of 14% compared to the number completed last year. But the figures also suggest that while the number of new homes being completed is still rising, the rate of growth is slowing, so it could be possible that in two-year period we could see these numbers flatten.
This is also an important statistic to consider, as the city is dealing with ever-increasing population growth, as well as new suburbs being built as the city expands beyond the typical boundaries.