Housing Affordability in Auckland Improving Steadily Towards Year End
According to the latest Auckland Economic Quarterly report, the Auckland Council has announced that says the city’s housing affordability has improved by some 26% in the past four years, as measured by its Serviceability Affordability Model (SAM) that was developed in 2017.
Auckland Council’s chief economist David Norman spoke about how the Auckland housing market has benefited from regulatory and structural changes including the Auckland Unitary Plan and its zoning rule changes, a surge in industry capacity in New Zealand, and ongoing economic strength in Auckland with income growth and low unemployment.
it seems the council is sharing the same sentiments as the government and reserve bank, that latter who lowered the OCR recently due to similar reasoning, and effect which resulted in the lowering of mortgage rates and increased activity from first home buyers and more recently saw investors return to the market.
Auckland Mayor Phil Goff welcomed the news, noting that the improved affordability shows the progress that is being made addressing Auckland’s housing issues, “The Unitary Plan is working as it is intended to, helping Auckland become more compact, with 94% of dwelling consents issued in the past year being within the Rural-Urban Boundary.”
Goff also highlighted that the Auckland Council had continued to “issue consents at record rates across the board, with 14,634 dwellings consented in the year to September” and specifically heralded the past four months as having the most progress when it came to chipping away at its total housing shortfall.
The latest growth and housing data shows Auckland’s housing supply is catching up with its shortfall. Auckland Council estimates about 14,000 dwelling consents are needed each year to keep up with current growth. A record 14,634 dwellings were consented in the year to September 2019
David Norman, however, was quick to point out that there is no one clear solution, and that fixation on one factor fails to provide a full understanding of why Auckland’s housing market has remained unaffordable for many.
“Against the backdrop of continued growth, Auckland has managed to achieve greater affordability in the past six years through a mix of policies and structural changes, and after comparing other cities, we know there are several differences that give us food for thought.”
With the OCR and LVR restrictions staying at the current lows for the foreseeable future, it will be incredibly interesting to see where the future of the Auckland affordability lands.