New building consents in Auckland are almost keeping up with the region’s population growth, reports Greg Ninness of interest.co.nz.
According to provisional estimates from Statistics NZ, Auckland’s population increased by 38,600 in the 12 months to June. Since Auckland has an average household occupancy of three people per dwelling according to the 2013 census, an additional 12,867 homes would be needed to keep pace with the region’s population growth.
But in the year to June 12,369 new dwellings were consented in Auckland, giving an estimated housing shortfall of just 498 homes.
That compares to a housing shortfall of 3869 in the year to June 2017, and 5115 in the year to June 2016. If the trend continues the number of new homes being consented in the region will overtake annual demand from population growth sometime in the next 12 months.
A backlog remains
However as the chart below shows, an accumulated shortfall of nearly 25,000 homes has built up in the Auckland region over the last six years and that will take many years to overcome.
What the figures do suggest is that Auckland’s housing shortage is probably not getting any worse at the moment as new builds ramp up and almost match population growth.
The improvement is housing supply compared to demand has come about through a reduction in the natural increase in Auckland’s population – the excess of births over deaths. This declined from 13,800 in the year to June 2017 to 13,000 in the year to June this year (-5.8%), and there was an 11.1% reduction in net migration into Auckland, both from overseas and from within New Zealand, to 25,700 in the year to June compared to 28,900 in the previous 12 months.
That brought total population growth down from 42,700 in the 12 months to June last year to 38,600 in the 12 months to June this year (-9.6%).
Over the same periods, new dwelling consents in Auckland were up 19.3% to 12,369 in the year to June compared to 10,364 in the previous 12 months.
The figures suggest Auckland’s housing crisis has reached, or is at least is very close to reaching, its high water mark.
The latest monthly migration figures show that net population growth from migration is continuing to decline and the new building consent figures have been robust for several months.
If those trends continue, then the pressures that have built up in Auckland’s housing market over the last six years should slowly start to dissipate, and that could have a gradual flow-on effect on prices and rents.
However much will also depend on other factors such as the overall economy and what happens with mortgage interest rates. But for the time being at least the figures suggest a steadily improving picture as supply and demand for housing in Auckland start to get back into balance.
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