Key Facts

  • Auckland faces several key decisions that will impact the capacity for new homes.
  • The city’s Unitary Plan demonstrates how density increases can affect the quantity and price of housing.
  • About one-third of dwellings approved from 2016 to 2021 were a result of the Unitary Plan’s upzoning.
  • There is a noticeable lower growth path for rents and house prices in Auckland compared to the rest of New Zealand.
  • Adding more capacity could enhance housing affordability.

Article Summary

Auckland is set to make crucial decisions affecting the capacity for new homes as it reviews factors around its Unitary Plan and natural hazard risk rules. By allowing for increased density, the Unitary Plan has significantly augmented the quantity and price of housing in the city. Evidence suggests that one-third of dwellings approved over the past five years were a result of this upzoning.

A surge in building consents for new dwellings since the Unitary Plan gained approval in late 2016 supports this view, with the number of consents peaking to an annual record of 21,000 in 2022. The emerging trend predominantly owes to new townhouses in upzoned urban locations that offer proximity to employment, transport, and other amenities. Housing supply appears to be responding effectively to the increased demand from population growth and lower interest rates over 2020-2022.

Auckland’s experience demonstrates how increased housing capacity from upzoning can lead to improved housing affordability. In fact, rents and house prices have been on a lower growth path in Auckland compared to the rest of the country. Despite this progress, Auckland’s housing affordability remains a significant concern, with the median price at eight times the median household income. Increasing housing capacity further could potentially aid in reducing the cost of developing housing and improving affordability.

In conclusion, if improving housing affordability is the goal, then serious consideration needs to be given to increasing the capacity for new homes. At the same time, it’s equally important to evaluate trade-offs involved and arrive at a balanced approach to addressing the issue.

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