The Bank of New Zealand’s Tony Alexander is the latest expert to question the “Unitary Plan” for Auckland’s housing market (explained last week), claiming the projected building of 422,000 houses in Auckland over 25 years is unrealistic as it requires a volume of building that previously took 161 years to achieve. From Interest.co.nz:
In his Weekly Overview report Alexander notes the Unitary Plan’s aim for 422,000 extra houses to be built over the next 25 years requires an annual construction rate 2.5 times higher than the average achieved over the past 25 years. Canterbury achieved 1.5 times post-earthquake.
“Look at this another way. As at the 2013 census there were 509,000 dwellings in Auckland. In 2001 there were about 420,000. The plan is another 422,000 in the next 25 years, in other words doing in 25 years what it took 161 years to do following the designation of Auckland as the country’s capital by the first Governor William Hobson in 1840,” Alexander says.
“That target looks highly unachievable unless we invite a few of the tens of thousands now unemployed migrant construction workers in Middle Eastern countries to help out, for more than the US$324 a month they earn in the likes of Saudi Arabia. That is not going to happen”.
Alexander’s comments follow the release of damning modelling revealing that just 15% of new homes would be priced under $800,000, and fewer than 2% would be priced under $600,000 under the Unitary Plan.
Another major issue is that Unitary Plan has maintained Auckland’s Rural Urban Boundary (RUB) – albeit expanded it by 30% – thus leaving incentives in place for developers to continue cornering the land market, drip feeding supply, and maintaining high prices.
So, while it is commendable that New Zealand is attempting to tackle Auckland’s housing crisis head-on, it does not go anywhere near far enough and is destined to fall well short of expectations.
