Despite widespread construction sector doubt that delivering 10,000 more homes/year is beyond New Zealand’s capacity, Housing & Urban Development Minister Phil Twyford continued to talk yesterday as if the Government’s KiwiBuild initiative would deliver precisely that: 100,000 affordable houses over the next 10 years.
Treasury forecasts showed that KiwiBuild would boost residential construction investment by 10% by 2022.
The country, and particularly Auckland, has been running well short of housing demand, and well short of the previous government’s aspirations to get more homes built.
Consents have been stuck on an annual rate of 30,000 new homes for months. I wrote in July that, at an average 2.7 residents/household, New Zealand’s population increases of the preceding 2 years would have required housing increases of 36,000 homes built in the year to June 2016, and 39,300 built in the year to June 2017 (ignoring demolition or falling into disuse).
Mr Twyford said yesterday: “The latest forecast in the half-year economic & fiscal update shows an extra $5.4 billion of residential construction investment will take place over the next 4 financial years, largely as a consequence of KiwiBuild.
“Ministry of Business, Innovation & Employment projections under the previous National government had shown the number of houses consented would stall and start to fall in coming years. This government is focused on turning that around.
“Through KiwiBuild & policies to drive speculation out of the market, including the ban on non-resident foreign buyers, the Government is delivering a more stable housing market.
“Wages are forecast to grow faster than house prices for the first time since the global financial crisis, and interest rates are expected to remain low. Home ownership will become more affordable for New Zealand families.
“The Government will make these forecasts a reality by:
- delivering 100,000 affordable homes through KiwiBuild
- building more state houses, rather than selling off the ones we have
- ensuring there is enough skilled labour, through our immigration settings & training initiatives
- freeing up land supply
- enabling infrastructure financing, and
- enabling higher productivity in the building industry.
“The Government’s housing package will deliver more affordable homes, more state houses, improve the quality of rentals & security of tenure, and tilt the balance in favour of homebuyers, rather than speculators.”
Attribution: Ministerial release.