Professional services giant PriceWaterhouseCooper believes recent moves, on the part of the Reserve Bank and the government, won’t prevent the Auckland housing market from remaining a risk in the near future.
But there are two additional courses of action which might further help alleviate the problem.
PwC partner Richard Forgan said increasing supply takes time as new dwellings aren’t built overnight.
While the demand-side measures might have some impact, he said none will really address the fact that population, and thus demand, is growing much faster than supply.
“What it’s really all about is population: the number of people in the Auckland region is growing rapidly and the number of houses is not.
"This pressure is now being brought to bear on both demand and supply sides.”
Forgan said more active investment in social and economic infrastructure to open up greenfield areas and liberalisation of building product regulation could help out the Auckland housing market significantly.
Aligning infrastructure investment with targeted housing areas is crucial, he said.
For example, the success of the greenfields areas in the south of Auckland will be dependent on the ability for the transport network to connect people’s homes to their places of work.
This means the capacity driven by the City Rail Link and the Southern Motorway projects are critical to the commercial attractiveness of these developments.
“Yet the CRL is being delivered five years later than the Southern Initiative if the government’s timeline for the project is accepted.”
When it comes to building products, New Zealand is a small market with an NZ-specific regulatory regime for product certification, he continued.
“As such, the costs of market entry limit variety for products and reduce price competition.
“The food we eat and the medicines that cure us are subject to a joint NZ/Australian standard so why aren’t building products?”
Additionally, Forgan suggested that more urban regeneration projects and addressing restrictive rules around height and density to allow for more brownfield development could also prove effective.
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