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Housing shortfall could boost landlords

Auckland's housing shortage is set to continue for many years, a new Council analysis suggests - and that's not all bad for landlords.

Thursday, August 6th 2015, 2:12PM

by Miriam Bell

Using a BNZ-developed system, the Auckland Council's Housing Project Office analysed expected population growth and estimates of how many houses might be built over the next 14 years.

The results indicate that Auckland's housing shortage will get worse before it gets better, with the shortfall rising from 15,000 to over 24,000 by 2018.

By 2025, the shortfall would have fallen back down to around 15,000 - which is the Council's estimate of  the current level.

By 2028, there would still be a shortfall of more than 11,000.

These figures are based on medium population growth and assumes that 11,000 to 12,000 building consents are issued each year - and that 80% of them are actually built.

However, over the last 12 months, just 8100 building consents were issued in Auckland.

The shortfall could also be aggravated by prolonged high population growth.

Building and Housing Minister Nick Smith told media that consents were not being issued quickly enough.

But he said the building of new homes in Auckland was going as fast as possible, given capacity constraints in the construction workforce.

This news has mixed implications for landlords.

NZPIF executive officer Andrew King said that a bigger housing shortfall would create an increased shortage of rental properties as well.

"But, as yields are pretty low at the moment, I think that, in that situation, lots of landlords would look at upping their rents a bit to boost their returns."

Many would also benefit from the higher value of their properties.

King said there was not much more the Council and the Government could do to alleviate Auckland's housing shortage.

"It might help for them to cut back on the red tape surrounding building and development more though."

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

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