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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