Media release: New Zealand’s ‘missing cities’
Wellington (22 August 2014): New Zealand faces a chronic housing shortage the size of three major cities within 20 years, according to a new report from the New Zealand Initiative.
The report claims claims the country could reach a shortage of 113,800 houses by 2031 and official figures underestimate the scale of the crisis.
New Zealand Initiative Executive Director Dr Oliver Hartwich says current construction levels are much lower than officially forecast, with serious implications for the housing market.
“The crisis is far more urgent than we think. If we don’t build at least 113,800 additional houses within 20 years, we could see Auckland house prices match or even exceed Sydney levels within that time.
“This is the greatest crisis facing New Zealand and unless we ramp up supply well beyond current levels, home ownership could be out of reach of most families within 20 years,” Dr Hartwich says.
The Initiative’s figures are based on official projections for demographic change and population growth, and current construction levels. They show New Zealand’s aging population is set to create a generational housing mismatch of ‘empty nests’ and ‘crowded houses’.
“You’ll see more and more houses with one occupant while next door you’ll see larger numbers of people crowded together,” Dr Hartwich says.
Dr Hartwich cites the German city of Cologne, which experienced similar demographic shifts between 2001-2009 as official median projections indicate for New Zealand.
“Despite their population growing by only 1,400 over that time, almost 20,000 new houses were needed to cope with the mismatch resulting from their aging population. It was a hugely valuable lesson and New Zealand need to take notice.
“The solution is simple. We need to build more and we need to build now,” Dr Hartwich says.
The report recommends creating development districts to finance construction, giving local government greater financial incentives, and reforming water provision as three steps toward addressing the shortage.
For more information and contact details visit www.nzinitiative.org.nz
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Contact Peter Graczer, Sputnik 027 450 4506