Housing crisis still urgent – but glimmers of hope on horizon

Nearly a decade after booming house prices prompted a reckoning in the political system that New Zealand had a “housing crisis”, and a 2017 election preoccupied with the issue, the circumstances remain broadly similar today.

While political consensus has reached the conclusion that housing supply is the problem, and there has been some positive movement, it might take a decade more to build the country out of this position. There simply aren’t enough houses and, Housing Minister Chris Bishop says, “house prices are too high”.

Since the end of 2017, the national housing stock has grown by 251,200 houses, according to Stats NZ, to 2,110,200 dwellings as of September 2024. Offsetting this has been population growth, estimated to have increased by roughly half a million, from 4.85 million in December 2017 to 5.34 million in September 2024.

A building boom in recent years has helped, but the increase has slowed. Mr Bishop said that the Government’s reforms should promote greater housing supply in a responsive way.

“All of the international evidence shows that the most fundamental sustainable way in the long term to fix housing is to have flexible land markets and flexible infrastructure funding. And that’s what we’re doing,” he said.

“That means directing the ‘up-zoning’ of land for greater density and enabling outgrowth through incentivising councils to develop infrastructure, by creating the system in which its beneficiaries bear the cost – instead of current ratepayers.”

Labour’s housing spokesperson Kieran McAnulty broadly agrees with the current direction. He thinks the housing crisis could be ended in about a decade.

Mr McAnulty said it is not just supply, but also affordability, that needs remedying. He criticised the National-led coalition government’s return of interest deductibility for landlords, saying that is bringing investors back into the market.

The problem will remain when there is a tax system that incentivises investment in property, he said.

FULL STORY

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