There has been a fresh round of media housing crisis scaremongering in last few weeks. It would appear that Radio New Zealand, Stuff, News Hub, the Green and Labour Party are all under the impression that because first home buyers in Auckland are currently borrowing record amounts that the housing crisis in unsolvable. The reserve bank has released data that shows the average first-home buyer is borrowing a record $390,000 to help move them into their first house. This is a 43% increase from two years ago.
While each of these publications and groups name increasing the supply of houses as the obvious fix, there is definitely a sense of cynicism around the actual effectiveness of this alone. It is possible that the lack of optimism around simple supply and demand working itself out is due to a report recently published by Auckland Council.
While this report could be a desperate cry to the Government to help, or a way of shifting blame if the Unitary Plan doesn’t work as well as all hoped, it has our media in a fluster. It appears that everyone has given this the ‘once over lightly’ and not drilled down into the zoning maps and rules.
In short thousands of sites have been “up zoned” and Council has removed the supply restricting density control in most residential zones. Just think about that for a minute, we have gone from the door effectively being closed to increased housing supply in the suburbs to the sky being the limit.
Council have also removed the maximum density control in most of the residential zones which has been a major part of the supply problem. So now there more options for each site which will lead to a wider range of housing options to better suit demand at a price and dwelling size point.
Economics 101 – Supply and demand has to apply (subject of course to Council officer’s buying into the lack of restrictions). And as supply – both in number and type there will be more houses built at a size and cost to meet the market requirements.
Since the appeals period closed without serious opposition and news on the High Court appeal is the 2040 Coalition are just raving NIMBY’s in disguise, the way has been paved for 99% of the Unitary Plan to be made operative. Following the fall of this final domino we have been inundated with people who are looking to take advantage of their properties being “up zoned”.
And while there are still many variables in the world of property development the biggest and slowest to change is always district plans and zoning, and yet here we are with a brand spanking new plan, offering up new land and new ways to develop existing land. Other variables such as bank funding, building costs, interest rates, immigration policies and Council interpretations change with the wind and will always be a constant, albeit a changing constant.
So I call it now. The Unitary Plan has opened the door to a dramatic increase in supply such that in five years there will not be a housing crisis.
The Unitary Plans has attracted criticism and in the future may give rise to other infrastructure issues but to be sure, by approving the Unitary Plan, Auckland Council have ensured that the days of the district plan zone and density being the supply constraint are over.