As a result of the astronomical boom in New Zealand house prices over the past few years, the country continues to face a significant housing crisis. This crisis can be best understood across three key areas: overpriced rentals, physical housing shortages, and construction. —
While reports often celebrate the rise in new entrants into the market (i.e., millennials finally buying homes for the first time), the fact that the market still consists of a significant number of multiple-home owners is less conveyed. These property investors fuel the housing shortage by making possible homes for sale unavailable to potential first home buyers. This, in turn, has led to rental asking prices increasing rapidly due to higher rental demand and lack of alternative options for young people priced out of the market. As a result, many renters are now required to lease homes at exorbitant prices, and those who cannot afford these increases are falling into homelessness.
This issue is compounded by the literal lack of housing supply, with the country having under-invested in building new homes and communities for years, despite the growing population. While there are moves to address this issue, there currently remains a backlog that has left many without an affordable place to live.
There are, however, some solutions that may help to address New Zealand’s housing shortage. For one – thanks, in part, to the Great Recession – the past decade has seen a growth in young families opting to build and own smaller homes (often on wheels) instead of renting larger properties. This trend, often referred to as the ‘tiny house movement,’ has partially opened up more properties for rent or sale.
For another, a shift in construction towards prefabricated and other off-site building solutions has also led to reduced construction costs and a faster turnaround time in home building. If this particular sector within the construction industry continues to grow, and is effectively supported through governmental policies and infrastructure investment, it may well prove a significant player in adding much-needed affordable houses to the New Zealand market.
Name: Tom McSherry
Email: Send Email
Organization: Able Spaces
Release ID: 89042212