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**muppet** · 24-04-2007, 09:08 PM

Government working on 'housing supply'

5:10PM Monday April 23, 2007
By Anne Gibson
Unaffordable Houses: The end of the Kiwi dream

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Auckland is facing a housing crisis of massive proportions with more than 40 per cent of the population projected to be renting within the next nine years.

Even the well-off are faced with a lifetime of renting, locked out of homeownership by escalating house prices, a report released by property consultants DTZ today shows.
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REPORT FINDINGS:
* Working households cannot afford even lower-end housing
* Renters including more families with children and older people
* Renting a lifestyle choice for those cannot afford suburbs of choice
* Homeownership down 8% between 1991 and 2001
* Projected to decline a further 7% to 58% by 2016
* An extra 50,000 rental properties required over 10 years
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Home ownership levels are plummeting, wealthy people cannot afford a house and the city will need at least another 50,600 houses and flats in the next decade to meet the rising tide of demand from those barred from become property owners, the report says.

The authors expect just 58 per cent of Aucklanders to own a house by 2016, down from 73 per cent in 1991.

Housing Minister Chris Carter said the Government was working on measures to increase housing supply, but they would require "compromise and new thinking".

The measures would form the basis of a consultation document that would be circulated this year. Legislation would follow next year if it was deemed necessary.

Issues to be examined included ensuring property speculators did not sit on land; ensuring a mix of different sized properties in new developments, so at least some were affordable to first-home buyers; and improving consent processing by local councils.

Green Party co-leader Russel Norman said the answer was not to release more land, which would create urban sprawl, but to upgrade Auckland's rail network, which would encourage greater "urban density".

"A much better answer is the electrification of the Auckland rail network which will create the opportunity to increase urban densities along the rail routes because the electric rail units will be cleaner, quieter and more frequent than the current diesel units."

Greater urban sprawl would lower quality of living as it would force more people into long daily commutes in their cars, Dr Norman said.

Hardest hit

The report found young families and the elderly would be hardest hit and these two groups would be increasingly likely to rent in future, squeezed between relatively low incomes and high house prices.

The report by Ian Mitchell of Wellington was released by the Centre for Housing Research and found even high-wage households earning $50,000 to $70,000 annually are suffering "housing stress", paying more than 30 per cent of their gross income on housing costs.

He found the number of households unable to afford to buy even the cheapest house had risen from 20,400 in 1996 to 54,900 last year, a 169 per cent increase.

"Renters have become a more diverse group incorporating more households with children and older renters who will increasingly out-compete single-parent and single-person households that have traditionally relied on the private rental sector," the report said.

"There is growing evidence of renting becoming a lifestyle choice for households that cannot afford to buy in suburbs of their choice.

"The fall in ownership rates combined with underlying population growth suggests an additional 5600 rental units will be required every year for the next 10 years in the Auckland region."

It added that the investment required to increase private rentals would be possible under if strong price growth continues. But it might slow if there is moderate or low growth in house prices.

The report concluded: "Given the limited capacity of housing policy to influence house price cycles, and the ability of government programmes to mitigate some of the affordability problems faced by target groups, the authors support a supply side focus for housing policy over the medium to long term."

- NZ HERALD STAFF / NZPA / NEWSTALK ZB

http://www.nzherald.co.nz/section/1/...ectid=10435700

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