FYI,
How the Auckland council estimates for demand for Auckland residential real estate.
Note that the Auckland council does these estimates for urban planning purposes for the longer term needs of the population - infrastructure (such as roads, schools, retail space, parks, electricity, sewerage pipes, sewerage processing capacity, reservoir capacity for water, waste processing, etc) and services (such as sewerage, water needs, rubbish collection, etc). These projects require long term planning.
"Auckland had an average of about 2.9 people per household (private dwelling) in 2001, 2006, and 2013. Applying this simple ratio to the population projections indicates how many more dwellings need to be built to accommodate the population."
Adjusting from fundamental long term demand for housing to market driven demand for housing ...
Whilst I can understand that using a static figure of 2.9 people per household is helpful in long term planning of infrastructure, it is less helpful (even misleading) in calculating market driven demand for housing with changing price levels. Market demand changes with price levels.
To estimate the market demand for housing one might need to adjust the number of people per household for different price levels of rent and house prices. This one keyassumption used to determine housing demand to which the calculation isextremely sensitive - the average household size of 2.9. Given thathousing affordability has significantly decreased since 2001, this numbershould change based on current rent levels and property price levels. As pricelevels increase, the average household size could increase due to lack ofaffordability (of rents or property prices) as young adults delay leaving home,flatmates get more people in the house to afford the rent, grandparents movingin with their adult children and grandchildren, young couples live with their parents, etc. For example there are manyinstances of garages converted into rental accommodation, or additional roomsadded to existing dwellings which would impact overall household sizes. If you change this variable even slightly for current rental and property price levels, then you might get even get market driven housing demand being less than supply in Auckland.
Market driven demand for housing includes property investors, property traders, and property speculators, whilst fundamental long term housing demand does not.
Note that this is different issue altogether from affordable housing.
How the Auckland council estimates for demand for Auckland residential real estate.
Note that the Auckland council does these estimates for urban planning purposes for the longer term needs of the population - infrastructure (such as roads, schools, retail space, parks, electricity, sewerage pipes, sewerage processing capacity, reservoir capacity for water, waste processing, etc) and services (such as sewerage, water needs, rubbish collection, etc). These projects require long term planning.
"Auckland had an average of about 2.9 people per household (private dwelling) in 2001, 2006, and 2013. Applying this simple ratio to the population projections indicates how many more dwellings need to be built to accommodate the population."
Adjusting from fundamental long term demand for housing to market driven demand for housing ...
Whilst I can understand that using a static figure of 2.9 people per household is helpful in long term planning of infrastructure, it is less helpful (even misleading) in calculating market driven demand for housing with changing price levels. Market demand changes with price levels.
To estimate the market demand for housing one might need to adjust the number of people per household for different price levels of rent and house prices. This one keyassumption used to determine housing demand to which the calculation isextremely sensitive - the average household size of 2.9. Given thathousing affordability has significantly decreased since 2001, this numbershould change based on current rent levels and property price levels. As pricelevels increase, the average household size could increase due to lack ofaffordability (of rents or property prices) as young adults delay leaving home,flatmates get more people in the house to afford the rent, grandparents movingin with their adult children and grandchildren, young couples live with their parents, etc. For example there are manyinstances of garages converted into rental accommodation, or additional roomsadded to existing dwellings which would impact overall household sizes. If you change this variable even slightly for current rental and property price levels, then you might get even get market driven housing demand being less than supply in Auckland.
Market driven demand for housing includes property investors, property traders, and property speculators, whilst fundamental long term housing demand does not.
Note that this is different issue altogether from affordable housing.
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