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Real Estate Investar Blog

Auckland needs 76,000 to ease housing problems

housingIt will take an extra 76,000 houses to bring Auckland into line with household sizes in the rest of the country, an economist has suggested .

BNZ chief economist Tony Alexander says there have been various estimates of the size of the city's housing shortage, ranging from 12,000 to 13,000 by the Salvation Army, to about 22,000 by the Department of Building and Housing in a 2009 report.

"But what is it one defines exactly by a shortage?," Alexander asks in a blog.

"Sufficient to keep people out of garages, tents, caravans and sleepouts? Sufficient to have one family per house and not two or three? Sufficient to have one bedroom per child?"

Given that there were three people per house in Auckland in 2013, Alexander calculates how many houses it would take to reduce that number to 2.58 - the number of people per house outside Auckland.

His number is 76,000 dwellings.

"No-one uses a figure near this, but hopefully what we have illustrated is that a simple re-stating of what shortage means can lead to an estimate well away from other numbers," said Alexander.

He said that hopefully this also illustrated that unless there was a massive surge in building in Auckland on top of normal supply, the gulf between Auckland house prices and the rest of the country would continue to widen.

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