Recent studies show that Auckland, New Zealand is in the grip of a protracted housing shortage that doesn’t seem to show signs of abating any time soon. In fact, Auckland’s Housing Project Office (HPO), which was initially formed in 2013 in anticipation of looming housing concerns, projected that the city’s housing deficit could rise to 25,000 homes by 2018.The reasons for this lack of Auckland real estate range from diminished construction to an increased migrant population seeking opportunity within the city limits. Overall, New Zealand saw a gain of 58,300 immigrants over the last year, with roughly half of these new residents choosing to settle within Auckland. While numerous housing developments are underway, government officials are already calling for an increase of such construction plans, in addition to creating incentive programs to entice new residents to live outside of the city proper.
Housing Prices Are Also on the Rise
As the demand for Auckland New Zealand real estate is projected to rise, housing prices are expected to follow suit. Interest rate increases are to blame for higher housing prices, which will be harder on new buyers than those with existing loans. Those with loans currently in place will have some protection thanks to the market being comprised mostly of fixed-rate loans with much shorter terms.
Trends towards increasing interest rates can prove extremely troubling to home owners as more and more of their disposable income will go towards such expenditures. Though a slight pricing slow-down is expected, higher prices along with less access to housing is creating a problem for both renters as well as home owners residing in the city.
New Home Permissions Intended to Combat the Housing Issue
To help combat the shortage of real estate in Auckland New Zealand, a record number of planning permissions were cleared during the initial months of 2015. These permissions totaled more than any preceding year, which officials hope will quell the lack of housing experienced by both new and current residents. Auckland in particular saw a high number of new construction permissions, with the city showing an 18% increase of future home construction.
While new construction will certainly help keep the housing shortage under control, complete elimination of the deficit will require even more construction to take place. According to the Productivity Commission, approximately 13,000 new homes will need to be built each year to ensure housing growth continues. As far as Auckland real estate itself, 90% of the proposed new construction must take place to do away with the housing shortage by 2027.
Impression Real Estate Limited
430 Queen St
Auckland, 1010,
New Zealand
+64 9-300 5001
http://impression.co.nz
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