New Zealand’s housing crisis must be radically reframed and thought about much more holistically claims new research from JLL New Zealand, published today.

Planning reforms, shared-ownership, build-to-rent and improved access to finance for building companies are just some of the options which must be on the table if we’re to improve housing affordability and address growing social inequality nationwide.

The research also shines new light on the nature of the affordability challenge in New Zealand. Whilst much commentary has focussed on the core cities of Auckland and Wellington, the paper makes clear that the greatest challenge faces those in tourist hot-spots such as Thames-Coromandel; identified as the least affordable district in the country. Grey, on the South Island’s west coast, in contrast, is the most affordable place to live.

Dubbed ‘Operation Moonshot’, in reference to the focused, co-creative effort undertaken by the United States to get a man on the moon within a decade, the JLL research paper outlines the types of debates and ideas which are necessary to make positive inroads to improving affordability and housing access throughout New Zealand.

JLL New Zealand Head of Strategic Consultancy and Head of Wellington, Jonathan Manns MBE, says the key to success is for a diversification of the market to support a wider range of products and delivery mechanisms across the country. He suggests that policies must be developed which are wider than the housing sector alone – government, developers, building industry and lenders – with a genuinely strategic approach to the challenge and balancing growth across the country.

"The current model isn’t working and doing more of the same is not sufficient to fix the broken market. It’s time to look and act differently.”

“There is no silver bullet, but a new, mission-oriented approach could help us take significant steps forward. A failure to do so risks fuelling the inequality which already exists both between and within generations.”

Manns says gaps between wage earnings and house prices are fuelling an affordability divide that is disproportionally affecting some regions in New Zealand – and it’s many of New Zealand’s traditional holiday destinations that are bearing the brunt of housing unaffordability. Thames-Coromandel, Kaipara, Far North, Western Bay of Plenty and Tasman all feature in the country’s top 10 least affordable regions.

“Ten years’ of house price growth has created ‘winners’ and ‘losers’ but if we don’t act now, we risk entrenching inequality for many years to come. We need to think differently about everything from the way we direct growth, support communities and build cities to the type and tenure of homes we live in.

“It’s time we started a dialogue and reframed the conversation towards solutions, not only around what’s proposed, but other ideas and initiatives we could implement to tackle the challenge head on.”

Key housing challenges facing New Zealand

• Median house prices are 8.3 times more than median household incomes
• A 20% deposit for the median home now stands at $173,800; this requires 14 years of saving on the average New Zealand wage
• The least affordable places are connected cities and tourist destinations, with the most affordable being poorly connected and remote. The least affordable district is Thames-Coromandel. The most affordable is Grey.

Proposed solutions

• Create liveable, high-density cities with transit orientated development
• Improve access to finance with lending options like a Government Accelerator Bank to support New Zealand’s house-build industry, the majority of whom are SMEs
• Help Kiwis onto the housing ladder with shared ownership models
• Bolster rental availability by creating a national build-to-rent fund
• A National Spatial Plan to temper demand between house price and wage disparity

© Scoop Media