Auckland inner-city height restrictions weighing on supply, RBNZ's Wheeler says
New Zealand's government has taken a number of good steps to improve housing supply in Auckland, where prices have soared on a lack of new stock, but could take a look at height restrictions in the inner-city to address the shortfall, according to Reserve Bank governor Graeme Wheeler.
The nation's biggest city has a shortfall of between 15,000 and 20,000 properties to meet population growth, and the 7,500 annual consents for new building permits is lagging behind the 10,000 it needs to address the shortage, Wheeler told Parliament's finance and expenditure select committee. The government's steps to improve supply by introducing special housing areas where consents could be fast-tracked had been "very good to open up new areas" to help deal with the shortfall, though more could be done in restrictions limiting building in the inner-city, he said.
"Work needs to be done in inner-Auckland in increasing the height restrictions and 'not in my backyard' syndrome," Wheeler said. "The government has done a good thing in asking the Productivity Commission to look at the sorts of issues that might relate to zoning conditions, regulatory reform, approval processes and we'll be interested to see the outcome of that."
Earlier this month Wheeler told the Canterbury Employers' Chamber of Commerce he was monitoring the Auckland property market closely as house prices accelerated in the face of cheap credit, a rising population and limited supply. In 2013 he imposed restrictions on the level of low-equity mortgage lending private banks could write as a means to take the heat out of the property market.
Wheeler today told legislators the special housing areas faced a challenge in converting that fast-tracked consent into actual building, and whether they would be able to attract buyers, who would weigh up their location on the periphery of Auckland against infrastructure concerns, such as transport costs.
He declined to comment on whether central government should build more houses itself.