The New Zealand government is looking at ways Tamaki Redevelopment Co can help boost the supply of affordable housing, which forms part of its focus on the nation's "unbalanced" property market, Finance Minister Bill English says.
The entity, set up in 2012 as a joint venture between central government and Auckland Council to rejuvenate the suburb, is expected to build about 7,500 new houses over the next decade, which will increase the area's housing stock by 5,000 after old properties have been removed or demolished, English said in a speech to the Auckland Chamber of Commerce and Massey University.
"We want to accelerate this type of activity, so small and large redevelopments of Housing New Zealand land and properties are completed with more urgency," he said. "The Cabinet will soon make further decisions about Tamaki and we will be in a position to confirm details in the next few weeks."
The government is narrowing its focus on housing this term, having already signalled an overhaul of social housing, as it seeks to mitigate some of the financial stability risks posed by artificially high house prices, and the inequity that follows.
English said the government wants to increase the supply of affordable housing, particularly in Auckland where prices have surged ahead of the rest of the country as a lack of supply fails to meet increased demand from a growing population.
Affordable houses account for just 5 percent of new builds, compared to 30 percent 25 years ago as developers focus on higher end properties to recoup the cost of land, infrastructure and building, he said.
"Poor planning and rising input and construction costs have increased housing costs as a proportion of low and middle income household budgets," English said. "We have the opportunity in the next few years to secure lasting solutions while demand conditions are positive and there is broad agreement on how to fix supply constraints."
Reserve Bank governor Graeme Wheeler yesterday told policymakers 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. While steps had been taken to address through the introduction of special housing areas, which fast-track consent processes, more could be done in restrictions limiting building in the inner-city, he said.
English today said the gross domestic product was expected to expand at an average of almost 3 percent over the next five years. The positive outlook faces risks around lower dairy prices, rising oil prices, or a sharp drop in house prices, while the strength of the Chinese and Australian economies were less visible risks.
He said he expects the Chinese government will head off any major threats to rebalancing growth in the world's second-biggest economy, though Australia's slowing meant New Zealand can't rely on its closest neighbour as much as it has in the past.