REINZ calls for housing shortage to be tackled in budget

May 16, 2018 | News

Housing

New Zealand currently has a significant housing shortage across the country, and the Auckland shortage is around 60,000 properties alone. Until we’re able to start to back-fill some of that shortage, houses are only going to continue to remain unaffordable for first time buyers and those on lower incomes. Therefore, it is essential that a solution is found to this problem in order to help reduce the shortage and drive housing developments forward.

Part of that solution needs to include a programme which ensures houses can be built quickly to keep up with demand, there needs to be less red tape for local councils and developers to deal with and we need to build warmer/drier homes than we’ve seen in the past. Significant funds need to be invested in the KiwiBuild programme, as it is the obvious solution to the problem.

One way to build houses more quickly is to include high quality, prefabricated homes and building processes as part of the KiwiBuild programme. For example, the use of prefabricated building techniques can save significant time on a building site as many of the components are built off site – in some cases this has been as high as 60%. Additionally, it means less disruption for neighbours, particularly from a noise pollution perspective, as much of the ‘noisy’ work can be done offsite in factories. According to PrefabNZ, the membership organisation that informs, educates and advocates for innovation and excellence in offsite design and construction in New Zealand, the speed at which prefabs can be built will result in a 10% lift in construction industry productivity.

Additionally, we need more investment in social housing. In terms of the ‘social’ aspect of housing, homes need to be:

1. affordable – in order to ensure first time buyers are able to enter the market as home ownership is at its lowest point in 60 years
2. more flexible – to meet the demands of the population and to respond to the changing dynamics in family sizes such as providing variety across smaller and larger homes
3. readily available – especially for those who need social/emergency housing requirements.
Lastly, we would like to see money put aside for grants (e.g. insulation) to help continue raising the quality of New Zealand’s housing stock.

Investors

The retail investment market is currently under significant cost pressure to provide renters with housing stock that meets legislative requirements. Within a relatively short space of time the Healthy Homes requirements were passed, the methamphetamine standard was used as a reference for tenancy tribunal adjudicators, the asbestos requirements have been implemented and the Bright Line tax has been extended to five years – all of which comes at a potential cost to investors. Also, recently announced is the proposed ban on letting fees and a proposed end to the negative gearing rules. These two further pieces of legislation could potentially backfire in that it causes significant cost to investors and leads to a significant shortage in rental properties as investors sell their properties. Landlords provide a valuable service to our communities across the country and we are concerned that this service is being forgotten by a government that is confusing them with speculators who are only in the market for the short-term and are out to make a quick profit.

Infrastructure

REINZ would like to see investment in infrastructure in order to expedite the building of satellite cities and to support developers in being able to build more properties in order to help reduce the housing shortage.

Regional Investment

REINZ welcomes the $1 billion Provincial Growth Fund that was launched in February by the Minister of Regional Economic Development, Shane Jones. Investment in some of these major projects in the regions will boost tourism, create new job opportunities and allow regional New Zealand to flourish which is essential in order for the wider economy to continue on a strong growth path.
It is essential that the money already designated for the regions in these announcements remains available and that it doesn’t get diverted towards other projects.

Transport

Investment in public transport needs to be a priority for the Government, particularly in our largest cities where housing development continues to move further from the CBD where there is significant availability of greenfield/brownfield land available for residential housing.

Education

REINZ would like to see resources allocated towards upskilling New Zealanders in order to help meet the housing shortage. Construction and building related courses need to be given urgent funding.

Immigration
We need enough people to be able to complete the KiwiBuild programme and end New Zealand’s housing shortage. Whether that is in the form of a ‘KiwiBuild visa’ or some other initiative, it is imperative that Labour’s immigration targets don’t impact the speed with which we build houses, as in the long run this could end up hurting New Zealanders as our housing costs continue to remain unaffordable for first time buyers and those on lower incomes.

Read the story on Scoop here.

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