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Purpose
The aim of this report is to suggest policy improvements that could enhance the performance of the housing market and the effectiveness with which it meets the needs of New Zealanders.
Methodology
The Commission has reviewed the key features of the housing landscape in order to identify opportunities to improve the housing sector’s capacity to meet consumers’ preferences for housing that is safe, comfortable and affordable. While housing is largely a private market, the way in which the market operates is heavily influenced by its regulatory and institutional framework. Hence the Commission has focused on ways to improve this framework. While many of the Commission’s proposals apply nationally, there is a particular focus on Auckland, given that the challenge of providing adequate housing for a rapidly growing population is largely one for Auckland, although a small number of regional centres will also struggle. The Commission has also concentrated on ways to increase affordability for those on lower incomes, where the biggest social issues are found.
Key Results
Although the future direction of the New Zealand housing market is difficult to predict, the policy recommendations outlined in this report are not contingent on a particular outlook. These recommendations converge around three themes for improving housing affordability, removing impediments to home ownership, and providing appropriate rental accommodation.
- An increase in the supply of land for housing, and a less constrained approach to urban planning more generally, in the interest of improving housing affordability.
- Pursuing opportunities to achieve scale and reduce costs in land development and building and construction.
- A regulatory framework that facilitates and encourages cost-reducing and quality-enhancing innovation,
and where the benefits of regulation are achieved at least cost.
These three themes are mutually dependent. Getting the necessary scale economies in land development and home construction will not happen unless there are sufficient amounts of land released in the right areas and at the right price. At the same time, planning and building regulation needs to work in a way that facilitate rather than impedes development and construction. It is only when these three core elements work together in a self-reinforcing way that we are likely achieve any real impact on housing affordability.
The policy improvements outlined in this report are aimed at improving the performance of the housing market and the effectiveness with which it provides housing for New Zealanders. The ultimate objective is a housing market capable of meeting changing demands for housing in a cost-effective and affordable way over the long term and well beyond the length of a typical house price cycle.