We've heard whispers (and some yelling) about New Zealand's property price issues slowing down for over a year now. While there have been small relief in Auckland and Christchurch, Wellington continues to rise, despite its purely speculative outlook. Unlike Auckland or Christchurch, the Capital isn't seeing population rises or new job creation, making its property market the definition of a bubble.
The Government announced this month that its 2017 Budget has set aside $100 million of unused Crown land for 2700 of the proposed 34,000 new houses that are to be built in the Auckland region.
This all sounds positive, except from an industry point of view we still don't know if the Government is getting its property vision right. The nation remains focussed on building affordablehouses using inexpensive materials and cheap labour. Admirable as this sounds from a political standpoint, what New Zealand will end up with in a decade's time is thousands more low-quality state-sanctioned houses with numerous problems that homeowners can't afford to fix.
What is New Zealand getting so wrong about housing in this country? From an industry perspective we think Auckland and Wellington need to take a look at Christchurch's success in post-quake residential efforts: Cantabrian developers have done a lot of work on medium-density, low-rise apartments which take up a smaller footprint, but house more people in quality surroundings.
If New Zealand wants to keep growing and enabling homeowners, medium- and high-density housing in and around CBD areas is vital. In no other prosperous nation in the world can you expect to have a three-bedroom house and a back yard within 20 minutes drive to the city. To put it bluntly, it's time to give up the quarter-acre dream.
If we look at cities like Hong Kong, New York, or Tokyo, high-quality apartments suitable for families are the way forward in the 21st century. The property industry will welcome more efficient utilisation of space, materials, and future-proofing if New Zealanders can finally get on board with dense urban living.