Improving Housing Affordability

Bill English Finance

The Government has announced a number of measures to improve housing affordability in New Zealand.  We know our housing market is not as efficient as it could be – housing costs are too high, and there isn’t enough land available for residential purposes.

Because of the high costs of home ownership, most Kiwis need to borrow large amounts to buy a home, which has significant implications for our wider economy.  It means money spent servicing housing debt cannot be invested in more productive investments. 

In fact, New Zealand’s very high levels of private sector debt rank us alongside European countries for our overall indebtedness.  The high cost of housing also exposes taxpayers to increasing demands for State assistance – which is forecast to rise to almost $800 million a year by 2015/16.

The Government’s work programme is comprehensive, and will build on the work we are already doing to reduce the costs and complexities acting as a barrier to residential development.

Over time, we are confident the housing market can include, rather than exclude, more Kiwis who aspire to home ownership.

Click here to read the Finance Minister’s press release.

Increasing land supply

The Government will work with local councils to increase the land made available for residential purposes.  We will explore how we provide greater direction to local government about increasing land supply, look to supply more greenfields and brownfields developments, and examine ways to allow further densification of cities, where appropriate.

Reducing delays and costs of the RMA

Resource management reform will help reduce the costs, uncertainties, and delays which are frustrating the development of more residential areas.

We will introduce a six month time limit on medium sized consents to give developers more certainty and speed up the process for consents.  We will also consider a zoning presumption that all land is zoned for housing unless specifically excluded.

Click here to read the Environment Minister’s press release.

Improving the provision of infrastructure to support new housing

The Government will consider new ways to fund infrastructure – such as roads, water, and waste water facilities – that services new subdivisions.

Improving productivity in the construction sector

The Ministry for Business, Innovation and Employment will undertake a market-level inquiry into the construction sector to identify barriers to improving housing affordability.  For example, could Building Consent Authorities be amalgamated into a regional, or even a national hub?

Building on our progress

The Government already has a number of measures in place to help address the affordable and social housing needs of New Zealanders, and ensure our stock of social housing is in the right place and servicing tenants in need.

We have:

  • Carried out more than 60,000 upgrades to state houses including significant work on making houses warmer and drier.
  • Already insulated over 185,000 private homes plus installed clean heating devices through the Warm Up New Zealand: Heat Smart scheme.  And we’ve boosted the number of additional houses that can access the insulation grant by another 41,000.
  • Built 600 more state houses, including 87 built through the Jobs and Growth package.
  • Introduced reviewable tenancies to ensure state houses are provided to those in need, while those who no longer need state housing are supported to find alternative accommodation.
  • Partnered with social housing providers through the Social Housing Unit to provide more affordable social housing options.
  • Moved on 400 state housing tenants for vandalism, fraud, and other serious anti-social behaviour, and replaced them with tenants in genuine need.

The Productivity Commission has endorsed the general direction the Government is heading, through the provision of more social housing in areas where it is most needed.  We will boost the Social Housing Unit next year, through the pilot of some small-scale transfers of Housing New Zealand land to non-Government housing providers.

Click here to read the Housing Minister’s Press Release.