High house prices
In the 2010s housing issues were at the forefront of public policy debate. With house prices increasing at a faster rate than incomes, housing had become ever less affordable for first-time home buyers, shutting many out of the home-ownership market. High prices were driven by lower interest rates, high immigration, a tax system that favoured rental housing investment, and expectations of future house-price increases. Calls were made for long-term rental housing tenancies among groups that would have previously moved into home ownership. Because the private rental market was characterised by short-term tenancies, it was uncertain whether private investors could meet this new demand.
To increase housing affordability the government introduced measures to help some low- and middle-income earners into home ownership, including a housing subsidy for KiwiSaver (superannuation) account holders. Private organisations such as the New Zealand Housing Foundation also helped low-income people into their own homes through initiatives such as shared ownership schemes.
Out of reach
In 2012 Craig Bradley and his wife Carla lived in the South Auckland suburb of Red Hill. Craig earned $900 a week from three jobs and paid $340 a week in rent. The couple had no prospect of buying a house. They needed $20,000 to $30,000 for a house deposit, but ‘at the moment we haven’t got 20 or 30 cents,’ conceded Craig.1
Supply and demand
There was also a shortfall in new housing construction, especially in areas of high demand such as Auckland. In 2010 the level of new housing construction in New Zealand was below population growth rates. The shortfall saw a slowing of new household formation as more people remained living at home rather than going flatting.
Forecasters predicted that the construction industry would rise to meet the shortfall in the long term, but some issues needed to be addressed first. These included planning regulations that inhibited new residential land supply or more intensive use of existing land, and increasing productivity rates and management skills within the residential building sector to lower costs. One solution to increase productivity and lower material costs was to use more prefabricated materials and standardised components.
Another issue for the sector was to provide housing that met the needs of an increasingly diverse population. The days of the ‘one-size-fits-all’ two- or three-bedroom dwelling had passed. New challenges included:
- bigger houses for Pacific families, which were often larger than average
- smaller dwellings for older people who were still able to live in their own homes
- new housing designs that accommodated different cultural practices, such as the concepts of tapu and noa (sacred and non-sacred) in Māori society
- changes to regulations to allow higher housing densities in rural areas for communal-style living.
Harnessing the sun
In 2012 the Energy Efficiency and Conservation Authority noted that New Zealand receives about 2,000 hours of bright sunshine each year. It calculated that if every New Zealand home had a 3-kilowatt photovoltaic solar panel system, they would collectively generate enough power in a year to satisfy over a quarter of New Zealand’s annual residential electricity needs.
Future emphasis was likely to be on building warmer and more energy-efficient houses, including by improving insulation materials, making greater use of double glazing, and using photovoltaic cells to harness solar energy. Increasing the energy efficiency of older homes was a further task. Research showing that cold and damp homes increased disease rates led the government in 2009 to introduce subsidies to retrofit uninsulated homes.
Sprawl or containment
One point of intense debate was whether new housing should continue to sprawl over new sites or be contained within existing urban limits. Proponents of containment argued that housing densities on existing land should be increased because it was easier and cheaper to provide and maintain urban infrastructure – streets, water and sewerage, and public transport. Their opponents claimed that restricting the amount of residential land increased its cost and made housing less affordable. New suburban housing developments could be made more sustainable through measures like better water management, providing local work opportunities, and encouraging walking and cycling. In 2012 both options were being pursued.