Last month Finance Minister Bill English delivered a budget that focused on Auckland housing, social investment, and infrastructure. With $300 million earmarked to ease pressure on the Auckland housing market, providing more social housing and buying Crown land, many are questioning whether this is in fact enough to boost supply and keep up with ever-rising housing demand.
Housing in Auckland
Within the $300 million earmarked for housing, $200 million will be used to provide more social housing in Auckland, with at least 750 more housing places for people on the social housing waiting list, and to boost income-related rent subsidies to help cover rising rents.
"A large portion of this funding is directed at social housing in Auckland, where the tight property market also has an effect on those in social housing,'' said Paula Bennett, Social Housing Minister.
General Auckland housing is left with $100 million which will be used to free up surplus Crown land for housing developments, continuing the programme started in Auckland last year. Already funding of $52 million has secured 13 hectares of land in Auckland, which could potentially support nearly 1000 houses, apartments and townhouses. With funding now doubled in this year’s budget, up to 2000 new houses could potentially be built in Auckland.
"The programme's goal is to increase the pace of housing development and to put a greater focus on bringing more affordable housing to the market,'' said Housing Minister Nick Smith.
National Policy Statement
Furthermore, Government confirmed a national policy statement on urban development would soon be released, a move which has been applauded as it would direct councils to adjust their plans to allow for more densification. Government also indicated it would intervene if Auckland Council does not agree to adjust its plans.
"Opening up more land is a good thing - but any belief that doing so will reduce house prices is naive. We need tens of thousands of new homes in Auckland - so the best that can be hoped for is to reduce that backlog as quickly as possible so as to slow house price inflation down from its current dizzying heights. But house prices aren't going to drop anytime soon'', said Property Institute of New Zealand Chief Executive Ashley Church.
For first-home buyers there are no specific measures in the Budget, as Government says these are already being looked after through KiwiSaver subsidies and HomeStart Grant. Just ahead of the budget a $41 million investment in emergency housing was announced, with Government confirming that grants to help house homeless people will be brought forward from September to June.
Change is in the air
If Budget 2016 has got you thinking about building or buying a home, or you have questions about how you can access your KiwiSaver as a deposit for your first home, give me a call or send me an email so we can discuss your financial future.
