Housing affordability in the spotlight

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For the past year or so, housing has been shaping up as one of the major election issues for 2014.

Over the past few decades house prices have skyrocketed which has been great for home owners, but pretty awful for wannabe first home buyers.

That’s exactly what has eventuated, with both National and Labour coming out with housing policies at the end of August and beginning of September.

As a result, housing has been in the media spotlight, with commentators questioning how we got to this position, what can be done to make housing more affordable and whether or not we have the resources to build the quantity of affordable homes that the politicians are suggesting.

This year we are tracking towards 24,000 building consents nationally. 59% of those are in the Auckland and Canterbury regions. That’s significantly up from the number of consents issued over the past three to four years.

Actually, in July we had the most number of consents in a month since the boom in August 2007. How many of those homes are affordable? I would suggest that it’s not too many.

From a labour perspective, as an industry we have just been through an extended bust cycle where apprentice numbers dropped by about 50%, and our labour force was downsized to allow for the downturn.

3000 apprentices short

In early September, the Building Construction Industry Training Organisation (BCITO) ticked over their 9000th apprentice for the year and, as you’ll hear mentioned often on this topic, we’re still about 3000 short of meeting the labour demand.

Projections indicate that these sorts of numbers will be required until at least the 2020s.

With the Christchurch housing rebuild in full flight, there will come a time in the near future when builders and building companies will need to think about the future. Downsize? Diversify? Relocate?

The affordable housing market might just be the opportunity that some need to carry on.

Regardless of where you are from geographically, a good deal of thought will need to go into the business model for builders in the affordable housing market to ensure there is enough margin for a sustainable business.

This may also require a rethink about the way we operate — including everything from prefabrication to land prices, developers’ contributions to multi-unit dwellings, smaller houses to funding models.

If New Zealand is serious about providing affordable entry-level housing, we are going to need a collective, co-ordinated response from builders, sub-trades, regulators, developers, manufacturers and suppliers.

It’s not often our sector gets the kind of media and political attention we have at the moment. Our challenge is to maximise the opportunity presented to us and make New Zealand a better place to live.

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