Auckland Region Housing Market Assessment
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Auckland Region Housing Market Assessment PREPARED BY Darroch Limited FOR THE Centre for Housing Research, Aotearoa New Zealand NOVEMBER 2010 ACKNOWLEDGEMENTS This report was produced for the Centre for Housing Research, Aotearoa New Zealand (CHRANZ), and co-funded by the Auckland Regional Council. The CHRANZ Board gratefully acknowledges the financial and other support provided by Housing New Zealand Corporation. DISCLAIMER The opinions in this report reflect the view of the authors and do not necessarily reflect those of the CHRANZ Board or the funding organisations. No liability is accepted by the CHRANZ Board or the Auckland Regional Council for the accuracy or omission of any statement, advice or information in this research report and for any commercial, investment or other decisions made upon the reliability of this research report. Auckland Region Housing Market Assessment Volume 1: Main Report For Centre for Housing Research Aotearoa New Zealand By Darroch Limited (August 2010) Table of contents 1.0 Executive Summary 7 2.0 Project and Report Overview 20 2.1 Introduction 20 2.2 Project Aims 20 2.3 Housing Market Assessment Methodology 21 2.4 Auckland Housing Market Assessment Objectives 26 2.5 Housing Market Assessment – Key Terms 26 2.6 Housing Market Area Definition 29 2.7 Summary of Research Data 31 2.8 Report Structure 32 3.0 Auckland Profile and Housing Market Overview 33 3.1 Introduction 33 3.2 Demographic Profile 33 3.3 Economic Structure, Trends and Forecasts 37 3.4 Auckland Housing Market – Framework for Analysis 41 3.5 Housing Demand, Choice and Consumption 44 3.6 Auckland Housing Market Consumption Trends 47 3.7 Auckland Region Governance Reforms 51 4.0 Demographic Structure, Trends and Projections 54 4.1 Introduction 54 4.2 Demographic Overview 54 4.3 Household Projections 61 5.0 Labour and Employment Market Trends and Projections 63 5.1 Introduction 63 5.2 Labour Market Engagement 64 5.3 Employment by Occupational Structure 65 5.4 Employment by Employment Node 66 5.5 Workplace Geography Patterns 69 5.6 Projected Employment Growth 76 5.7 Projected Employment Growth and Housing Demand 81 6.0 Strategic Issues 84 6.1 Introduction 84 6.2 Land Use Management 85 6.3 Transport Strategy and Infrastructure 90 6.4 Wastewater, Storm Water and Water Services Infrastructure 101 6.5 Development Capacity 103 7.0 Housing Stock 107 7.1 Introduction 107 7.2 Current Housing Stock 107 7.3 Social Housing Stock 118 7.4 Third Sector Housing Stock 125 Page 1 8.0 Housing Market Trends Part 1 – Prices, Dwelling Consents and Development Activity 130 8.1 Introduction 130 8.2 Sale Price Trends 130 8.3 Rental Trends 141 8.4 Dwelling Consents 146 8.5 Residential Development Activity 150 9.0 Housing Market Trends Part 2 - Housing Affordability 153 9.1 Introduction 153 9.2 Financial Housing Stress by Demographic Characteristics 154 9.3 Intermediate Housing Market 159 9.4 Affordable Purchase Price, Lower Quartile House Sale Price, and the Deposit Gap 160 9.5 Affordability – Median Household Income 162 9.6 Hours of Work Affordability 165 9.7 Recipients of an Accommodation Supplement 167 10.0 Housing Market Outlook and Total Demand Forecasts 170 10.1 Introduction 170 10.2 Overview 170 10.3 Key Assumptions 171 10.4 House Price Forecasts 172 10.5 Total Demand Forecasts 174 10.6 Demand Capacity Balance 197 10.7 Forecast Affordability Trends 198 10.8 Demand by Dwelling Type and HMA 200 11.0 Future Housing Need 202 11.1 Introduction 202 11.2 Housing Need Definition 202 11.3 Current Total Housing Need Estimates 203 11.4 Forecast Growth in Financially Stressed Households 207 11.5 Future Requirement for “Other Need” Housing 212 11.6 Conclusion 219 12.0 Implications 221 12.1 Introduction 221 12.2 Auckland Housing Market in 2026 222 12.3 Key Implications 224 13.0 References and Bibliography 234 Page 2 Acknowledgement Darroch Consulting and Research would like to thank all the housing providers, social and government agencies and the specific people in those organisations spoken to for their time and assistance. In addition, we would like to acknowledge the assistance provided by the Auckland Regional Council staff that provided us with information. We appreciate their input. In addition, we would like to acknowledge the assistance provided by: − Housing New Zealand; − Ministry of Social Development; − Statistics New Zealand; − Territorial local authority staff, particularly those involved with managing their social housing stock; − Third sector housing providers in the Auckland Region who have assisted us; and − Market Economics Limited. This report incorporates data available up to November 2009 and the analysis was completed in December 2009. It does, however, reference a number of reports published after December 2009. Every effort has been made to ensure the soundness and accuracy of the opinions, information, and forecasts expressed in this report. Information, opinions and forecasts contained in this report should be regarded solely as a general guide. While we consider statements in the report are correct, no liability is accepted for any incorrect statement, information or forecast. Darroch Limited disclaims any liability that may arise from any person acting on the material within. Readers should take professional advice from a member of Darroch Limited prior to acting on any matter contained in this report. Page 3 Appendices – Volume 2 Appendix 1 Introduction to Appendices Appendix 2 Housing Market Assessment Boundaries Appendix 3 Demographics Appendix 4 Work Place Geography Appendix 5 Residential Land Use Management Appendix 6 Infrastructure Appendix 7 Dwelling Capacity Appendix 8 Residential Development Activity Appendix 9 Residential Development Profiles Appendix 10 Modelling Methodology Appendix 11 Demand by Tenure, Dwelling Type and HMA Appendix 12 Social Housing Waiting List Data List of Figures Figure 2.1 Housing Market Area (HMAs) Boundaries 30 Figure 5.1 Auckland Region – Spatial Distribution of Employment by HMA 2009 67 Figure 7.1 Age of Auckland Region’s Housing Stock 111 Figure 7.2 Standalone Dwelling Stock Age 112 Figure 7.3 Multi-Unit Dwelling Stock Age 114 Figure 7.4 Spatial Distribution of Housing New Zealand’s Housing Stock as at June 2009 119 Figure 8.1 Median House Price Trends – Northern Housing Market 1996 to 2009 136 Figure 8.2 Median House Price Trends – Southern Housing Market 1996 to 2009 137 Figure 8.3 Median Sales Price for Standalone (Three-bedroom) Dwelling by Area Unit (Year end June 2009) 138 Figure 8.4 Median Sales Price for Multi-Unit (Three-bedroom) Dwelling by Area Unit (Year end June 2009) 139 Figure 8.5 Three-Bedroom Dwelling Rental (median) by Area Unit (Year end June 2009) 144 Figure 8.6 Total Dwelling Consents for the Auckland Region 1991 to 2009 146 Figure 8.7 Total Consents (number of dwelling units) - 1996 to 2009 by Meshblock 148 Figure 9.1 Financial Housing Stress by Gross Household Income 2009 154 Figure 9.2 Financial Housing Stress by Household Type 2009 155 Figure 9.3 Financial Housing Stress by Ethnicity 2009 156 Figure 9.4 Financial Housing Stress by Employment Status 2009 157 Figure 10.1 Auckland TLAs House Price Indices 1990 to 2009 172 Figure 10.2 Net Overseas Migration 1995 to 2010 177 Figure 10.3 Net Internal Migration 1976 to 2006 178 Figure 10.4 Relative Proportion of Overseas and Internal Migrants by HMA 2001 to 2006 181 Figure 10.5 Household Demand Forecasts by Age 2006 to 2026 183 Figure 10.6 Household Demand Forecasts by Composition 2006 to 2026 189 Figure 10.7 Multi-Unit to Total Housing Stock Ratio 2006 and 2026 201 Figure 11.1 Spatial Distribution of Financially Stressed Renter Households as a % of Renter Households 2009 205 Figure 11.2 Spatial Distribution of Financially Stressed Renter Households by Number 2009 206 Figure 11.3 Expected Growth in Total Need by HMA 2009 to 2026 216 Page 4 List of Tables Table 1.1 Financial Housing Stress and Intermediate Market Households 2009 12 Table 1.2 Forecast Growth in Housing Demand 2006 to 2026 13 Table 1.3 Total Housing Need 2009 to 2026 15 Table 1.4 Total Rental Market Demand and Social & Third Sector Investment to Maintain Current Ratios 18 Table 4.1 Household Projections by HMA 2006 to 2026 62 Table 5.1 Labour Force Status by HMA as at 2006 64 Table 5.2 Auckland Region – Occupational Structure 1996 and 2006 65 Table 5.3 Occupation Location Quotients by Housing Market Area as at 2006 66 Table 5.4 Employment Change by Employment Node 2000 to 2009 68 Table 5.5 Housing Market Area Residents (Renters) who are Employed by Place of Work (by Employment Node) 2006 70 Table 5.6 Housing Market Area Residents (Owner Occupiers) who are Employed by Place of Work (by Employment 71 Node) 2006 Table 5.7 Housing Market Area Residents who are Employed by Place of Work (by Housing Market Area), 2006 72 Table 5.8 Employment Projections by Sector 2006 to 2026 77 Table 5.9 Employment Projections by Occupation 2006 and 2026 78 Table 5.10 Employment Projections by Territorial Local Authority 2006 and 2026 79 Table 5.11 Employment Projections by Industry Sector and TLA Share 2006 to 2026 80 Table 5.12 Projected Household and Employment Growth by TLA 2006 to 2026 82 Table 6.1 Auckland Region Dwelling Capacity Synopsis 104 Table 6.2 Darroch Auckland Region Capacity Estimates as at June 2006 106 Table 7.1 Occupied Dwellings by HMA and Dwelling Type 2001 and 2006 108 Table 7.2 Proportion of Occupied Dwellings by HMA and Dwelling Type 2001 and 2006 109 Table 7.3 Growth in the Number of Occupied Dwellings 2001 to 2006 110 Table 7.4 Standalone Dwelling Size