Cheap housing supply failure

Measures to improve Auckland’s supply of affordable housing have been described as a ‘‘dismal failure’’.

Auckland Council’s Planning Committee received an update on the provision of affordable housing in the city’s special housing areas on October 10.

A report to the committee revealed that fewer than 100 ‘‘affordable’’ houses destined for the free market were built under the Auckland Housing Accord, which ran for three-and-a-half years from 2013 in conjunction with central government.

It had a target of 39,000 new sites and dwellings to be consented across Auckland.

Council data showed there were 3157 houses completed in the special housing areas, of which just 580 were classified as affordable.

Of those, 482 were ‘‘retained affordable’’ – largely destined to be social housing. Just 98 were available for sale to the wider public, 30 of which were in Hobsonville Point.

Over the period the accord was in place, the Auckland median house price rose from $530,345 to sit at $817,119 now, the committee was told. Councillor Chris Darby, chairman of the Planning Committee, told media the initiative had failed on its aim to deliver affordable housing.

Property market analyst Rodney Dickens said the average section price in Auckland had doubled since 2013, too. ‘‘[Council has] done nothing to get down land costs, to get down development costs,’’ he said.

‘‘They’ve sped up processing a bit but they haven’t made progress in the areas that matter.‘‘

He said in most cases the special housing areas were going to be developed anyway.

‘‘Increasing supply doesn’t impact on price if you don’t change the cost of production ... there’s something fundamentally rotten in Auckland and Hamilton and Tauranga now have got the same disease.’’ He said if the initiative had been successful in keeping a lid on section prices, the city’s property market could look quite different. ‘‘If the Auckland section price was still what it was in 2013 the average house price would be over $200,000 less.’’

But property market commentator Olly Newland said the criticism was unrealistic.

He said too many people expected houses to ‘‘grow like mushrooms out of the ground’’.