‘We inherited a disaster’: Twyford

Official figures prepared for the new housing minister estimate a shortfall of 45,000 houses in Auckland and almost 10,000 homes in Wellington, with supply of new homes well behind increased demand.

Across New Zealand, there is a shortage of 71,000, leading to new minister Phil Twyford saying his Government has ‘‘inherited a disaster’’.

The estimates, which were never made public, were included in a briefing for Twyford from his new ministry that was partially released to The Dominion Post.

The briefing compares the country’s population increase with the rate of new houses actually built – not just consented.

In Wellington as of June 1, 2017, the Ministry of Business Innovation and Employment (Mbie) put the shortfall at 9312 homes, following a huge growth in demand through 2013 to 2015.

In Auckland, the situation was far worse, with a 44,738 deficit. Every year since 2013, the gap has been growing in Auckland, with just 9725 completed homes in the year to June 1, compared to a estimated rise in demand of 18,007.

The National Government often rejected similar estimates.

Officials noted below the estimate that ‘‘this shortage of supply relative to demand has contributed to a large growth in prices, as well as increase to rents’’.

They also acknowledged that this was one measure among many, and different assumptions about the size of households could show different results.

The nationwide figure took into account houses destroyed in the Christchurch earthquake.

‘‘We’ve inherited a disaster,’’ Twyford said. ‘‘This shortfall is one of the main reasons we saw house prices double on National’s watch – the average house increasing by around half a million dollars.’’

The shortfall will prove to be a serious challenge for the new Labour-led Government, which has promised to dramatically increase the housing supply.

Twyford said it wasn’t going to happen overnight but the Government would do its best to turn the deficit around.

‘‘On the current settings, officials have advised that the deficit wouldn’t be eliminated until past 2030. We’re going to do our darnedest to turn that around.’’

In February, then Prime Minister Bill English rejected an ANZ calculation that put the national shortfall at 60,000 homes as an ‘‘erroneous estimate’’.

In June, former Housing Minister Nick Smith rejected estimates of an Auckland housing shortage of between 30,000 and 40,000 in Parliament, saying the best measure was price.

‘‘It is now universally accepted across commentators, since about October last year, that house prices in Auckland have not moved an iota.

‘‘So I think that is a powerful signal that that supply curve and that strong growth is getting supply and demand into balance.

‘‘If things were so bad, prices in Auckland and Christchurch would not be flat to falling,’’ National’s new housing spokesman Michael Woodhouse said, rejecting the numbers as ‘‘hot air’’.

‘‘We are in the middle of the biggest building boom in generations and consents are reaching 13-year highs.

‘‘Mr Twyford appears to be creating an alibi for when his Kiwibuild programme fails to deliver his promised 100,000 homes on top of the massive build programme the National Government already had underway.’’