Dunedin's residential construction is already meeting
demand. Photo by Stephen Jaquiery.
Signs are emerging that Dunedin's residential
construction industry has already ramped up sufficiently to
rectify the shortage that has built up, Westpac chief economist
Dominick Stephens says.
In a report released yesterday, Mr Stephens described
Dunedin's residential construction industry as an
The people per house (PPH) ratio had been rising in recent
years and now stands at the same level as it was in the late
That suggested a shortage of housing had built up.
The Dunedin City Council issued 379 consents for new
dwellings in 2012, a 60% increase over the number issued in
The outright number of people per house currently ranged from
2.3 in Otago to three in Auckland, he said.
Urban areas tended to have a higher number of people per
house than rural areas.
''It is difficult to draw strong conclusions from regional
differences in the level of people per house. These might
reflect the regional population's age structure, ethnic
composition, level of wealth, or simply the prevalence of
Mr Stephens preferred to look at the rate of change in the
In the assessment of the country's housing supply and
construction, Auckland was found to have a shortage of
housing and was building far too few houses to keep pace with
forecast population growth, he said.
''Auckland will experience a strong lift in residential
construction activity over coming years - rising house
prices, rising building consent numbers, improving economic
confidence and anecdotes from industry all suggest this
process has already begun.''
The annual rate of new dwelling construction would have to
double before it could be said Auckland was building enough
houses to keep pace with population growth, Mr Stephens said.
The Auckland City Council issued 4582 consents for new
dwellings in 2012. Westpac calculated to keep pace with
population growth and get the number of people per house
gently trending downwards, the number would have to rise to
9500. Even then, it would take many years to unwind the
shortage of houses that had built up, he said.
''A sceptic might argue that Auckland is incapable of
doubling the rate of dwelling construction due to the
ever-present tangle of red tape and expense associated with
However, 12,277 consents for new dwellings were issued in
Auckland in 2003 and the industry had shown it was capable of
such activity levels.
There was little reason to expect much change in building
activity elsewhere in New Zealand. There was ''tentative
evidence'' to suggest Wellington, Hamilton and Palmerston
North might need a modest lift in building activity to keep
pace with population growth.
Conversely, evidence suggested Nelson might be building too
many houses relative to population growth, he said.
Everywhere else, the current level of building activity was
sufficient and there was little reason to expect a change in
the rate of construction activity, Mr Stephens said.
Southland was seen as having sufficient residential building
work in progress.
The Westpac people per house measure was developed in 2008 to
assess housing supply throughout New Zealand. The Canterbury
earthquakes complicated the nationwide analysis and the
latest assessment was applied on a regional basis.
Canterbury was excluded from the latest assessment because
the earthquakes had brought about an obvious shortage of
housing, he said.
In ''normal times'' the number of people per house should
slowly reduce as families shrank, the population aged and
society became wealthier.
Abnormal changes in PPH might indicate the prevailing rate of
construction activity was unsustainable.