New Zealand's housing shortfall will be met in around 12 months' time, major bank predicts

A major bank is predicting New Zealand's housing shortfall will be met in around 12 months time. 

On Tuesday, Housing Minister Megan Woods announced she expects 1260 new homes from the latest injection of cash from the Government's Housing Acceleration Fund, to help Auckland's shortage of 25,000 houses. 

Five Auckland suburbs - Mt Roskill, Māngere, Northcote, Tāmaki and Oranga - will share $282 million from the $3.8 billion fund announced in March to help pay for roads, pipes and other housing infrastructure. 

"We're stepping in with funding for these areas to fix decades of under-investment in infrastructure that will have wider benefits for the communities, including improved sewerage, and flood prevention," Woods said on Tuesday.

An economic note prepared by ASB found that the housing shortage in New Zealand declined as expected over the last 12 months but they were surprised by how much of that shift had come from Auckland. 

"We believe Auckland and NZ's cumulative housing shortfall will be met in around 12 months' time," ASB said in their economic note released on Thursday. "The housing sector could potentially shift from shortfall to surplus over 2023."  

The New Zealand housing market has been dramatically undersupplied since 2015 with Auckland's shortage dating back to 2011 that have seen property prices rise. 

COVID-19 has been disastrous for many small businesses and people not able to see loved ones but it has been a blessing for the housing market. 

The pandemic saw the unprecedented move of closing the New Zealand international border which capped arrivals into the country and allowed the building sector to finally catch up. 

"Housing construction is now running at extremely high levels and these levels cannot be sustained without a large and sharp recovery in net migration over 2022 and 2023," ASB said.  "Once the NZ border restrictions are relaxed and home isolation of international arrivals is allowed, indicators to watch over the coming year are StatsNZ permanent and long-term arrivals estimates, rents and land prices for signs the balance of the housing market is shifting from shortfall to surplus."