Duncan Garner vs Bill English on NZ's housing shortage

The Prime Minister has butted heads with The AM Show host Duncan Garner on the first morning of MediaWorks' new morning news programme.

The topic was housing, which the Opposition has called the National Government's Achilles' heel.  A report obtained by The AM Show showed Treasury was presented with a report last year, compiled by ANZ economists, warning New Zealand is 60,000 houses short of what it needs.

Mr English - who was Finance Minister when the report was provided to Treasury - told The AM Show he didn't accept that number - but while acknowledging there is indeed a shortage, didn't have a figure to fire back.

ENGLISH: "As I understand, it's a rough estimate by ANZ some time ago. What's happening is we've now got the highest levels of construction going on in the country that we've ever had. We've had five years of pretty strong growth in house-building. Over the next two or three years we're going to build about the number of houses in Dunedin again, in New Zealand. The houses are turning up on the ground. And of course we're working with the councils, because with our billion-dollar infrastructure fund, we want to get more on the ground faster, because in the long-run, that's the answer."

GARNER: "Are you saying this advice from the ANZ bank, who have some pretty heavyweight economists, are you saying it's wrong?"

ENGLISH: "It's a rough estimate they've made, and in any case you can't manufacture tens of thousands of houses out of fresh air. The construction industry's been building up fast, in Auckland they built 10,000 houses last year."

GARNER: "Which is still short though, isn't it? Building 10,000 a year is not the 13,000 or 15,000 that you need, and it's not the 17,000 the Auckland Accord wanted, so you're still miles short."

ENGLISH: "I wouldn't say it's miles short, but look, it's building up from a lot less than that. As I said, across the country we've got the largest construction pipeline we've ever had after five years of strong growth, and it's going to keep growing and it's the right answer."

GARNER: "If it's not 60,000, which ANZ have put a figure on, which you got as Finance Minister, what is it if it's not 60,000?"

ENGLISH: "I don't know exactly what the best estimate would be. What will tell us a bit is the prices. There are some signs of cooling in the prices - we're yet to see if that continues through the year. But either way, the answer to high prices is build more houses."

GARNER: "And you're not building enough - that's 60,000 short, and whether it's 40,000 or 50,000 or whatever number you want to pick up on, prices will stay high because you're still short. You've been in office eight years, heading into your ninth year, and you're still short."

ENGLISH: "Well as I said, it's been building up from a pretty low base in 2009, 2010. You might remember there was a recession back then. Everyone stopped building houses because the economy, then it's had to pick up - all the rules have changed around the councils, there's eight or 10 major initiatives that have gone into the current momentum which sees us building the 10,000 in Auckland, there will be 30,000 across the country, and it's going to keep going."

Statistics NZ figures show 9930 homes were consented in 2016, up 7 percent on 2015 - but just because a home is consented, doesn't mean it's built.

 Statistics also show the number of apartments consented decreased - but it's apartments and other medium- to high-density housing New Zealand wants and needs, according to Labour.

Auckland in particular needs affordable housing - but fewer than 500 a year consented in the city fall into that category, Labour says.

As of October last year, only 18 affordable houses had been built across the city's 154 special housing areas, out of 1400.

The average price of a home in Auckland according to Quotable Value is just over $1 million, up 72 percent in just four years.