Housing Minister Megan Woods 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.
"Auckland has an estimated housing shortage of more than 25,000 homes. Replacing ageing pipes and improving roading is essential to future proof and grow these communities."
Woods said the Government and Auckland Council have identified the areas as places where they want growth. While the Government is putting in more money in this early step, Auckland Council will contribute more funding later, she said.
Prior to this, the Housing Acceleration Fund allocated $136 million to unlock capacity for an extra 2000 homes in eastern Porirua, with the replacement of water infrastructure to service existing and future homes.
The Government announced in June that, in major urban areas such as Auckland, Tauranga, Wellington, Christchurch and Hamilton, projects accessing the fund will be expected to deliver at least 200 additional homes per development.
In other areas that are not so large, projects will be expected to deliver at least 100 additional homes. This will apply to Whangārei, Rotorua, New Plymouth, Napier-Hastings, Palmerston North, Nelson Tasman, Queenstown and Dunedin.
In other smaller areas of the country, projects should result in at least 30 new homes.
Housing is shaping up to be one of the Government's major challenges, with house price growth showing little sign of slowing down, in part due to lack of housing supply.
The latest New Zealand Property Report found that 10 regions, including Auckland, have hit record-high average asking prices. The average asking price in Auckland was up 21.3 percent to $1.2 million.
Vanessa Williams, a spokesperson for realestate.co.nz, said there were "several factors, including low stock, high demand and decades-old legislation that has led the market in this direction".
There are some positive signs, such as record housing consents. In the year to September, 47,331 new homes were consented, up 25 percent.
"Come rain, shine or lockdown, it seems there are plenty of buyers searching for property across the country. For years, we've seen supply not meeting that demand," Williams said. "This month, we're starting to see signs of a shift, particularly in the lower North Island."
Last month Labour and National united in a rare display of unity to help solve the housing crisis by forcing councils to build up in urban areas and allow more subdivisions.
To do that, the Government's National Policy Statement on Urban Development (NPS-UD) that directs councils to make room for growth both 'up' and 'out' by 2024, has been fast-tracked by at least one year.
Under the changes, people will be able to build up to three homes of up to three storeys on most sites, without the need for resource consent. Most district plans currently only allow for one home of up to two storeys.
Modelling by PwC found the proposed rules were expected to add 48,200 to 105,500 dwellings, over the next five to eight years.
ACT leader David Seymour says councils need more incentive to build infrastructure.
"Last year the central Government collected about $2 billion worth of GST on the construction of new residential homes. Our proposal is, share that billion dollars with the councils," he said last month.
He said $1 billion of infrastructure funding "would go a long way to ensuring that councils could actually deliver the pipes and the community centres and the libraries and all of the footpaths and other things that they need to upgrade in order for these houses to truly be built".