New Zealand’s housing stock was worth around $25 billion in 1980. By 2000, it had increased to $232 billion. Then, property prices found yet another gear.

In December 2020, the Reserve Bank declared that the total value of NZ’s housing stock had reached a staggering $1.4 trillion. It begs the question: why does the value of NZ’s real estate continue to skyrocket?

New Zealand’s housing shortage

New Zealand does not have enough houses to meet demand. While our housing market is complex and there are several drivers behind price increases (low interest rates, government policies), lack of supply is widely thought to be the core problem.

According to Infometrics data, we had a nationwide shortage of 40,000 homes in 2019, with a shortage of over 30,000 in Auckland alone.

Supply and DEMAND

When there’s not enough supply to meet demand, prices increase. That’s exactly what’s happening in New Zealand right now – and especially in Auckland and Wellington where median prices have reached $1.15 million and $885,000, respectively.

To help solve the ongoing supply problem, Williams Corporation is building affordable, high quality homes throughout the country. Purchasing a home or investment in one of our developments is an opportunity to both contribute to a solution and own a high quality asset that is likely to appreciate in value.

Is there an end in sight for the shortage?

Thanks to property developers and builders, New Zealand is creating new homes at a record-setting pace. In fact, consents issued in Auckland in March 2021 were the second highest since records began – beaten only by November 2020. 

Despite this impressive progress, the shortage continues. Real Estate Institute of New Zealand acting chief executive Wendy Alexander recently said properties for sale were at a record low:

“In May, there were less than 15,000 properties available for sale across the entire country. This is the second lowest level of total inventory we’ve seen since we began collecting records, and properties are still selling relatively quickly for this time of year which is when we usually start to see things slow down a bit.”

While it’s difficult to predict what’s next for NZ’s property market, it seems likely that the shortage and resulting price increase will continue. In the meantime, we’ll keep building homes for New Zealanders to try and maintain the balance.

Find out more about Williams Corporation developments here.