Hamilton housing third-most unaffordable in the country, says new report

Tuesday, 3 September 2019

A new housing report says Waikato has a shortage of 8000 homes with 4000 of these in Hamilton.

Hamilton's housing is the third most unaffordable in the country behind Auckland and Tauranga.

The Waikato Region Housing Initiative – 2018 Housing Stocktake report authored by Nifa Limited and presented to the Waikato Plan Leadership committee on Tuesday put median house prices at 6.2 times the median household income.

Lindsay Cumberpatch, co-chair of theWaikato Region Housing Initiative Working Group addresses the meeting.

The report described this as 'severely unaffordable'.

This is defined by international guidelines which described an affordable house price as three times the median household income. For Hamilton, that is $255,000. However, the city's median house price is $529,000.

* Housing for former Hamilton slum fast-tracked by Government

* A $7 million redevelopment plan for Hamilton's former slum Jebson Place

* Waikato housing help plan gets $2 million kick-start from Hamilton City Council**

'Additionally, it should be noted that the median household income for New Zealand is $85,000, which suggests that the median house price is not attainable for many people.'

The report was undertaken by the Waikato Region Housing Initiative Working Group, which was created by the plan leadership committee.

Working group member, South Waikato economic development manager Paul Bowden, called housing affordability broken.

'Whether you're buying a house at 6.2 times the income or renting a house - in my own area in Tokoroa - a 25 per cent in three years increase in rents. We are effectively creating a nation of slaves, either working for the bank and the mortgage or working just to keep your head above water. It's a mess.'

Hamilton City Mayor and committee member Andrew King said the third least affordable claim was skewered because it failed to take into account Hamilton's high student population, which were not in the housing market when calculating the city's median household income level.

King believed houses in Hamilton were still affordable compared to the national average with startup homes available for around $400,000.

There were proposals out for public consultation that would free up more space for housing to meet the future demand the report predicts.

In Hamilton, it said 26,000 more houses would be needed over the next 25 years.

'That works out at about 1000 a year. We know that last year we built 1552 homes so we're ahead of where we need to be to ensure that this doesn't turn into a housing emergency.

'We're treating it with urgency but we don't believe its a housing emergency because we're concentrating on growth and infrastructure.

'I don't believe we have a housing crisis, but we have to do everything we can to avoid a housing crisis coming.'

The report said the region had a 7500 shortfall of homes with half of these in Hamilton. That number is expected to climb to 51,000 in the next 25 years for the region.

This number is calculated using 2013 census data adjusted for empty dwellings, along with New Zealand's mean household size and Waikato's population.

Working group co-chairman Lale Ieremia said there were not enough houses in the right places for the right people. The stocktake identified the future opportunities for Waikato to solve this issue for itself.

'As a country we have re-built an entire city in Christchurch in the last eight to nine years and we still struggle to deliver housing at mass.'

As well as severely unaffordable, people were also struggling to pay rent or mortgage. Last year more than 8 per cent of the population needed financial top ups to afford rent or mortgage, totaling $9.8m.

The Ministry for Social Development's Waikato region housing register had 896 qualifying applicants in December 2018, a 135 per cent increase in a year. .

It paid $3.2m year-end September 2018 supporting 785 households in the Waikato region for emergency housing special needs grants.

Hamilton business leader Dallas Fisher called the issues raised in the report as 'a big challenge' rather than a crisis.

'We have to be realistic. It's not easy, but for the first time we have measured the problem and we have got a group of people across these various sectors and the whole chain of people that it takes to deliver a house, talking to each other and working on it.'

It recommended establishing a housing database which can model housing stock, supply, demand and affordability with measures across the housing spectrum and have the Waikato Plan establish strategies in response.