Government ministers are offering differing levels of reassurance to prospective homebuyers as debate continues over the future of Auckland’s housing market. While Finance Minister Nicola Willis encourages confidence, the government is also moving to adjust a major housing intensification plan.
Government Weighs Housing Policy Adjustments
The National-led government is planning to tweak directions to Auckland Council regarding Plan Change 120, which allows for zoning of up to two million new houses in the city through increased density. The plan has faced criticism, particularly from National MPs representing Auckland electorates concerned about the impact of intensification on their communities. Finance Minister Bishop stated the two million figure had become an “unfair lightning rod for criticism” and that adjustments began in December to make the plan “more politically sustainable.”
Despite concerns about intensification, Willis expressed optimism about the market, stating, “You should buy a house in Auckland because this is a country with great prospects.” She also noted a significant increase in first-home buyers under the current government, which she described as “a good sign.”
Differing Views on Market Confidence
When asked directly whether Aucklanders should have confidence in the housing market, Willis responded with an emphatic “yes, absolutely.” Epsom MP Paul Goldsmith echoed this sentiment, stating “absolutely!” when asked the same question. However, Goldsmith also cautioned against speculating on house prices, stating he would not comment on potential market crashes.
North Shore MP Simon Watts also expressed confidence, noting strong buyer appetite in his electorate and positive signals regarding the broader economy. He acknowledged the need for a “balance” in the plan change to address affordability concerns for first-time buyers.
What’s Next?
The government’s planned tweaks to Plan Change 120 could lead to a more moderate approach to intensification in Auckland. This could potentially slow the pace of new housing construction, but may also alleviate concerns from residents and local MPs. If economic conditions continue to improve, as suggested by Watts, the housing market could see further stabilization or modest growth, as most forecasters predict price increases in the mid-single digits this year. However, a significant economic downturn could still trigger further price declines.
Frequently Asked Questions
What is Plan Change 120?
Plan Change 120 is a directive to Auckland Council that zones land for up to two million new houses to be built in the city, primarily through intensification, over the coming decades.
What is the government’s position on falling house prices?
Bishop has been one of the few political figures to support falling nominal house prices, while most politicians have historically focused on increasing wages to improve affordability.
Are government officials offering consistent advice to potential homebuyers?
While Finance Minister Willis encourages confidence in the market, other MPs have been more cautious, with some declining to comment on potential price fluctuations.
As the government navigates these complex issues, what level of confidence do you have in the future of the Auckland housing market?
