New Zealand's Economy
New Zealand's Housing Crisis
Why New Zealand house prices rose to among the least affordable in the world, the policy responses like a foreign buyer ban in 2018, and Auckland's upzoning.
New Zealand faces a severe housing crisis.
Prices
House prices rose to among the least affordable relative to incomes in the developed world, peaking in 2021.
Causes
- Restrictive zoning limiting supply.
- Low interest rates.
- Population growth.
- Tax treatment favouring property investors.
Responses
- Foreign buyer ban in 2018 on most existing homes.
- Auckland’s Unitary Plan (2016) allowed denser housing, increasing building consents.
- National rules for medium density.
Results
Studies found Auckland’s upzoning increased construction and eased rents.
The townhouses
In an Auckland suburb, an old house is replaced by several townhouses after upzoning.
Thinking foreign buyers were the main cause
Supply limits mattered most.
Key takeaways
- New Zealand housing became very unaffordable.
- Zoning limited supply.
- A foreign buyer ban came in 2018.
- Auckland's upzoning boosted building.
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