Pandemic provides “rare opportunity to make a meaningful dent in our housing shortage,” says economist
New Zealand’s shortage of housing supply will fall further over this year, driven by the ongoing slow-down in population growth, according to an economist at Kiwibank.
Jeremy Couchman, senior economist at Kiwibank, told stuff.co.nz that the border closure from the COVID-19 pandemic and the subsequent drop in population growth “occurred as residential construction was fast gathering pace.”
Read more: “Fundamental factors” could slow housing market down – ANZ
“It took one crisis (COVID-19) to help alleviate another (a chronic shortage of houses),” Couchman told stuff.co.nz. “Nevertheless, we look at the silver lining here. COVID-19 has provided a rare opportunity to make a meaningful dent in our housing shortage. It’s an opportunity that still presents itself. We expect New Zealand’s border to remain closed – bar a limited number of quarantine free travel bubbles – well into 2022.”
Couchman said that, based on Kiwibank projections, New Zealand’s accumulated housing shortage will “fall further this year and next.”
“More importantly, we estimate that housing supply and demand could finally balance some time in 2024,” Couchman told stuff.co.nz. “However, the outlook is highly uncertain. Future demand for housing will be dependent on our border fully reopening. And when the border does reopen, will there be a flood of arrivals or a hesitancy to cross borders? On the supply side, capacity constraints are ever present, and a slowing housing market may also take the heat out of home building.”
