NZ population is now increasing at 14 people for every new rental property, up from 4 people between 2000-2012 (The black line in the chart below). Landlords are no longer creating enough rental properties to house the growing number of people in New Zealand. That includes Kainga Ora (Housing NZ).





Collecting data from three series and comparing/combining them suggests that we are no longer creating enough rentals to satisfy demand growth. This is supported by shortages in advertised rentals. The three series I collected include:

Rental growth rates - from the growth rates of Active Bonds published on MBIE’s site Population growth rates from Stats - here Growth of Kainga Ora rental dwellings - OIA and here

The data has very different scales so I have “normalised” some by dividing Population growth by 10,000 and Rental growth by 1000 to get all lines on one graph. I used the number of people per new rental as the base because that is the key bit of information - that there is a lot more new people per new rental than the old expected statistic of about 4. This means and increase in density of people per household in NZ.

NZ population grew suddenly from 2014 to 2019 as is evident from the dotted red line in the chart. The growth in new rentals is mostly driven by the private sector, because Kainga Ora growth rates are minimal. Total supply is not growing adequately as is evident from the blue line in the chart.

The number of rentals added to NZ rental stock used to be around 12,000pa, but over the last 3 years it reduced to 8,000pa and last year it was just 5,500 - including the Kainga Ora additions of 225 in 2019. Kainga Ora plans to build 1,994 homes this coming year, that will not be enough to supply a market where private supply is shrinking during debate over new regulations.

The rate of increase in new population per new rental dwelling demonstrates a lack of sufficient growth to supply the market. It is obvious from sales rates and rental advertising on completion, that new landlords are being recruited via apartment construction. The new apartment market is feverish, and may result in over-supply of that market, but this may not resolve the dwelling shortage. These stats show supply is shrinking overall, most likely due to existing landlords actually leaving the market.

A big failure is lack of strong growth of social housing at just 225 last year. Kainga Ora’s 2020 plan is for an additional 1,994, which is not going to get the number of new people per new rental back to 4 if landlords continue to leave the industry.

Edit 5th March - New Chart showing YoY growth by region - just click on the dropdown for National to see a region. Some regions are worse than others, Canterbury is a special case due to the earthquake rebuild







