Building AucklandA presentation to Auckland BIDs

Presented by David NormanChief Economist, Auckland Council19 August 2019

Visit www.aucklandcouncil.govt.nz – Chief Economist Unit

• Headline drivers

• Housing

• Non-residential construction

• Infrastructure

What I’m covering

Building Auckland: A presentation to Auckland BIDs

• 290,000 more people (2 Taurangas) in 10 years

• Construction

• Professional services

• Tourism

We’re a fast-growing city

Building Auckland: A presentation to Auckland BIDs

• Everything else to service these people

• Central city

• But also huge growth in the south

We’re a fast-growing city

Building Auckland: A presentation to Auckland BIDs

• Auckland likely still adding 26,000 plus people a year

• Total pop’n now over 1.7 million

• But internal emigration stronger

Migration – poor data but strong message

Building Auckland: A presentation to Auckland BIDs

• Peaked at 11% during house price growth

• Currently 4%

Retail

Building Auckland: A presentation to Auckland BIDs

Spending up big = jobs

• Growth more uncertain, especially domestic and China

Tourism

Building Auckland: A presentation to Auckland BIDs

And maybe flattening elsewhere

Housinghysteria

Building Auckland: A presentation to Auckland BIDs

Affordability v the retail boost

Building Auckland: A presentation to Auckland BIDs

“Scary” numbers

Building Auckland: A presentation to Auckland BIDs

Household debt to income ratio

A brief history of Australasian house prices

Building Auckland: A presentation to Auckland BIDs

234%180%

204%

194%191%183%

Peak growth

Decline

-1.1%-15.4%

-9.6%

-0.9%-10.7%-0.2%

Australasian population growth

Building Auckland: A presentation to Auckland BIDs

• Resident demand has 2 components:

• Changes in preferences

• New residents added

Housing supply response

Building Auckland: A presentation to Auckland BIDs

• Auckland has consented too few new dwellings for arrivals, let alone preference changes

Aussie building for non-residents, growth & preferences

Too few new dwellings

Supply is responding but there’s a lot to do

Building Auckland: A presentation to Auckland BIDs

Multi-units are complex

• Multi-unit developments take longer to get consented

• Took off from Jan 2018

• Up 197% since December 2017

Building Auckland: A presentation to Auckland BIDs

Supply by area – 13 months ago

Building Auckland: A presentation to Auckland BIDs

Supply by area – today

Building Auckland: A presentation to Auckland BIDs

Regular updates are available

Building Auckland: A presentation to Auckland BIDs

• For more on these topics, see here.

• Google:“Chief Economist Auckland Council”

• Or email david.norman@aucklandcouncil.govt.nz

Recent growth in non-res consenting

Building Auckland: A presentation to Auckland BIDs

• Where are we housing the new 160,000 workers?

• Floor areas up 95% in 2 years

• Excludes Commercial Bay

Transport

Building Auckland: A presentation to Auckland BIDs

• $28 billion ATAP

• RFT – imperfect but it’s a start

FULSS

Building Auckland: A presentation to Auckland BIDs

• $21 billion over 30 years (not fully funded)

• Plus schools, hospitals and other central govt services worth billions

Hmmm, we might want to stage some of these costs

Structure Plans –Drury and Pukekohe

Building Auckland: A presentation to Auckland BIDs

Drury

Where are these people going to work?

$2+ billion funding gap

Structure Plans

Building Auckland: A presentation to Auckland BIDs

What about brownfields?

Building Auckland: A presentation to Auckland BIDs

Dwellings consented, brown v greenfield, 12-month rolling average

Source: Chief Economist Unit, Auckland Council; Statistics New Zealand

• Latent capacity

• How long is a piece of string?

How are we going to skill this?

Building Auckland: A presentation to Auckland BIDs

Any questions?

Building Auckland: A presentation to Auckland BIDs