Housing affordability

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The Government asked the Commission to evaluate the factors influencing the affordability of housing (both rental and owner-occupied housing) and examine potential opportunities to increase housing affordability.

Specifically the Government asked the Commission to:

  • identify and analyse all components of the cost and price of housing;
  • identify mechanisms to improve the affordability of housing, with respect to both the demand and supply of housing and associated infrastructure; and
  • identify any significant impediments to home ownership, and assess the feasibility and implications of reducing or removing such impediments.

These tasks can be synthesised into three questions:

  • What are the key (demand and supply) components of housing affordability?
  • How can the housing market work better to improve housing affordability?
  • What can be done to remove impediments to home ownership?

In particular, the Government asked the Commission to give particular attention to:

  • factors influencing the supply of land and basic infrastructure for residential construction;
  • factors influencing the cost of residential construction, including the effect of standards, specifications, approval and title requirements on the cost of new housing construction;
  • the level and growth of productivity in the land development and residential construction industries, and the effect of government regulations on productivity in these industries;
  • the efficiency of taxes, levies and charges imposed at all stages of the housing supply chain;
  • the efficiency of the tax treatment of owner-occupied and rental housing;
  • the influence of changing consumer housing preferences, willingness to pay, and financing costs on housing affordability; and
  • the operation of the overall housing market, with specific reference to the availability of a range of public and private housing types, the demand for housing, and the efficiency of use of the existing residential housing stock.

Inquiry process

The inquiry involved a series of milestones including multiple opportunities for public input. Terms of reference were provided by the Government. An issues paper was completed, identifying issues that needed to be considered during the inquiry in greater detail. Members of the public and other interested parties had an opportunity to make formal submissions commenting on the issues paper and these were incorporated into a draft report along with analysis completed and commissioned by the Productivity Commission. There was another round of community engagement before completion of the final report.

Key dates

Submissions closed: 3 August 2011
Draft report released: 16 December 2011
Submissions on draft report closed: 10 February 2012
Final report to Government: 16 March 2012

View submissions

Submissions on each stage of the inquiry can be viewed here.

Contact information

For more information about the inquiry into housing affordability please contact:

Administrative matters

T: (04) 903 5150    (04) 903 5150
E: inquiries@productivity.govt.nz

Other matters: Steven Bailey, Inquiry Director

T: (04) 903 5156    (04) 903 5156
E: steven.bailey@productivity.govt.nz

Inquiry email address

E: housinginquiry@productivity.govt.nz

Postal address for submissions

Inquiry into Housing Affordability New Zealand Productivity Commission
Level 15, Fujitsu Tower 141 The Terrace
PO Box 8036 WELLINGTON 6143

Commission website

www.productivity.govt.nz