Public housing waitlist spikes, over 25,000 households waiting

The number of Kiwis on the waitlist for public housing is again on the rise as an economist says the new Government needs to urgently address the shortage of state homes and affordable rentals.

Newly released data shows over 25,000 households on the list in October, up 2000 as compared to the beginning of the year. A similar uptick could be seen in the rate of new applicants who joined the waitlist over the past several months.

The recorded median "time to house" also rose to nearly 300 days in the three months from July to September — meaning half of applicants waited for an even longer period.

It comes amid surging rents and a new government that has promised to "fix the housing crisis". It said this week it would make changes to social housing policy within its first 100 days.

In August, the Social Development Ministry (MSD) suggested an increase in applications was driven by a "range of factors," including renters affected by Cyclone Gabrielle, boarding house closures, and "proactive engagement" which led to more referrals.

Infometrics chief forecaster Gareth Kiernan said the rising figures were a reminder that New Zealand continues to face a massive shortage of public housing.

"Notwithstanding the bit of a dip that was in 2022, the number of people on the waiting list is still massively above historical norms," he said.

"It does speak to the fact that the housing crisis hasn't really gone away in the last couple of years — when our attention might have turned to other things.

"If it's starting to worsen again, then that is really problematic."

The public housing waitlist shot up dramatically under the last government, peaking at over 27,000 two years ago, while subsiding slightly towards the end of 2022.

Former housing ministers suggested the massive growth in the figures was because pre-2017 data "did not reflect the real need" for homes.

Last year's reduction in the overall total was also reflected in the rate of new people joining the register each month, however to a substantially lessened degree.

The dip coincided with process changes at the ministry to help remove people from the list more quickly when they found housing, which officials said resulted in the "completion of one year's worth of housing register conversations in 12 weeks".

Kiernan said upward pressure on house prices between 2015 and 2022 helped lead to rapid growth on the housing waitlist.

"We had quite strong house price inflation feeding through into housing becoming more and more unaffordable for people," he said.

"My concern is that with house prices starting to push up again, and upward pressure starting to show through in rents — particularly in places like Auckland with strong migration — you could start to see a bit more of another wave of that occurring if the supply of housing more generally is not able to keep up."

Rental growth across the country has been running at "historically high levels", according to CoreLogic, growing at roughly double the long-term average in the year to October.

Last week, CoreLogic chief property economist Kelvin Davidson said that the supply of rentals had been dampened by a quiet patch in house-buying activity by investors.

"It’ll be intriguing to see how they perform in the coming months after a change of government and 'property friendly' policies," he said.

CoreLogic suggested the surge in rent growth this year has been driven by wage growth and "tightening supply and demand" — "driven in particular by soaring net migration".

"On the alternative MBIE measure, Wellington and Dunedin have been slower to grow in terms of rents, but Christchurch, Hamilton, Tauranga, and Auckland have accelerated."

Throughout its time in opposition, National repeatedly pointed to soaring waitlists under Labour as a "disaster," but now its ministers will be tasked with fixing it.

During the campaign, the party promised a range of solutions aimed at reducing the wait for a home — including a major shake-up of Kāinga Ora.

Yesterday, Prime Minister Christopher Luxon announced two changes to social housing policy would be part of "49 actions" in his coalition government's 100-day plan.

The first involves commissioning an independent review of "Kāinga Ora’s financial situation, procurement, and asset management" after National expressed "serious concerns about the management and governance" of the agency while in opposition.

The second would mean changes to prioritisation for people needing a social home.

The Government wants to create a new category on the housing waitlist for "Priority One" applicants, who have been living in emergency housing for more than three months. These families would then be moved to the front of the waitlist.

During the election campaign, National also signalled a shift towards community housing providers, which it suggested could do a better job than "monolithic" Kāinga Ora.

It came after the outgoing Labour government vastly scaled up building efforts, with over 8000 new public homes delivered.

Speaking to 1News, Kiernan said continuing the pace of building more social homes was imperative for the new Government.

"Labour, obviously, talked a lot about that in terms of various policy announcements over the last few years," he said.

"It was a positive thing. It was moving in the right direction, but in a sense, the numbers seemed to be a little bit of a drop in the ocean, given how much the size of the waitlist had increased. It's imperative that this is still an area that National focuses on."