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Commission calls for cheaper houses

08:56 AEST Sun Jul 15 2012
AAP
Moe cheaper housing needs to be built to cope with demand, says the Productivity Commission (Getty)
Moe cheaper housing needs to be built to cope with demand, says the Productivity Commission (Getty)

The Productivity Commission is calling for lower-cost housing to relieve pressure on the property market in Auckland.

The commission released a report on housing affordability in April and its chairman Murray Sherwin told TVNZ's Q+A programme on Sunday that the houses being built in New Zealand were too expensive.

Only five companies in New Zealand build more than 100 houses a year, while 4600 companies build one house a year.

There were no economies of scale from large developments that could deliver lower-cost housing.

The commission, which was set up in 2011 to conduct research on productivity, has already called for an immediate release of new land for residential development in high-demand areas such as Auckland and Christchurch.

Mr Sherwin said he was hopeful of a "substantive response" from the government to the commission's report on housing affordability because the status quo could not continue.

"I think what we need in New Zealand now is a supply response. We need houses to be constructed to meet demand."

Councils needed to sit down with developers to come up with projects that provided lower-cost housing, he said.

Auckland had a shortage of 10,000 to 15,000 houses and new building was not at a fast enough rate for population growth.

"The cost of houses is too high. We can build them cheaper. We should be building them cheaper," Mr Sherwin said.