"Equilibrium" returns as new builds reshape housing market
Auckland is no longer one of the world’s least affordable housing markets, thanks to a sustained construction boom, a shift in housing types, and policy changes enabling more supply.
The city ranked 16th in Demographia’s 2025 affordability index, as reported by RNZ, down from its former place among the top 10 most unaffordable global cities. With a house price-to-income ratio of 7.7, Auckland is now more affordable than Sydney, Melbourne, Brisbane – and far behind Hong Kong’s staggering 14.4.
Townhouses, density, and supply ease pressure
Much of Auckland’s improvement stems from its post-Unitary Plan construction surge, said University of Auckland associate professor, Ryan Greenaway-McGrevy (pictured left).
“We’ve been building a hell of a lot of houses in Auckland, mainly since passing the Unitary Plan. That’s allowed the supply of housing to catch up with population growth because for a long time we haven’t really built enough houses relative to population,” Greenaway-McGrevy said.
The latest REINZ figures reinforce that trend. Auckland’s median house price fell 3.4% year-on-year in June to $990,000, continuing to weigh on the national median, which held flat at $770,000. Sales across Auckland lifted 17.9% annually, but the city also saw one of the sharpest increases in days to sell – rising to 50.
Since 2016, Auckland has issued consents for around 127,000 new homes – boosting its dwelling stock by nearly 25% on the 2016 base of 500,000.
The type of stock being built has also shifted. “They require less land and they’re smaller so that’s going to be reflected in median prices, Greenaway-McGrevy said. “So, you’ve got this compositional shift that the median price is picking up.”
The housing supply increase has helped lower real rents in Auckland, he said, diverging from national trends and reinforcing the affordability gains.
Demand factors and planning reforms support shift
Weak economic conditions and high interest rates have also limited demand, adding to the downward pressure on prices.
“A lot more supply and factors limiting demand should all add up to pressure on house prices,” Greenaway-McGrevy said.
“We’ve got a set of policy settings where the housing market on the supply side should be more responsive to demand… hopefully we’ll see fewer constraints on housing supply as Auckland continues to grow in the future.”
Infometrics chief forecaster Gareth Kiernan (pictured center) agreed. “There are more smaller, and therefore cheaper, housing options available than 10 years ago,” he said.
Kiernan added that sustained building activity and minimal net migration could continue to reduce Auckland’s housing shortfall.
However, he cautioned against overstating the shift.
“Let’s be clear though: Auckland might not still be in the top 10, but it’s nowhere near affordable… house-price-to-income ratios are still worse than at any time prior to 2016,” Kiernan said.
Corelogic: Stronger first-home buyer activity signals balance
Corelogic chief economist Kelvin Davidson (pictured right) noted the city was no longer gripped by a shortage narrative.
“The word shortage is just not talked about anymore. There seems to be a bit of an equilibrium going on at the moment,” Davidson told RNZ.
While affordability remains a challenge, he said many are still managing to enter the market.
“It’s still pretty expensive, but there will be people that still access the market, and I think we can see it with the first-time buyer numbers at the moment. They’re really, really strong,” Davidson said.
“If you have saved for a bit, and you can satisfy the bank, you’re going to be able to find a decent property at a price you can afford and you know money is available.”
He backed recent government efforts to move away from housing as an economic driver, referencing recent remarks by Housing Minister Chris Bishop: “We don’t get richer as a country by buying and selling each other’s houses.”
Affordability benchmark out of date, say economists
Demographia defines a house-price-to-income ratio of 3.0 as “affordable”, but both Greenaway-McGrevy and Davidson said that target is unrealistic for Auckland.
“As much as I would love to tell you that that would be attainable and feasible, that seems a heroical aspirational goal,” Greenaway-McGrevy said. “But if we thought about a multiple of five or six, if we could attain that, that would be great.”
Davidson agreed the benchmark was obsolete: “It might have been the benchmark at some point but your benchmark has got to change sometimes to reflect reality. A multiple of three is just incredibly unlikely ever again.”
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