The other week, BNZ economist Tony Alexander made an interesting point about Auckland’s current urban growth (via Interest.co.nz):

The plan set out in Auckland’s proposed Unitary Plan to build 422,000 houses will require a rate of building over 25 years that it previously took 161 years to achieve in the City of Sails, BNZ chief economist Tony Alexander says.

In his Weekly Overview report Alexander notes the Unitary Plan’s aim for 422,000 extra houses to be built over the next 25 years requires an annual construction rate 2.5 times higher than the average achieved over the past 25 years. Canterbury achieved 1.5 times post-earthquake.

“Look at this another way. As at the 2013 census there were 509,000 dwellings in Auckland. In 2001 there were about 420,000. The plan is another 422,000 in the next 25 years, in other words doing in 25 years what it took 161 years to do following the designation of Auckland as the country’s capital by the first Governor William Hobson in 1840,” Alexander says.

Now, it’s worth putting some caveats on this. The Unitary Plan allows around 422,000 new ‘commercially feasible’ homes to be built in Auckland – but it doesn’t guarantee that they will be built. Other factors, such as the availability of construction labour or funding for infrastructure, could still pose road-blocks. On the other hand, Auckland’s population might not grow fast enough to need another 422,000 homes, eg if the New Zealand economy declines for a prolonged period.

But Alexander’s comments nonetheless put matters in perspective. Auckland is currently experiencing historic levels of population growth. The city has never been faced with the task of accommodating as many people, in as short a time-frame, as it must at the moment.

[As an aside, I’ve covered the reasons why this is happening in a previous post.To summarise:

  • The majority of recent and future population growth – about 60-65% – is from natural increase, i.e. people being born in Auckland
  • Net migration, principally from overseas, accounts for the rest. Net migration is very volatile – high inflows in one year can be balanced out by outflows in the next.

For the record, commenters complaining about population growth or the origin of migrants without engaging with these facts or providing references for their own views will be deleted.]

Migration Herald

How unprecedented is Auckland’s current and projected population growth, anyway?

Historical data on urban populations provides a window into this question. Here’s one of the key graphs from a 2013 paper by Arthur Grimes and Nicholas Tarrant, showing the growth of New Zealand’s largest five cities in 1926.

Grimes and Tarrant urban population growth

At the start of the 20th century, Auckland wasn’t that dissimilar to Christchurch, Wellington, and Dunedin – a bit bigger, but not by much. But over the course of the century, it diverged, and, what’s more, the rate of divergence seems to have increased. In 1926, Auckland was only 60% larger than Wellington, the second-largest urban area. In 2006, it was 235% larger:

Auckland to Wellington population 1026-2006

It’s common to measure urban population growth in percentage terms. That’s not a bad measure, in a lot of ways, as it captures the degree to which cities of different sizes are experiencing relative changes. Adding 500 people to a town of 10,000 may feel as transformative as adding 50,000 to a city of one million.

But when you’ve actually got to build stuff to meet demand – homes, roads, pipes, busways, etc – the raw numbers matter a lot. When Auckland grows by 1%, it has a much greater impact on the national construction task than 1% growth in Timaru.

So with that in mind, here’s a graph showing the last 115 years of urban population growth in Auckland, plus the projections for the next 30 years or so. I’ve pieced it together from a couple of sources – Grimes and Tarrant’s numbers, including their unreported population figures for 1901, Stats NZ’s population estimates for 2006-2015, and Stats NZ’s population projections for 2013-2043. (These figures don’t line up perfectly, but they’re still broadly comparable.)

Here’s what we’re looking at. Between 1996 and 2015, Auckland added over 20,000 new residents a year – the fastest-ever increase. The only period that comes close is the late 1960s/early 1970s, and that turned around pretty quickly.

The range on future population projections is wide. At the low end, Auckland would “only” add around half a million people over the next three decades. At the high end, it would add another million people. However, the mid-point of the range, which is reasonably reliable over multi-decade periods, would see the growth trends of the last 20 years continue.

Auckland historical and projected population growth

Now, this could potentially be a very good thing. The last 20 years of urban development has been, on the whole, positive for the city. It’s injected new life back into the city centre, created demand for a wider range of housing and transport choices, and given Auckland – for possibly the first time ever – great dining options. None of that would have been possible in the absence of population growth.

But growth also creates challenges. The city’s post-war growth model – low-density zoning and car-centric development on the fringe – no longer works. While there are still greenfield sites that can be subdivided, they’re located in less desirable places – Dairy Flat and Drury aren’t comparable to Browns Bay or St Heliers. And fringe locations built around the car are becoming increasingly expensive to connect in to the rest of the city, due to the need to expand road capacity across pinch-points. All the cheap motorways have already been built:

Cost per added lane-km chart

In other words, the city will have to change to accommodate growth. That means changing the way we regulate and build the housing market – the Unitary Plan has made a useful contribution. It also means rethinking the way that we invest in and manage our transport system. If the cost to develop transport corridors is going up, then we need to make sure that we get the best use out of them.

This means looking more closely at how congestion pricing can balance demands between time periods. It means choosing to dedicate more corridor space to high-capacity modes like rapid transit, and, in reasonably dense areas, cycling.

Packed Train

In addition to better enabling Auckland’s future urban development, there are a range of other benefits to this approach. People who have better options to get out of the car tend to be more physically active and healthy. Town centres where more people walk, ride, or bus up are often more vibrant and economically successful than those where people must navigate a maze of carparks. And, in generally, more connected places with better street life tend to be more enjoyable for everyone.

Here’s hoping the next phase of Auckland’s growth takes us in that direction.

Share this

68 comments

      1. Given that you guys keep saying “Instructions” or “directions” It might help if you actually labelled it as such IN THE POST, or at least HIGHLIGHTED it.

        “For the record, commenters complaining about population growth or the origin of migrants without engaging with these facts or providing references for their own views will be deleted.]”

        I missed it the first time
        I missed it the second time while looking for it
        I missed it by looking for “instructions”
        I missed it by looking for “directions”

        1. That is an extremely clear statement. The people who didn’t read it are the ones who always jump in with anti-immigration comments whenever urban growth is discussed.

          1. Oh, it’s clear enough when you see it, it’s just not easily VISIBLE.

            What you’ve got there is a piece of sub text atop an image, appended to the end of an aside about something altogether unrelated to “please do the following”.

            Almost like you wanted people to miss it.

        2. I objected to it more because it was incorrect and contradicted the data presented in the post itself, not because he had broken any rules.

          1. Which is fine, but since it’s deleted, I cannot judge in fact whether it was incorrect, or ONLY contradicted the data in the post.
            Which is censorship.

            For failing to follow a rule in the post, which was so unobtrusive that I failed to find it 4 times while actively seeking it.

            That does rather smack of a bias, conscious or otherwise.

            Especially when “hey it was really hard to find that rule” was responded to with nothing more than a sweeping generalisation based on stereotype.

  1. That graph showing increasing per-km costs for highways is really interesting. Seems like we’re in an age of diminishing returns to scale from urban highways? Shame our road-addicted government doesn’t see it this way.

    Yes, 60% of Auckland’s growth is from natural increase. The other thing to mention is that net arrivals is partly driven by returning NZers. So most effective way to bring property prices down is to 1) build more houses and 2) change tax treatments of property. Maybe a control on foreign capital inflows, although that could equally stymie development (e.g. Australian apartment developers).

    1. It’s even more interesting if you separate the widening projects from the entirely new motorways. Then it is clear that we’ll never build an affordable new motorway again.

    2. Yes – when I put that chart together I had a bit of an “oh bugger” moment. Roads and cars are pretty convenient, and perhaps it would be nice to have more of them as a city. But when you look more closely at the cost side you realise that we face fundamental technological (not political!) barriers to providing lots more road space.

      The good news is, even if corridors are more expensive, we’ve got choices about how efficiently to use corridor space. Rapid transit, cycling, etc. Going to be necessary if people are to continue to FLOW through the city.

      1. Yeah well, I wish we used some of these huge streets in the CBD for PT.

        After living in the city for 1½ year I haven’t changed my opinion on PT: for most practical purposes (other than commuting to downtown), Auckland has no public transport at all. Given half an hour, I wouldn’t even make it to Grafton on PT! Living in those apartments is OK if you’re young and fit, but if you’re for some reason unable to walk for more than a kilometre you’re not going anywhere without a car.

        Of course there are two cross-town routes nearby, the green and yellow link bus. So what happens if you take the link bus from the Sky tower to Newmarket? The bus drives to Queen Street, and then waits for over 10 minutes. Turns out that bus wasn’t 3 minutes late, but 12 minutes early. Oops. On the other hand, contrary to popular belief, driving in Newmarket is quite convenient, and finding parking is usually OK as well. So when I go to Newmarket I find myself driving there. And it’s not that I like driving a car around in the middle of a city.

        That’s the problem with laying out PT in a star topology. Centred around Symonds Street and Britomart in this case. If you’re even a short distance away from the hub, it becomes very slow to get to most places.

        And then I’m not surprised at what happened in Westgate. Either you build a very big parking lot around your shops, or nobody is able to reach your shops, and there’s this thing called “Albany” on the other end of SH18 which is going to make you quite miserable most of the time.

        [ By the way, while we have known the outcome of that consultation in the central suburbs for a while, has anyone seen any plan for what will happen in the CBD during the couple of years before the CRL is finished? ]

    1. it’s not obvious that it’s more expensive overall if more people settle in Auckland. Yes some forms of infrastructure (e.g. roads) are more expensive, but other forms of infrastructure (emergency services, education,. universities etc) may be cheaper due to economies of density.

      Wages are also higher in Auckland, so these people will contribute more in the way of income taxes.

      Basically, you can’t conclude Auckland’s growth is a net fiscal loss.

  2. Auckland’s awkward geography means that if the city is to work well at 2.5 million people we either need a lot more jobs in regional centres like Manukau or Westgate, or we need to grow the isthmus way more than greenfield areas. Otherwise the burden on just a few connections will be impossible.

    1. Nearly 70% of Auckland jobs are not in the CBD already but the CBD remains the single largest area for jobs. As you can see Brian there are already plenty of jobs spread over Auckland it is just that PT concentrates on the 30% in the CBD and how to get people there without worrying to much about the other 70%, that is why people keep using their cars.

      1. I don’t think your comment holds true anymore. AT have just completed a massive redesign of the public transport network based on frequent connector routes to local and metropolitan centers, combined with a grid model that lets you travel easily between suburban areas. For example except for the train and the northwestern routes, every bus line in west Auckland runs to Henderson or new Lynn. Clearly getting to jobs in those centers by PT will be just as easy, and probably faster, than going to the CBD.

        1. Nick I believe it still is, it is not as bad as say ten years ago and it is improving but the 30% are still the largest single group so get the bulk of the attention.

          It is in response to the ‘move jobs out of the CBD’ type comment that often gets posted on here and other places, 70% of the jobs are already outside the CBD.

          1. Yes Patrick it will be a good balance when we get it, personally I would like to see more rail but it is a good start.

          2. Hmm where did that map come from?

            Something I noticed during the consultation for the North Shore is the lack of a frequent link between Glenfield and Constellation station. It’s an obvious omission if you think about how to reach Albany and the upper part of the east coast bays from the kaipatiki area. It’s funny to see that link show up anyway on that map.

          3. Well AT are building a new rail line! Which will be transformational, but does take $2.5 b and seven years, so getting those buses to work is surely the first best thing. And lo, they are doing it.

            And they and others, ahem, are working really hard to get other rail systems added to this.

    1. Yes it is an exciting opportunity.

      But not one being taken at Westgate; what a complete disaster; and orgy of backwardness, an absurd auto-dependent big box retail drive’n’buy fuck-up. It looks like they are planning on the Manukau model; 40 years of doing the wrong thing in the wrong place, then finally trying to retrofit the right things. At least MC is at last doing it better, though off a poor base.

  3. Excellent post but begs the question of how to moderate growth. I advocate a national population strategy to share growth more evenly throughout NZ. 2.5% growth for an extended period is one hell of a challenge – 1.5% would be much more desireable. Meantime there are towns and regions which are stagnating or even going backwards. The so-called “zombie towns” are very real, as I have personally discussed with the desparing mayors of a number of them. I fully realize how difficult it will be to incentivize more business activity (jobs) in the provinces but this is the only realistic way to persuade more people, especially the young, to remain in or relocate to the smaller centres. I have been attacked on this blog for previously suggesting such policies but remain firmly of the view that this would be a win-win for all concerned – Auckland would be better able to address growth if there were just a bit less of it while the rest of New Zealand would actually have some growth. Even if the targets of such a policy were not met, every extra thousand people who we persuade to chose to live in a provincial city or one of the other metros is a thousand less people we have to accomodate here.

    1. Real tricky Graeme. I understand the impulse, but think it’s way harder than it looks.

      We have a long history of this, and it isn’t pretty. Kawarau, TV studios in the Hutt, all sorts of examples. The thing is real economic performance and growth is hard to get, and if your plan involves squashing it from where it wants to be, even passively, like failing to invest well in AKL now, then it has a habit of disappearing like spit on a griddle, rather than moving to, say, Maungataroto…

      An economy is a like a living creature, and a wild one at that, it’s more about riding the beast than ordering it about. People sneer at command economies with good reason; they tend to not work, especially in the long run.

      Also I just reject this idea, very popular among people with a fear of change, that more people are some kind of disaster for a city:

      ‘…every extra thousand people who we persuade to chose to live in a provincial city or one of the other metros is a thousand less people we have to accomodate here.’

      Why not here?, let’s leave the countryside alone, rather than force reluctant people out of efficient cities to sit idly there.

    2. With all due respect, Graeme: Unless you have *concrete* policy proposals about how to encourage people to move elsewhere, “raising the question” adds nothing to the debate. It only distracts from discussion of policies that might work, such as rezoning proposals, state house construction, speeding consenting, investment in rapid transit or new transport infrastructure, etc.

    3. This is where the market is supposed to help. Those towns that have jobs should in theory have a labour shortage that leads to a rise in wages that in turn attracts in people from the other towns. But our government is dead set against that. Instead as soon as an employer comes up against a labour shortage (at the minimum wage) they demand access to the world labour pool. If we truly had a market economy then the wage rate for picking fruit or pruning grapevines would increase above $15 per hour and there would be an incentive for those without work to shift to those jobs.

      1. That’s a bit of a partial-equilibrium analysis, though. If the businesses hiring are in tradeable sectors, like agriculture, then trying to drive up wages by restricting labour supply will have one of two effects:
        1. It will make them uncompetitive and drive them out of business
        2. It will encourage them to invest in labour-saving machinery.

        In either case the net effect on local employment and wages levels isn’t easy to predict. It might be positive, but it could easily be negative.

        If the businesses hiring are in non-tradeable sectors, like healthcare, then restrictions on labour supply will *also* push up local price levels. Again, higher local prices will tend to offset the gains from higher local wages.

        1. If you are in a business that only works through exploiting poor people then let them fail. If a farmer or a manufacturer can’t get someone to work for them at $15 per hour then as a society we should be saying “put up your wages you miserable prick”! I shocks me how the right wing argues for market forces when it suits them and then wants government intervention as soon as it doesn’t. The radio news today is full of wine growers complaining they can’t get New Zealanders to work. but of course they think they should still be able to pay the minimum wage. Our choice is to either chase the third world to the bottom or figure out how to be a productive economy. If people mechanise they will still need someone to run the machine and that person gets a higher wage. The people who run the robots at a car factory make more than the dudes who used to weld the bits together.
          As an aside I have never bought into the right wing criticism of minimum wages they taught in stage 1. In my view they always fail as they end up as a form of price fixing in a labour market made up of many workers and few employers. Not quite monopsony but almost. I am not sure if oligopsony is a word but you know what I mean.

          1. I think you raise some very valid arguments there. One thing I would say though is as a relatively wealthy country we should be thinking not only about ourselves but also our poorer Pacific neighbours. I think there is real benefit from bringing in seasonal workers from the Pacific Islands, not only for our growers and industries, but also the money that gets taken back to the Islands.

          2. Just to be clear, I don’t think that migrant labourers should be paid less than minimum wage in NZ. That would be an obviously distortionary move. But it’s more of an enforcement issue for labour market regulators.

    4. What are your thoughts on how we would achieve this? The reality is for thousands of years around the world settlements have come and gone, you would be pissing into the wind trying to stop that. Should we have tried to save mining towns like Macetown in the Central Otago goldfields or Denniston in the Buller coalfields. These places disappeared or declined for good reason, there was little or no reason to live there or maintain expensive access infrastructure once the ways of making money dried up. In reality NZ doesn’t have closed borders, encouraging people to leave Auckland to smaller locations could just as easily result in them heading to Sydney, Melbourne or London.

    5. I agree with the other comments that trying to move jobs and people to out of the way places is fraught. However making more of Hamilton might be a good long term strategy. It has a university, could be about an hour away from Auckland with a moderately fast train, and has excellent connections to Asia and the U.S. via Auckland airport. The question is whether people will follow improved transport links?

      Once again this is something that would have to be led by successive central governments over decades, so improving transport, increasing density etc within Auckland has to be the way forward in the near future.

  4. For repeated violations of the user guidelines and an inability to read the directions in this post, you have just earned yourself a one-month ban from Transportblog.

    1. Yeah, this is a transport blog though.

      I have massive question marks on the current level of net migration. But saying “shut down population growth” is in the completely wrong forum here. This is about finding practical solutions for projected outcomes. Auckland Transport or NZTA are NOT responsible for immigration or “one child policies”. If you want to sort that out, go and lobby on one of the various political blogs out there, or to your preferred political party.

  5. Patrick – very similar comments to last time. You will notice that I used words like persuade and choice. Life is not simply about economic efficiency. Having been part of the political life of Auckland (albeit a tiny cog in a very big machine) for decades it fascinates me that we are constantly running very hard to remain pretty much where we are – in other words almost always behind the planning curve and rarely ahead of it. My point is that I would like to see more quality decision making rather than constantly being in reactive mode because of the pace of change – and that is surely easier to manage when that pace is more moderate rather than over-heated. Yes, more population gives us access to more resources (more rates paid, more talent to draw on) but it is usually just a zero sum game because the competing needs for those extra resources have also grown. I do not fear the extra 1,000 people (or even a million in the long run) but if they arrived more slowly we would have more time to make wise choices about the many decisions (so many options on so many fronts) that face us. I have never suggested zero growth but would much prefer it to be at a manageable rate.

      1. That the Auckland gentry pay a bit of extra tax to ensure that they won’t have to rub shoulders with as many hoi polloi – pack them off to the provinces, out of sight/out of mind.

    1. As already stated, developing the provinces and constraining big city growth are extremely difficult to do effectively. These policies usually just amount to wishful thinking and ignoring the problems as they mount. These policies are popular among those who already have their place in the city secured: older and wealthier home owners. Whether this is conscious or not older homeowners do not wear the cost of ignoring the problems while hiding behind ineffective regional development policies. For example Mike Lee, among many others, has consistently opposed allowing more housing to be built. When pressed on the issue he always says something like “we need to talk about growth blah blah”. Well you can’t just wish the problem away and it will be the non homeowners, the young, and the poor who will wear the costs of this willful denial.

      1. It is inexcusable for local politicians to avoid making necessary decisions on the basis of wishing away the issues they are changed with responding to.

        This is endemic in a certain generation, my generation and older, and it’s self-delusional and, I repeat, inexcusable and irresponsible.

  6. I will try my best to engage with the facts and I hope to do so without any reference to ethnicity, skin colour or faith. The natural increase in population due to people who are already here is something that will occur independent of any policy. The net migration number is as you say volatile but is made up of a combination of things. First the outflow is exogenous. It will be what ever it will be due to factors occurring in the rest of the world. That leaves the inflow. Part of that is people returning, again nobody can do anything about what that number will be. So all a policy can ever do is focus on the inflow component of people who are not from here. That isn’t racism on my part if I include in that group the people who look just like me. I can’t see any problem at all limiting that component that we can control to either get a population balance or to limit growth to the same level we can actually build homes for people. We can have a migration policy that isn’t based on xenophobia but seeks to make sure we have sufficient homes and tries to make sure our unemployed people are able to get work at a wage commensurate with the job.

      1. All those organisations basically have to plan for level of migration that is unknown. That makes it extremely difficult. So I think it has quite a lot to do with the way that we manage our transportation. They don’t control those things but there needs to be planning well in advance (since it takes so long to make things happen in this country) so that we can move people around the city and the country.

    1. Inflow is also largely exogenous, as like outflow, is a function of Aucklands *relative* attractiveness compared to wherever these people are coming from or going to.

      So what Auckland Council and its friends could do, (if they wanted) was try really hard to make Auckland really really shit in the measures that makes Auckland attractive, so relative to (say) the provinces it was now less attractive. This is clearly a non-starter as a policy (eg where are the mayoral candidates standing on a platform of making Auckland worse?!!!)

      All local governments are doing their best (competing) to make their areas as good as they can be, but the reality is Auckland is just *too* attractive on most (but not all) counts for the minor advantages of the provinces (mainly for people who like a slower pace of life) to outweigh the advantages of Auckland (big city, big opportunities). This reality is reflected in the numbers.

      1. Making AKL ‘really shit’ or really expensive, is pretty much all that can be done at City level, and by God we have tried it. It certainly worked in the 70s, although government really did the heavy lifting then too- the whole country was undifferentiatedly dull.

        It is my view that the gradual ‘de-shitting’ of Auckland this century, helped by a less racist immigration policy, from late last century, and stuttering attempts at proper city making, has now embedded in a structural attractiveness to Auckland city life, which added to natural attractiveness, is likely more or less secular.

        Thus the push factors for locals leaving or newcomers going elsewhere have reduced down to one thing; unaffordability.

          1. Probably quite a lot more given the record levels of net inflows, to offset Auckland relative attractiveness

        1. “Thus the push factors for locals leaving or newcomers going elsewhere have reduced down to one thing; unaffordability.”

          And right now Auckland is losing an entire generation due to unaffordability. Nearly every person I know from the age of 25 to 40, that hasn’t been given a house by wealthy parents, is planning to leave the city permanently. Many of these are highly skilled people that will will take lower skilled jobs elsewhere, and who will move their children away from their own parents. I think many in the anti growth / “regional development” crowd will see this as an acceptable outcome but it comes at a very high cost to those who are forced to move and to the economic future of Auckland.

          With the passing of the Unitary Plan, and general acceptance of the severity of the housing crisis moves are starting to be made to address the problem. But the problem has been left for so long that it will now take many years to unwind and much of the damage done will not be reversed.

          1. Those greedy millenials robbing their parents of the opportunity to see their grandchildren by moving, it’s like the expect to be able to own a house with their ‘university degrees’ and ‘one car households’. /sarc

          2. “Nearly every person I know from the age of 25 to 40, that hasn’t been given a house by wealthy parents, is planning to leave the city permanently” – That may be but I can assure you that they are being replaced by an even larger number of young people moving here from other parts of NZ.

            There is just so much more opportunity in Auckland that it must be hard to justify not moving to Auckland after University unless you are involved in a rural based industry.

          3. I suspect that Auckland’s growth may not be as great as projected over 30 years. A big factor in migrant gains has historically been the relative affordability of Auckland’s housing by international standards. That does not apply anymore. Sure there are plenty of other pulls but even some of those are being denigrated (eg. Safety, relative absence of extremes in inequality etc). Thanks to the current govt we are fast losing many of our great kiwi strengths.

          4. Yes, well in that sense the Nick Smith line, wait, it’ll correct, is sort of true. But how much waiting can people reasonable do? That’s all good for those of us already well housed, but tough on the rest.

            Also you could add the current rebound of the Aussie economy is also relevant to our net migration levels… push and pull, eh?

            Though I have some contradictory thoughts on this. On the one hand NZ is like a little village at the edge of empire and therefore it is structurally natural for young people and especially talent to head off to bigger ponds to swim in. That isn’t going to change. But, on the other, I think NZ, and particularly the cities, AKL, WGTN, CHCH(?) have grown in sophistication considerably, culturally and in terms of employment in some fields that that may no longer be necessary quite as much as it was? And because almost all the dynamic cities of the world are facing the same unaffordability crisis [for the same reasons] its a lot harder now to move to them from here. And if it isn’t the opportunities of the big smoke that you’re after, then NZ still offers plenty of ‘lifestyle’ quality reasons to stay….?

            The question being; outside of the usual volatility of net migration volumes are there major structural; changes that may profoundly shift the underlying pattern?

    2. I think the key point here is the distinction between long-run *levels* of population growth and *volatility* in net migration from year to year. The former is a challenge but not a problem, as long as we prepare ourselves to deal with it. The latter is a non-trivial problem to solve, but I think it’s solvable if we diagnose the issue right.

      A few random thoughts:
      * Volatility in population growth leads to volatility in demand for residential construction, which may in turn reduce firms’ willingness to invest in capability
      * There are a number of frictions that prevent building from ramping up really quickly in response to new demand – land acquisition and consenting play a role, but there are also factors like design, financing/pre-sales, earthworks, etc to consider
      * Central government could play an important “counter-cyclical” role in residential construction – ie committing to ramping up state housing construction during periods of net population outflows.

    3. While I think you raise some strong arguments about immigration flows, I hope if they are changed it is a strategic decision, not a knee-jerk reaction to a single issue (housing), which has many factors influencing it, or to what may well be a short term blip in net migration. Knowing how governments usually approach issues, I’m not holding my breath that it will be a strategic decision!

      1. I think the lack of regulation of offshore investment in housing is more of an issue – and more readily able to be regulated – than levels of immigration.

  7. If it’s the reality, as espoused by the older generation, that open, freer living with large sections is the optimum mode of living, then there will be a natural demographic shift out of Auckland by that part of society.

    This will offset the natural flow pressure from immigration. Auckland will be a young, vibrant city, and the old can enjoy the parts of NZ (which is still most of it) that remain closer to the old idyll. Sounds like a win-win.

    1. I don’t see that happening until the planning rules transform the urban environment with density and transit options that nudge the late adopters and laggards into considering options:
      – don’t like and move
      – decide it’s not that bad and stay
      – decide it’s what they really always wanted and advocate vociferously for more

      Until there is a change in local body election participation that moves the balance against what are collectively termed NIMBYs (who exist in various forms on a range of divergent issues), I doubt we’ll find out how the “they can always move” line of reasoning actually plays out.

  8. The simple answer is that we need to borrow to pay for the infrastructure, This can be done by the central government issuing a infrastructure bond. Right now the interest costs are so low it seems to be the most sensible thing to get the ball rolling. The Government can borrow at less than 2% over 10, 20 or even 100 years – the market wants these long term bonds.
    We could set up development companies that receives these funds and then develops the projects, housing, port, rail etc, then pays back the bond. Each project would need to be costed to be determined whether it is a commercial operation or a otherwise. For example moving the port would cost a lot but developing the former port would re-coup a lot of that expenditure. If it is otherwise then alternative forms of funding need to be explored to pay for it – like councils capturing the uplift in value when the CRL is built or through standard taxation.

  9. Globally population driven economic growth maybe coming to an end. The ‘normal’ of the last 300 years, the industrial revolution, is winding down. This can only be good for the planet, and offers new challenges and opportunities, but first of course it will challenge our conceptual habits… time for fresh and exciting new thinking and actions:

    http://gregor.us/coal/the-big-pivot-interest-rates-and-emissions-as-global-population-growth-hits-a-turning-point/

    1. Yes, it is a little known fact that global fertility rates are at about replacement level, even with sub-Saharan Africa still having fertility rates of around 4-5. This is mainly due to the amazing efforts to educate women. World literacy rates are in excess of 85%.

      We are pretty much at “peak baby”. Once the bulge of the baby boomers has passed, population growth may start plateauing or even reversing.

      Great video on this from a Swedish expert:

  10. Hi Peter, Could you please give me the source of the long term migration graph at the top of this article? The one starting with the gold rush.
    Kind regards, James

  11. Maybe we need to look backwards to see our way forwards. Back in the 1950s there was an explosion of what we would now call “think big” projects, where major industries were established in the countryside, complete with their surrounding dormitory towns – Kinleith with Tokoroa and Kawerau spring to mind. Helped by tax breaks such as export incentives, they were able to employ and house large numbers of employees in comfortable and cheap accommodation and pay wages that were way above the average to keep them there. I was one of those young couples who got my break at Tokoroa, and was able to pay off my house there to give me my deposit to live back in Auckland which was the ultimate aim- it was just as difficult to break into the Auckland housing market 30 or 40 years as it is today. Given the right tax breaks and government help it is probably feasible that the same thing could happen today with major employment being built in the dormant towns taking the pressure off Auckland and giving young people somewhere to start their lives.

Leave a Reply