Market and Population Growth

The New Zealand Population
At 31 January 2006 New Zealand's resident population is estimated at 4,123,409. The population and is growing at a steady rate of approximately 1.02 per cent a year (2005) through both natural increase and immigration.This population is expected to increase by 16 per cent by 2021 and to reach 5.05 million by 2051*, an increase of almost one million or 24 percent.60 percent of the population growth in 2003 was a result of new migration, with permanent and long-term arrivals exceeding departures by 42,500.

The Auckland Population
Auckland's population of 1.4 million is growing at a rate of 2.6 per cent each year through both domestic growth and immigration.  This equates to 30,000 new residents every year or 500 to 600 people per week.

The population of Auckland City is expected to reach 2 million by 2050.  Two-thirds of New Zealand's population growth between 2001 and 2026 is projected to be in the Auckland region.  The region will be home to 37 per cent of New Zealand's population in 2026, compared with 31 percent in 2001.

Based on the expected population growth, the Auckland City Council is aiming to increase the density of housing in the existing metropolitan area. Currently, the greater Auckland area has 25 per cent intensive (multi-unit) housing. The target in the medium term has been set to increase this to 45 per cent. To put this into perspective, Melbourne is currently at 25 per cent, with a target of 40 per cent - and Sydney is at 55 per cent (2001) and aiming for 65 per cent. This is good news for investors as a larger population and a shortage of land provides good prospects for rental and capital growth.      back to top

New Zealand Households
Based on changing demographics the average size of New Zealand households is expected to decrease from 2.6 people in 2001 to 2.4 people by 2021.

To accommodate the population growth and changing household demographic Statistics New Zealand project the number of households in New Zealand to reach 1.84 million by 2021.  This is an increase of 400,000 (28 percent) from an estimated 1.44 million households at 30 June 2001.  To achieve this number of households an additional 23,530 properties would need to be built each year.

Rental Demand
Rental demand in Auckland remains strong.

• An increase in international students in Auckland's inner city has had a flow on effect on other renters moving to the suburbs, increasing demand in these areas. 
  
• The recent increase in house prices has inspired many families to sell-up and rent in the suburbs. 
  
• Many younger people are finding that increasing property prices are making it difficult to purchase their own property, therefore leaving renting their only option.  The Centre for Housing Research in New Zealand, supported by Housing New Zealand forecasts that Auckland will require almost 10,000 extra rental properties each year for the next ten years, a rate far above the demand for the past ten years.     back to top

Market Growth
Auckland is home to many of New Zealand's major business enterprises and continues to attract more and more businesses every year. As an economic centre Auckland enjoys a high level of capital investment and employment.  The resulting growth attracts more industry, creating further demand for infrastructure, commercial and residential property.

A shrinking supply of land available for development in central regions of key New Zealand cities is also expected to drive demand and therefore property prices upwards. 

Based on historical statistics, property doubles every 9 to 12 years.   This means average growth of around 6 - 8 per cent per annum.  In 2004 property prices increased by approximately 20 per cent.

back to top

Global Comparisons

The below chart shows the average comparative costs of good quality city fringe, two bedroom, 2 bathroom, 120 square metre apartment situated mid level in the building with good views and a small deck.  By comparison a similar apartment in Auckland would cost around $400,000 plus around $50,000 for a single car parking space.

Table 1: Fringe CBD Apartment Values (NZD)

The information was collated from DTZ offices located in the above cities. The apartment specifications included: - A good quality two bedroom, 2 bathrooms, 120 square metre apartment including a small deck. - The apartment is situated mid level in the building with good views.