How is housing demand assessed?

Predictions or forecasts of housing demand are most often based on demographic forecasts of population change and assumptions around household formation patterns. Household formation is conditioned by economic opportunity and specifically whether or not individuals or families have sufficient income or other entitlements to rent or buy a house.

Short of asking everyone living in such circumstances for their housing preferences, there are few if any ways of knowing the extent of unmet housing demand without making some assumptions around what an ideal household formation pattern would be.

Housing demand is shifting, largely due to a growth in the aging population. Between 2011 and 2026, New Zealand’s population is projected to grow by 13%.  The number of people in the +65 age group is expected to increase by 61% during this time, while all other age groups combined will grow by only 5.4%[1].

The housing needs of baby boomers who have not gained a foothold in home ownership may result in an increasing rate of poverty amongst older households unless more social housing units are built[2].  This demand for social housing may level off but is expected to increase as the baby boomers retire.

The housing related poverty of benefit dependent working age households may increase in the face of rising rents in Hamilton where there is strong population growth. This may cause these households to relocate to more affordable markets but where job prospects are fewer.

Both Immigration and the fact the housing in Hamilton is more affordable than Auckland have resulted in the population of Hamilton growing along with house prices. These factors have added to the housing shortage in Hamilton.

[1] Jackson, N. (2011). The demographic forces shaping New Zealand’s future. What population ageing [really] means. NIDEA Working Papers.

[2] Johnson, A. (2013). Give Me Shelter. An Assessment of New Zealand’s Housing Assistance Policies. The Salvation Army Social Policy and Parliamentary Unit.

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