3. Housing—Building Consents Supply and AffordabilityDr PARMJEET PARMAR (National) to the Minister of FinanceHousing—Building Consents Supply and Affordability3. Dr PARMJEET PARMAR (National) to the Minister of Finance: What reports has he received on trends in housing supply?Hon STEVEN JOYCE (Minister of Finance): Statistics New Zealand have just released its building consents for the month of May. The seasonally adjusted number of new homes consented rose 7 percent in the month although some of that was a catch-up from April. In the year ended May 2017 30645 new homes were consented nationally. That is up 8 percent from a year ago. In Auckland alone there were 10379 new building consents in the last 12 months. There is of course more progress ahead of us including through the Crown building programme but we are seeing the benefits of this Government's consistent actions to promote new housing developments and increase supply.Dr Parmjeet Parmar: How does the current increase in building consents compare with long-term trends?Hon STEVEN JOYCE: We have had to overcome a structural downturn in residential construction that began in 2003 to 2004. This hole in New Zealand's housing supply was evident well before the effects of the global financial crisis and the collapse of finance companies. New Zealand's housing market has been recovering since but the good news is that the 2039 stand-alone houses consented in May was the highest monthly number since June 2004. Consents overall are now more than double the level of the 2011 low point and nearly back to the mid-2016 peak. More developments of course continue to be worked on including the $1.2 billion Three Kings development which will provide up to 1500 additional homes in Auckland close to the city on well-established transport links.Dr Parmjeet Parmar: How is this increasing supply of residential dwellings being delivered?Hon STEVEN JOYCE: New Zealand's construction sector is performing well. In fact it is the largest it has ever been having grown 9.3 percent in the year to March 2017. The construction sector's share of GDP has increased steadily from 5.1 percent in 2012 to 6 percent currently. The sector is also employing its largest number of people at 245000 which is more than ever before despite the peak of the Christchurch rebuild now being over. David Seymour: Does the Minister agree that the output of homes has just returned to the level of 2004? Hon STEVEN JOYCE: Well I think that is what I actually said in answer to the first question. Of course 2004 was the previous highest level of construction activity. Dr Parmjeet Parmar: How does growth in New Zealand's housing supply compare with Australia's? Hon STEVEN JOYCE: Well our cousins across the Ditch are experiencing a tough patch at the moment. Dwelling approvals in Australia came in weaker than expected with a 5.6 percent fall in May resulting in total approvals for the year being down nearly 20 percent. All major states are seeing total dwelling approvals down from a year ago. New Zealand is fortunate to be in a much stronger position. Our consistent economic plan is giving homebuyers developers banks and construction companies the confidence to invest and increase housing supply in this country and the relative position of our two construction industries means there will probably be more workers coming back across the Tasman to work on New Zealand housing. David Seymour: Does Australia have an affordable housing market? Mr SPEAKER: In so far as there is ministerial responsibility—the Hon Steven Joyce. Hon STEVEN JOYCE: That would be a question for the Australians but what I can tell the member is that the New Zealand housing market is much more robust in terms of supply and that is what we need. After the period from 2004 to 2009 when there was a big decline in construction now we are having a big increase in construction which is doing a tremendous job of filling in the supply gap. David Seymour: Considering Australia has the second-least affordable market in the English-speaking world after New Zealand why are we comparing ourselves with them? Hon STEVEN JOYCE: Well I am not sure that I could agree with the member in his characterisation of the New Zealand housing market because actually if you have a look at it the New Zealand housing market is more affordable in terms of the cost of servicing mortgages and so on but we can talk about that. But in terms of the comparison with Australia the comparison I am making is the strength of the New Zealand construction market compared with that in Australia. Phil Twyford: Why do he and the Prime Minister and the Minister for Building and Construction always blame Auckland Council for the restrictive planning system that makes urban land so expensive when at any time in the last 9 years the Government could have published a national policy statement under the Resource Management Act to prohibit the use of an urban growth boundary? Hon STEVEN JOYCE: Let me explain to the member what happened. In 2003-04 there was a law change that allowed the regional councils—Phil Twyford: In the last 9 years. Hon STEVEN JOYCE: Let me take you through it—let me take you through it. The regional councils' metropolitan urban limit was put in place as being superior to the local councils plan. That caused a massive decline in housing construction in Auckland to the point where in 2009 there were only just over 2000 houses a year being built in our biggest city. Since that time the construction sector has grown dramatically and now we have nearly 11000 houses being built in our largest city. But we have had to recover from the terrible situation that was left from that change in 2004. Phil Twyford: Surely he does not believe the spin of his Minister for Building and Construction that the special housing areas and the Auckland Unitary Plan are the same thing as abolishing the urban growth boundary given that the unitary plan still has an urban growth boundary and Auckland continues to have some of the most expensive urban land in the world? Hon STEVEN JOYCE: The member is missing the point. The problem was that the previous Government put in place—Phil Twyford: You've had 9 years.Hon STEVEN JOYCE: —this requirement. I am trying to explain it to you Phil. From 2004 down to 2009 there was a massive decline in construction and from 2011 to 2017 there has been a massive increase in construction. Spot the difference between those two things. The Labour Government stalled the housing market in Auckland; the National Government is growing the housing market in Auckland.