Strong demand is driving up prices The main underlying cause of the housing shortage in Auckland is the continuing record net inflow of migrants, against a background of very low residential construction activity over many years.
As seen in figure 1, the outflow of Kiwis has slowed over the past three years at the same time as the inflow of foreigners and returning Kiwis has accelerated. This has reflected the strength of the New Zealand economy as well as weakness in Australia and the broader global economy.