Instead of constantly blaming Asians for soaring house prices, why not look at how Asian countries tackle housing problems?

Simon Draper, executive director of the Asia New Zealand Foundation Te Whītau Tūhono, recently wrote in local media about New Zealand’s red-hot property market since the second half of 2020. He urged people to stop blaming Asians for excessive house prices and shared successful approaches to housing problems from several Asian countries.

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Over the past decade, immigrants, particularly those from Asia, have frequently been unfairly blamed for excessive house prices and housing shortages, becoming targets of widespread criticism. Yet the sharp rise in house prices in recent months tells us that the issue is far more complex than previously imagined.

For almost a year, the pandemic has largely cut New Zealand off from the outside world, with departures far exceeding arrivals. Nevertheless, house prices have continued to rise, while the enormous challenges facing first-home buyers have repeatedly made headlines.

Everyone recognises that this is a serious problem, but a good solution remains elusive—or at least the government still seems to have no idea what to do.

What is the best way to provide people with affordable, quality housing? New Zealand is clearly not the first country to face this question. Here, I would like to discuss strategies adopted by some Asian countries that might offer lessons for New Zealand.

Many Asian countries have very high population densities and frequent internal migration, particularly from rural areas to cities. This has forced them to explore alternative ways to address urban housing needs. The most effective solutions combine a long-term, broad perspective with coordinated national planning and integration with other infrastructure and supporting services.

Singapore: large-scale public housing construction gives people homes of their own

Singapore may be the clearest example. It plainly has little spare land available: the entire country is about the size of Lake Taupō, yet it is home to 5,700,000 people.

In 1959, Singapore also faced a severe housing shortage, as the government and private businesses could not build enough homes for the immigrants pouring into the busy port nation. Today, however, Singapore has one of the world’s highest rates of home ownership.

Notably, Singapore’s average house price is only 4.6 times average household income. In New Zealand, the average house price is around 8 times average household income; in Auckland, it is 10.4 times.

So why has Singapore left New Zealand so far behind on housing, while New Zealand can only point fingers? A long-term outlook is arguably the crucial factor.

Over the years, Singapore has developed a comprehensive, coordinated system covering institutions, fiscal and financial measures, land use and planning, turning the vision of abundant housing and a home for everyone into reality.

In 1960, Singapore established its Housing and Development Board to rapidly house its growing population. In the late 60s, extensive rental subsidies were provided under the Home Ownership for the People Scheme.

Singapore’s government has consistently honoured its commitment to affordability for residents. By 2021, around 80% of Singaporeans lived in government-built apartments purchased on 99-year leases.

Government ownership of the land ensures that first-home buyers can access affordable finance, while limits on the number of public housing properties an individual may own prevent speculation. Public housing is open to all income groups, while wealthy people with substantial cash reserves can still buy and sell homes in the private property market.

Of course, no system is perfect, nor can it simply be transplanted into another country or setting. But Singapore’s success suggests that New Zealand’s housing problems should not be insoluble.

At this point, I can almost hear the sarcastic objections: New Zealanders do not want to live cheek by jowl in matchbox-sized Asian apartment blocks. My answer is, of course, no—we need not live that way. But consider a modern Singapore-style apartment: three large bedrooms, two bathrooms/toilets, parking, and a gym, tennis courts and swimming pool close by, all for NZ$500,000. To me, that does not sound bad at all.

Japan: prefabrication and mass production reduce costs

Some other Asian countries have adopted similarly coordinated housing solutions. After the Second World War, Japan adjusted its national planning system to substantially increase urban housing supply as its population grew rapidly. In the 1990s, rapidly rising house prices prompted further adjustments, helping prices remain relatively stable even in major cities such as Tokyo.

Japan is also known for its distinctive, innovative ideas. One example is the celebrated Muji House: a compact, beautifully crafted, single-storey prefabricated wooden home from Muji, the retail giant known for minimalist design. Japanese companies, including household names such as Toyota and Panasonic, also lead the design and production of prefabricated housing components, effectively reducing construction costs through mass production and technological innovation.

Commentators have identified New Zealand’s complex building consent system as the greatest barrier to wider adoption of prefabricated homes. Asian examples show that the efficiency and cost benefits of this construction method warrant the necessary reforms to our existing system.

The UK-based Royal Institution of Chartered Surveyors assessed affordable housing policies in Asian countries and identified many effective approaches, including:

• Government-led models
• Public–private partnerships
• Encouraging private investment within legal and infrastructure frameworks, among other measures.

One common feature was that “most Asian countries generally view housing provision as part of economic growth, rather than simply as social welfare”.

Of course, affordability remains a problem in some Asian countries. Some previously effective approaches also need to be adjusted as circumstances change, to reflect new economic or demographic conditions.

Nevertheless, there are certainly many effective solutions to today’s increasingly serious housing problems. Asian countries’ successes show that an effective housing system is a national asset that benefits every citizen and can narrow the gap between rich and poor.

Simon Draper (Simon Draper) is the executive director of the Asia New Zealand Foundation (Te Whītau Tūhono).