Skyrocketing demand for public housing may have peaked, with the number of applicants declining over the past quarter for only the second time in nearly eight years.

Housing Minister Megan Woods said it was “pleasing” to finally see the numbers track down, and showed new builds starting to make inroads.

Spiralling demand for housing support from the country’s most vulnerable people has been a constant source of criticism targeted at the Labour Government, which campaigned back in 2017 on fixing the housing crisis with at the time also rising rates of homelessness and reports of families living in cars.

Since 2017 demand for social housing has increased roughly fivefold. On top of this are close to 4000 households living in emergency housing, such as motels, with costs of roughly $1 million a day, and the number of people living in cars has also increased.

A tipping point however may have been reached, with quarterly social housing demand appearing to have peaked in March this year at 26,868 applicants.

It then declined by about 200 through to June and has now dropped further by nearly 2000 to 24,996 as of September compared with March.

These are the first two quarters that have seen declines in demand since June 2015, when the waitlist was at 3352.

 “It’s really pleasing to see the housing register numbers tracking down,” Woods told the Herald.

Since September 2017, near the time Labour formed a government, there has been a net increase in 10,637 public homes, now totalling 76,834.

Of the new homes, 3798 of those have been built by state landlord Kāinga Ora - now with more than 65,000 homes in its portfolio - and 6840 by community housing providers, who now account for more than 11,700 public homes.

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Housing Minister Megan Woods. Photo / Mark Mitchell

Woods said there had been a lot of progress in Hastings and Rotorua where, historically, new housing hasn’t kept up with population growth.

“But we’re turning that around. So far, we’ve delivered over 175 public homes in Hastings, which National left with 192 fewer public homes.

 “In Rotorua, we have so far delivered 230 public homes, which National left with 42 fewer. We are making up for all those years where public housing was run down and hundreds of millions of dollars [$576m] was pulled out in dividends.”

Woods said increases to benefit levels were also likely making private rentals more affordable.

“We’ve made changes [through the Residential Tenancies Act] so there’s more security of tenure and rent increases are limited to once a year. In addition, MSD [the Ministry of Social Development] are improving the information they get from those on the housing register so if they are safely housed, they are removed from it.”

The latest data also shows a declining trend in demand for emergency housing, including motels.

Demand appears to have peaked at 4983 households in November 2021, with a fall to 3621 last month. There are currently 3372 children in those households, down from 4599 in November 2021.

The costs have also declined significantly, from a peak of $41.4m across December 2021 to $27.7m in October this year - the lowest since July 2021.

National Party housing spokesman Chris Bishop previously called the high demand for social housing an “utter failure” by the Government, and claimed Labour did not have a plan to fix what was now a “housing catastrophe”.