An appetite for shoebox apartments is returning as the Auckland housing shortage bites, a property expert says.
The demand comes as the Government pushes for smaller apartments in a bid to make Auckland housing more affordable.
Martin Dunn, managing director of real estate agency City Sales, said allowing 20 square metre studio units would let cash-strapped buyers get apartments in Auckland for $140,000.
"For young kids trying to get a start in the property market they could buy them with 20 per cent deposit," Dunn said.
"It would be a very good thing for the city."
Finance Minister Bill English said this week that Auckland Council planning rules were fuelling rising Auckland property prices.
Planning restrictions should be relaxed to allow smaller apartments, which could be in the price range of hard-pressed Aucklanders, English said.
He acknowledged not everyone would want small apartments, but it would at least create choice.
"People have to live somewhere, and they can choose not to live in somewhere they think is too small," English said.
No Auckland Council representative was available to comment on English's proposals.
Auckland City Council increased the minimum apartment size from 30sqm to 35sqm in 2007 as a response to a flood of vacant, tiny apartments in central Auckland.
An Auckland Council spokesman said: "Many Aucklanders voiced concerns about small apartment sizes in their feedback on the March 2013 draft, so minimum sizes were increased, based on this feedback and direction given by councillors."
However, Auckland Council is revisiting its planning process and is reviewing those minimum sizes under the proposed unitary plan.
"Aucklanders were given a second opportunity to have their say on the proposed rules through the formal submission process," the spokesman said.
"Council has received approximately 8900 submissions, which are currently being coded and summarised. All submissions will be made public on council's website at the end of May."
Dunn had fought against the shoebox boom of a decade ago.
Developers at the time were building apartments containing solely studio units and creating "ghetto" apartment cultures, he said.
"It was a town-planning disaster."
However, mixed apartment units were attractive to investors and first-home buyers. Demand for compact apartments was outstripping supply in the inner city, he said.
"Mucking around with loan-to-value ratio is childish. The problem is supply," he said.
"We can expand down to Hamilton up to Warkworth or embrace this unitary plan. That's the only way for Auckland to move."
Dunn agreed with the Government that there needed to be a push for smaller housing stock to meet rising Auckland demand.
The Government's housing initiative at Hobsonville Pt in Auckland has offered up trial homes ranging from a one-bedroom 40sqm house to a three-bedroom 89sqm home.
Housing Minister Nick Smith said at the launch of the project last month that New Zealand houses had been growing consistently larger even though household size had declined.
The average house size in New Zealand is twice as large as in the United Kingdom.