Allowing higher density development in Australia could help ease housing affordability issues, according to analysis of New Zealand planning changes.

Auckland “up-zoned” about three quarters of the city in 2016 in response to a housing affordability crisis. The changes allowed for the construction of townhouses, terraces and units within 20km of the CBD.

Research by the Cowles Foundation for Research in Economics at Yale University found that, as a result, Auckland has built an extra 26,903 homes in the past five years.

Report author Dr Ryan Greenaway-McGrevy says the success can be attributed in part to the almost blanket introduction of higher density development throughout the inner suburban area of Auckland.

“If cities are considering up-zoning they really need to shy away from only small, targeted areas that are permitted to build up and think about implementing the policy more broadly,” he says.

Brendan Coates of the Grattan Institute says these kinds of policies could lower the cost of housing in Australia by 12.5%.