Nick Smith and Len Brown announce property developments already underway and call it progress

Essentially Auckland Council has started receiving applications for Housing Accord related special consent processing.

The Government and Auckland Council have announced plans to fast-track developments in Auckland that could accommodate over 5000 houses.

The announcement made in Huapai, West Auckland, by Housing Minister Nick Smith and Auckland Mayor Len Brown named 10 “special housing areas” under the recently agreed Auckland Housing Accord, signed by the Government and the council.

They expect two major initial tranches being:

1. October – announced today;

2. February 2014.

The first tranche is essentially made up of mostly developments that have prior stages and future stages that are inactive or coming up that developers want to fast track.

Apart from land in Huapai and Wesley College near Pukekohe there is nothing within the first tranche list that isn’t already planned for or which wouldn’t happen over time in any case with a regular consent process. In short the list is predominantly made up of staged developments where developers are taking advantage of a faster consent process. You have to wonder why Nick Smith would stand on a stage with Len Brown just days out from election day and make big announcements like this…especially when it is nothing new or wondrous. 

Except for the two mentioned the balance could have been reasonably expected to come on stream in the next 12 months without any complications.

So this means that the first tranche of housing accord consents has not resulted in releasing any more land than otherwise would be available. Almost all of the development land is already zoned thus fate acompli in the scheme of things.

Whilst Auckland Council was always going to accept consents for proposals in zoned areas the over arching emphasis on land release was to be in greenfield areas. Clearly bugger all greenfield has been brought to the table so far.

There are some risks and concerns that perhaps the housing accord qualifying criteria isn’t helpful. Requiring a certain percentage of houses to be ‘affordable’ and qualifying that as to mean 75% of the average house value in any particular local area is about as scientific as boiling water in a pot.

The other option to qualify requires a developer to discount some properties by loading the price of the balance in a development which presents its own issues like how do you justify the higher price for the balance when you have sold some at a discount?

Nobody knows if developers can deliver to these expectations.

And here is the issue – if developers could deliver product at 75% of average house values – and presuming a reasonably large market demographic exists ready to snaffle up property at that price range – wouldn’t they already be doing that?

After all a market worth exploiting and profiting from is one desperate to own property and developers are ones to miss a trick or an opportunity.

There appears to be a lack of justification for the qualifier. And perhaps with such an onerous qualifier developers are simply finding it difficult to qualify.

At the same time Redwood Group developer Tony Gapes has been busy selling down his Panama Road Mt Wellington development – Springfield Park – in droves. His first stage is almost entirely sold out. But here is the thing – the cheapest – most affordable dwellings are one and two bedroom units priced from $330,000. He has only a couple of these yet the more expensive four and five bedroom dwellings which are priced over $500,000 have smoked out the door.

Affordable might be the political catch cry but can it be delivered and when it does do people want to buy it? Possibly not.


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  • blokeintakapuna

    Remind me again how Labour intend to build 10,000 Auckland homes a year, every year for the next 10 years?

    • ConwayCaptain

      At 350,000 PER HOUSE THAT IS 3.5 BILLION. Where is the money coming from???

      • Muffin

        Pretty sure government can push that cost up to 700k per house and end up borrowing twice that again.

      • johnbronkhorst

        Initially they said $300 000. Has the cost gone up already? Imagine what the last house to be built will cost in 10 years time.

      • johnbronkhorst

        Other questions.
        Where are the builders, plumbers, electricians, painters, roofers etc.
        Coming from? or is work in Christchurch going to stop?
        Where are the building materials coming from? With the artificial demand the govt. will create (guaranteed sales) volume will not bring the price down as it would normally do.
        With this much borrowing, $3 billion to $3.5 billion. What will the credit agencies say….”downgrade” perhaps?
        With 10 000 houses…….where are the buyers? In any market, before you “invest” dollar one in your business, you PRUDENTLY and pragmatically assess the potential market. ie where is buyer number
        83 000 in year 9 coming from?
        With the change back to labour ridiculous consent laws how long will it take to even break ground on these houses? Is there time to even build them in one year (10 000)?
        Are there enough 600 Ha of land parcels (because that is the minimum required), to actually build these houses/subdivisions?
        How will this skew the infrastructure requirements, causing increased costs in other areas, such as schools, shops, buses, roads etc?
        Any other questions?

  • ConwayCaptain

    Will Lying Loopy still be mayor on Monday??

    • ratesarerevolting

      yes and he will still be a fucking cunt !

      damn your eyes Maurice you coward !

      • andrew carrot

        Maurice would never have won because he is lazy and above all that stuff that goes on during elections, which I think is called “campaigning” or, euphemistically, “meeting the people”.

  • James

    “discount some properties by loading the price of the balance”

    Or, in other words, force some people to pay more their houses so that freeloaders can get theirs cheaper (and probably turn in a nice little profit by immediately on-selling).

  • Never in the dark…..

    I really question the timing of these little announcements just ahead of an election.

    I question, why a National led government are fronting it too. If it was just Nic Smith I could understand, but Bill English too?

  • JC

    “And here is the issue – if developers could deliver product at 75% of
    average house values – and presuming a reasonably large market
    demographic exists ready to snaffle up property at that price range –
    wouldn’t they already be doing that?”

    Thats what puzzles and concerns me. I know from my QV monthly reports that the Auckland market is working, ie, buyers are moving out towards the cheaper suburbs till they hit their price range and builders are building some numbers of houses of what people want and can afford.

    Now we find from the census that AK is growing at only half the rate that was expected.. so is it mainly a perception and hype of demand in AK?

    And wouldn’t the builders 5000 new homes per year be a better guide to demand?


  • philbest

    It is patently obvious that building more than 10,000 houses per year in Dorkland, and affordability, are compatible objectives, and either both will be achieved, or neither.

    What needs to happen, is large scale subdivision building at the rate of more than 1000 homes per year, in several locations simultaneously.

    And the land has to have been either bought on the rural market outside the current growth boundary, at rural land prices; or compulsorily acquired.

    The Key government has not displayed the cojones necessary so far to achieve anything like this, and Dorklanders appear to support the “Church of Gaia” unreason and the BANANA-ism (Build Absolutely Nothing Anywhere Near Anything) that prevents the necessary policy changes from being made. So the pollies are scared of the stupid and misinformed voters, is about what it comes down to.

  • Patrick

    Why would Nick Smith be cuddling up to Brown? Because he is a twat, a fool. He has no political smarts at all. How many times has he been caught out? As for his climate change BS. This fool should be sent packing with a boot up the arse.

    • kehua

      Totally agree, the man is an embarrassment and a twat to boot.