So, why does the property industry hate the compact city?


The property industry hates Auckland’s compact city dream. The loathing is substantial.

There are a few players who like the compact city idea – but those people have more to gain from restricted supply that boosts the value and demand for their investments.

And there are the gravy train troughers who sit on committees and feel important and cherished. They like the idea too. But they are mostly consultants.

The rest of the property industry thinks the compact city sucks. It’s like dog poo on their shoes.

Partly the loathing is universally influenced by the seething hatred that the property industry has for planners and the processing hoards of hairy-foot hobbits in the Council organisation. These meddlers and haters of the world cause mayhem and angst 24/7 for the property industry with slow processing, crap decisions and constant niggle.

But the compact city is the incongruous icing on the cake.  

What the property industry wants is momentum. It wants growth and volume. It also wants to reach as wide an audience of buyers as it can.

What the property industry doesn’t want is to be held back, pushed into ever higher price brackets and forced to capitalise into vastly more expensive intensive projects.

The Productivity Commission a few years ago noted that 80% of all housing in New Zealand is delivered by sole traders – the local builder with his small gang of staff. They lack the capital to build intensive housing. And they lack the appetite for the risk associated with it.

The industry is mostly set up to deliver standalone houses, not a compact city.

And that industry needs land.

Imagine being in a business where you struggle daily – not to sell product but to find product to sell. The biggest issue is land. And there isn’t any because every parcel of land has a building or house on it.

The compact city has stuffed things royally for the property industry. If it weren’t for immigration the industry in Auckland would be on its knees.

There isn’t any land to build on. And it’s so expensive to develop housing that the buying market is shrinking every day. The very thing the property industry wants – volume – is being choked by a Council who want to rebuild a city that can’t and won’t be rebuilt.

And so the property peeps hate it. Intensification is a cup of cold sick.


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  • Justme

    Intensification will not work. To do that one would need to consolidate several properties. With prices as they are now, to buy several properties, and consolidate them and rebuild extra homes onto them, the homes would need to sell for $1.5m just to break even. And that is a house without any land to walk on.
    A great idea in theory, the compact city, but that horse has well and truly bolted.

    • Andy

      Good points

  • edenman

    Why would developers want to pay in excess of $1m for an existing property then the cost of demolition, cost of subdivision and then other approval costs to then build 2 or 3 town houses, If greenfield land was available I’m sure it would simplify the process and the time frame for producing results and a return on their costs.

  • biscuit barrel

    Like it or not, the new developments on the city fringes are much more of compact city than most of the existing suburbs.
    Compact city is being built before our eyes, as the above photo shows.

    “Hobsonville Point …The Axis Series homes will be built throughout the township. Axis provides for one and two-bedroomed homes. They may be stand-alone, semi-detached (in a pair), or terraced (in a row).


    • one for the road

      The above photo is not Hobsonville Point, it is most probably Stonefields – the difference is that HVP has a strong design and colour palette, whilst the houses above are all of similar palette -grey!! But yes, HVP is a good positive example of a contemporary, well designed, compact city

  • RogerB

    Nailed it again ! If you want to see a situation as to how the supply of land is fixing housing demand look at Christchurch . There has been a massive expansion of new subdivisions in and around Christchurch . The problem is that expanding the green belt is an absolute anathema to you guessed – the lefties ! They want everybody to walk or bike to work hence their ideological adherence to the requirement for Auckland to be a compact city . To fix the problem Auckland simply has to enable/allow the green belt to expand and start building new subdivisions – it would reach the stage where those in a certain market range would have an ample supply of houses and that in turn would bring the market price back to reality. If you want to live in the very best existing suburbs you will pay accordingly – no matter where you live .

  • Andy

    These types of housings like HVP are very popular in Rep. of Korea for example. The standalone houses are expensive and some areas have the homes of movie stars and singers. Being compact and densely populated there are all the services within the neighbourhood. As well you can park your car. What a shame though if only the largest companies can invest to make them. And is it a problem if Kiwis can’t actually afford them?