Auckland’s new unitary plan is already paying dividends for some homeowners.
New data from Homes.co.nz shows areas that are now marked to become high-density zones under the new plan are selling at a clear price premium as developers eye up their subdivision potential.
The plan was signed off last year, although it was not until February this year that the High Court rules in favour of some of the plan’s new high-density zones.
But property website Homes.co.nz shows the changes are already having an impact. You can check on this map to see what zone applies to your house.
READ MORE: Auckland high density housing decision ruled OK by High Court
More than half the properties sold within the new high-density zones have changed hands for more than one-and-a-half times their CVs. Only 31.7 per cent of properties in “single-house” zones are getting that premium.
“It’s becoming clear that the Unitary Plan is having a significant impact on the wealth of those lucky enough to own a sub-dividable property in a high-density zone,” said Homes.co.nz spokesman Jeremy O’Hanlon.
He said buyers who did not have plans to subdivide should be wary about buying places in higher-density areas because they would pay a premium.
“if you’re selling your home, make sure you are well aware of the zone of your property. Not factoring this into your pricing leaves you exposed to a developer making additional profit at your expense; or worse your home may be flipped.”
He said Homes.co.nz was adding unitary plan information to its property listings.
ASB chief economist Nick Tuffley said the plan changes would put a floor under the per-square-metre cost of land in Auckland. “But at the same time it does encourage that land to be used more efficiently.”
Without greater density, the cost of inner-city land would increase anyway as people sought property close to the city, he said. “Freeing up land and making sure there is adequate infrastructure [to build] helps take away price tension that has been there for quite some time.”
Gareth Kiernan, chief forecaster at Infometrics, said the plan changes were necessary for the city.
“Land prices were already getting too high to enable people to own traditional-sized sections. The changes in the Unitary Plan have been a necessary step along the way and should, ultimately, result in lower property-price-to-income ratios, albeit recognising that the reduced average amount of land per dwelling could effectively be interpreted as a reduction in ‘quality’.
“Nevertheless, at its most extreme, given the choice between being able to afford a $700,000 townhouse and not being able to afford a $1.1 million villa, I suspect that most people would settle for being able to purchase the more affordable property, even if, in an ideal world, they’d prefer a bigger back yard.”
BNZ chief economist Tony Alexander said there was nothing unexpected about the price data.
“Some land now has an extra characteristic of being subdividable. Thus it is worth more than non-subdividable land. The prices would only be essentially the same if no one expected there to be any need to subdivide the land to allow more intensive development. Think a small remote town for instance. One reason Auckland property prices have risen so much has been an expectation of subdivision becoming possible.”
Some of the winners:
7 Ballial Place, West Harbour- Sold for $1.39m in December 2016 with a CV of $530,000 (2.6 times CV) – Bought in May 2016 for $990,000
48a Ambler Avenue, Glen Eden – Sold for $1.795m in November 2016 with a CV of $690,000 (2.6 times CV)
30 Ranui Ave, Ranui – Sold for $1.098m in November 2016 with a CV of $440,000 (2.5 times CV) – Bought in April 2016 for $725,000