How might the unitary plan affect Auckland’s housing prices?
The Auckland Unitary Plan has been completed, detailing a vision for the future of our city. Focuses of the plan include, making housing more affordable, increasing dwelling supply by up to 422,000 over the next 25 years and compacting the city’s centres.
Some fairly extreme suggestions have been proposed, but Auckland’s property market may need such drastic measures to help steer it in the right direction.
Let’s have a closer look at the plan to shed some light on how it may affect our property market in future.
22 per cent of single homes will be rezoned for intensification
Decreasing density restrictions in residential zones
The plan has proposed that compacting Auckland is the way forward for achieving goals of affordable housing and efficient infrastructure. If the board’s recommendations are carried through by the Council (at the moment it’s looking like most will be), 22 per cent of single homes will be rezoned for intensification, a figure that increases to 42 per cent in Central Auckland.
According to a NZ Herald insights report, rezoned areas will include Remuera’s fringes, Orakei, Herne Bay and Kohimaramara, among many others. There has been a media furore around these changes, with many residents complaining that developments will ruin the character of their suburbs and decrease their property values.
In opposition to this opinion, Morgan Foundation economist Geoff Simons has reasoned that the opposite may be true. In an article in the National Business Review he suggested that because resident’s properties can now house several dwellings, their land values may increase even further then they already have.
If this holds true, property prices in rezoned areas will decrease and land values will increase – meaning that both current residents and future home-buyers will benefit.
Supply to exceed demand by 2041
The plan’s goal of 422,000 new dwellings by 2041 is a lofty one indeed, requiring massive commitment from developers and construction companies. If this goal is met it could have considerable positive effects on the property market and housing’s affordability.
In fact for the first time in years, housing supply will exceed demand by up to 22,000 dwellings, according to the unitary plan’ forecasts.
The cause of the problems in our housing market have long been identified as a simple deficit in supply. If this is corrected, common sense suggests that dwelling prices should drop and housing should become more affordable. First-home-buyers will be particularly excited by this prospect, and may once again consider real estate in Auckland as a viable investment.
For the first time in years housing supply will exceed demand by up to 22,000 dwellings.
Other possible effects of the plan
It’s impossible to know exactly how the plan’s recommendations will effect our city, however a few basic outcomes can be forecasted. As mentioned above, housing should be more affordable. Additionally, the plan’s focus on intensifying preexisting residential hubs such as Takapuna, the CBD and Stonefields should and bring these areas to life and improve the efficiency of public transport (an improvement Auckland has long been in need of).
Plans to extend the rural boundary of the city may lead to the establishment of new town centres, or the development of existing semi-rural areas such as Papakura. This will help provide a variety of housing options for buyers who would rather stay out of the city. Development in such areas may also help to provide even more affordable housing for those still struggling to buy closer to town.
Regardless of what the effects may be, it’s certain that Auckland’s market is in need of help to steer it in the right direction. Whatever it’s essential you know the state of play, and get the right advice when buying into Auckland’s residential property market. The right decisions could set you up for life.