Why Auckland’s rezoning plan could raise property values
Details of the Proposed Auckland Unitary Plan are starting to emerge as the city prepares for major rezoning that will see it divided up into 43 areas. While this marks a new chapter in the city’s history, it could also have significant ramifications for real estate throughout the local area.
The plan, which has been developed since 2011, involves increasing the amount of different housing types throughout Auckland. Mixed housing in suburban areas will account for approximately 43 per cent of the residential area, closely followed by single housing inside the rural urban boundary.
Weighing up the case for affordability
Auckland City Council explained how the Unitary Plan would allow for improvements to affordability. One of the primary aims will be to make sure it’s a “quality compact city”, where growth is centred on the existing metropolitan area.
It also believes that by increasing the number of housing options, affordability will improve. This is something the city could benefit from, not least because property values have been rising over recent years.
Auckland Council released a report earlier this year titled ‘A Spatial Analysis of House Prices and Rents in Auckland, 2001-2013’, which reflected on the extent of these price increases. Between 2010 and 2014, the council acknowledged that prices have accelerated, despite remaining relatively flat across the rest of the nation.
It also identified trends among rental properties, with east Auckland and the North Shore generally lagging behind the rest of the country in terms of yields.
Limiting the impact of the Unitary Plan
The spotlight on affordability might turn out to be misplaced, argues chairman of the Home Owners and Buyers Association John Gray. Speaking to Fairfax Media on 22 December, he suggested that once property developers get involved, the impact of rezoning might be quite different to what the city council imagined.
He believes that the potential for three-storey, mixed housing could mean prices rise throughout the city, making real estate in Auckland less affordable for the masses.
“Those that now fall into those areas that are defined for intensification are seizing the opportunity to leverage that in the sale of their homes,” stressed Mr Gray.
A final report on the Unitary Plan isn’t expected to be made until July next year, with hearings due to end three months earlier. There’s still some time for these concerns to be addressed and for the finer details to be put into perspective.