Building – New Unitary Plan no silver bullet

The Auckland Council announced, with much fanfare, the passing of the new Auckland Unitary Plan on August 15.

It combines a complex number of District Plans inherited from the various District Councils prior to the amalgamation of the super city, to present to Auckland and central government a single plan to govern the growth over the next 30 years.

It has been a long and arduous task, with competing emotions and commercial objectives of Government agencies, residents, developers, builders and planners which is understandably never going to please everyone, no matter what the outcome.  

However don’t expect the new plan to be the silver bullet to fix Auckland’s housing woes – namely the shortage of supply and spiralling house costs – anytime soon.  

The Unitary Plan sets an ambitious target of 422,000 new dwellings over the next 30 years – that’s around 14,000 per year. Given in the past 12 months (ended June 2016) that 9651 consents were issued in the Auckland region, we still have a long way to go to get anywhere near this level of development. Some commentators are understandably sceptical – anyone who has tried to get a builder, plumber, electrician or concreter lately will understand the constraints on the building industry at this time. As valuers, we see this daily with our customers who are building new dwellings with the timeframe from initial valuation “off plans” through to completion extending all the time.

Add to this mix the chronic shortage of infrastructure investment across the region, and the overly long time it takes for subdivisions to transition from concept to delivering new dwellings, and we can’t see any easing of the supply issue for some time to come; especially while we see net immigration flows remaining positive and current build levels struggling to keeping pace with this inflow.

Will this affect prices – hardly. Given that the intentions of this new Unitary Plan has been largely understood for some time, many property sales that have occurred, especially those with development potential, have already factored these changes in.

For the Hibiscus Coast, the Unitary Plan has opened up more land for Future Urban development; we can see swathes of land available west of State Highway 1 from Dairy Flat through Wainui and west of Orewa, plus north of Hatfield’s Beach. Realistically, however, this will probably not be ready for occupation for five or more years yet. So other economic drivers, such as higher interest rates, falling population levels or other controls affecting the property industry need to come into play before we see any significant market changes in the short to medium term.