Tag Archives | housing

Focus on Northcote in push for affordable home development

Government-owned company HLC (2017) Ltd – the former Hobsonville Land Co Ltd – is pushing hard to increase interest in 5 development superlots at Northcote, in keeping with the new government’s desire to get 100,000 “affordable” homes built over the next 10 years, half in Auckland.

Bayleys Real Estate launched an expressions of interest campaign late last year, seeking private sector partners to develop the 1.58ha in the 5 superlots.

Under Labour’s KiwiBuild policy, The Government wants to get 100,000 affordable homes built within 10 years, half of them in Auckland.

HLC has supervised development at Hobsonville Point, in West Auckland, where over 1000 houses have been built in 5 years. On completion, that 167ha masterplanned development will have 4500 houses & over 10,000 residents.

At Northcote, the focus in stage 1 of redevelopment of the state housing block will result in 298 old state houses being replaced by 400 new ones.

For stage 2, HLC, a subsidiary of Housing NZ Corp, appointed Bayleys to release the 5 superlots, which range in size from 2572-3665m². Registrations of interest close on Friday 16 February.

HLC chief executive Chris Aiken said a shortlist of potential home builder partners would be identified by March and the final selection made in April.

55% of the potential 165 homes in the 5 superlots have to be “affordable”, defined as a maximum price of $600,000 for a terraced home, $500,000 for apartments.

On completion, the whole project will provide about 1200 new homes near the Northcote town centre over a 6-year period.

Earlier stories:
19 September 2016: Unitary plan helps lift Northcote housing target to 1200
16 May 2016: Council & Government join forces to redevelop Northcote land

Attribution: Agency release.

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Twyford launches the KiwiBuild plan

Housing & Urban Development Minister Phil Twyford.

Despite widespread construction sector doubt that delivering 10,000 more homes/year is beyond New Zealand’s capacity, Housing & Urban Development Minister Phil Twyford continued to talk yesterday as if the Government’s KiwiBuild initiative would deliver precisely that: 100,000 affordable houses over the next 10 years.

Treasury forecasts showed that KiwiBuild would boost residential construction investment by 10% by 2022.

The country, and particularly Auckland, has been running well short of housing demand, and well short of the previous government’s aspirations to get more homes built.

Consents have been stuck on an annual rate of 30,000 new homes for months. I wrote in July that, at an average 2.7 residents/household, New Zealand’s population increases of the preceding 2 years would have required housing increases of 36,000 homes built in the year to June 2016, and 39,300 built in the year to June 2017 (ignoring demolition or falling into disuse).

Mr Twyford said yesterday: “The latest forecast in the half-year economic & fiscal update shows an extra $5.4 billion of residential construction investment will take place over the next 4 financial years, largely as a consequence of KiwiBuild.

“Ministry of Business, Innovation & Employment projections under the previous National government had shown the number of houses consented would stall and start to fall in coming years. This government is focused on turning that around.

“Through KiwiBuild & policies to drive speculation out of the market, including the ban on non-resident foreign buyers, the Government is delivering a more stable housing market.

“Wages are forecast to grow faster than house prices for the first time since the global financial crisis, and interest rates are expected to remain low. Home ownership will become more affordable for New Zealand families.

“The Government will make these forecasts a reality by:

  • delivering 100,000 affordable homes through KiwiBuild
  • building more state houses, rather than selling off the ones we have
  • ensuring there is enough skilled labour, through our immigration settings & training initiatives
  • freeing up land supply
  • enabling infrastructure financing, and
  • enabling higher productivity in the building industry.

“The Government’s housing package will deliver more affordable homes, more state houses, improve the quality of rentals & security of tenure, and tilt the balance in favour of homebuyers, rather than speculators.”

Attribution: Ministerial release.

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3 Kings quarry plan change almost in place

Fletcher Residential Ltd’s proposed private plan change for the Three Kings quarry precinct ran into a minor timing hiccup yesterday on its way to being adopted by Auckland Council as if it were a council plan change.

Council plans & places general manager John Duguid told the council’s planning committee that, because of Housing NZ’s application for court costs against the 2 local societies which had opposed the quarry subdivision, as of yesterday the council couldn’t adopt the plan change.

That position was expected to change within days after Housing NZ withdrew its costs claim. The societies withdrew their appeal against the subdivision in May and, with the costs issue out of the way, the court could finalise the hearing.

The council committee unanimously approved a course to completion of the agreed plan change process.

Puketapapa Local Board chair Harry Doig said the challenge had cost the community “something like $200,000”, but it had achieved a better outcome and the local board now supported the council taking over the plan change.

The committee chair & deputy chair have delegated authority, along with an Independent Maori Statutory Board member, to approve adoption of the plan change once the precinct provisions have been made operative.

Fletcher Residential owned 15.2ha of former quarry, and the council owned about 6ha of former quarry, some of it used as sportsfields. In a change from some of the proposed land swaps, Fletcher wants to acquire council depot land instead of the sportsfields and intends to build up to 1500 new homes, plus a whare manaaki (a community educational & cultural facility).

Much of the development will be apartments, up to 5 storeys, with a minimum average apartment size of 55m² in buildings of 20 or more units. 30 garage lofts known as “Fonzie flats” are also planned, with a minimum size of 30m².

The development will also have cascading apartments built above the quarry rock faces and cascading over them.

Link:
Agenda item:12, Auckland unitary plan (operative in part) – private plan change request by Fletcher Residential Ltd – Three Kings 

Earlier stories:
6 September 2017: Council starts public process for city centre & waterfront planning refresh, plus 3 subdivision plan changes
2 February 2016: Minister takes Fletcher side on 3 Kings, and local politicians cry foul
25 November 2015: Three Kings development protest continues
Propbd on Q Th11Jun15 – Auction result, 3 Kings land exchange, decisions on plan changes, council model for elderly housing
14 November 2014: Three Kings debate goes to & fro, council to continue negotiating just with Fletcher
22 September 2014: Fletcher adds detail to 3 Kings plan change proposals
12 September 2014: 3 Kings plan changes approved for notification
4 May 2009: Winstone applies to cleanfill 3 Kings quarry

Attribution: Council committee agenda & meeting.

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Institute figures show Auckland housing market quiet, rest of country bubbling

Real Estate Institute statistics out yesterday showed Auckland’s residential median sale price was still rising, but only by 2.5%/year, whereas the rest of the country was up 11.4%.

The divergence in price between Auckland & the rest of the country remains wide. Auckland’s median in June was $850,500 ($830,000 in June 2016), while the median for the rest of the country was $431,000 ($387,000).

The institute’s house price index showed Auckland falling 0.6% over the year, but the rest of the country rising 9.2%. The national movement for the year was up 2.8%.

Auckland sales volumes fell 33.2% over the last year, and nationally sales fell 24.7%.

Real Estate Institute chief executive Bindi Norwell said yesterday: “We know that it’s winter and the election is just 2 months away now, which typically impacts the number of properties sold in the market. The number of properties sold across the country is the lowest we’ve seen in the month of June for 3 years – particularly in the $500,000-&-under property price bracket. This slowdown in transactional activity, but stabilising price trend, highlights the underlying dynamics between housing demand & housing supply, with population growth continuing to rise faster than building consents & dwelling supply.”

“The June figures show us that a number of things are happening across the residential real estate market – inventory levels are impacting pricing, loan:value ratios are having a significant impact in terms of buyers’ ability to purchase properties (particularly for first-time buyers) and that the major trading banks are being more cautious with their approach to lending, particularly their view of how highly leveraged Kiwis are when it comes to properties.

“Talk of a decline in prices may be premature, with the seasonally adjusted median price trends still rising across many regions in New Zealand. The Auckland market is the most mature in terms of the property cycle. However, at worst, prices in the Auckland region are steady at present. The data also shows an emerging trend of section sales in Auckland occurring more quickly than dwelling sales, highlighting that demand for sections is still rising in Auckland while demand for dwellings is easing.

“With the looming election, Auckland prices are showing all the signs of stabilising that we would normally expect, and we anticipate this being a similar trend over the coming months until the election is over.”

The number of properties available for sale rose by 1895 in June compared to 12 months ago, although the number of properties for sale in the Auckland region has increased by 3097 (57%).  Excluding Auckland, the number of properties for sale fell by 1203 (7.4%).

The number of properties sold by auction continued to decline, down to 828 auction sales in June (14% of all sales, from 13% in May, 24% in June 2016).

Auckland median prices & volumes on old council boundaries:

Price brackets:

Attribution: Real Estate Institute release.

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Report out today from mayor’s housing taskforce

Auckland mayor Phil Goff releases the report today of the housing taskforce he appointed in February.

In a release, he said it would make a raft of recommendations to address Auckland’s housing market.

The taskforce brought together people from the public & private sectors with a diverse range of expertise “to identify barriers & constraints to building more homes in Auckland at a pace & scale which meets the demand created by population growth, and to identify options and make recommendations to overcome those barriers & constraints”.

Link:
20 February 2017: Mayoral housing taskforce meets to tackle housing supply

Attribution: Mayoral release.

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Adams recognises importance of community, not just housing

The Government’s Hobsonville Point development reached a landmark 1000 homes occupied this week, celebrated with a visit to the latest residents by Social Housing Minister Amy Adams and local MP (and deputy prime minister) Paula Bennett.

HLC Ltd (ex-Hobsonville Land Co Ltd) chief executive Chris Aiken told the ministers 409 of new homes sold had gone to first-homebuyers and were in the “affordable” category, priced under $550,000. The average price across the development was $730,000.

Another 630 new homes are at various stages of production.

HLC has masterplanned the former Hobsonville airbase, but all the subdivisions on it are being carried out by private developers. The 1000th home, on Squadron Drive, is by Jalcon Homes.

Ms Adams, who’s also minister responsible for social investment, brought a different perspective to the housing role from her predecessor’s in a city where construction hasn’t kept pace with net immigration, let alone internal population growth.

Nick Smith, as housing, building & construction minister (and he retains the last 2 of those titles), was all about getting construction numbers up, and never sounded like he wanted to put that in context.

Ms Adams was pleased to see the 167ha of Hobsonville Point being turned into a vibrant community: “It’s not just about the new houses we’re building, it’s about the quality of community.”

Many of the homes at Hobsonville Point fit HLC’s Axis series design of cheaper, highly efficient construction, and Ms Adams said that raising the standard in this way would have an effect far beyond Hobsonville Point.

She also noted that, although the Government had instituted a programme of putting Crown-owned land to more productive use, including housing development, its holdings represented only 5% of housing land in Auckland.

Crown land is being used to lift construction output, and Ms Adams said that was a strategy that could be adopted in future downturns, to help the sector meet capacity requirements.

She also visited a new $12 million transitional housing complex on Puhinui Rd, Manukau, yesterday, and put that spurt of emergency accommodation into perspective: “When we think about social housing, it’s not just the number of houses [or flats or motel beds]. You have to think: Is there a market of houses we can move people back into?”

Hobsonville Point is one of many developments around the Auckland which have begun to lift construction from the low point in 2011, when only 13,500 consents for new homes were issued nationally. In the last 12 months, 10,200 consents have been issued in Auckland alone.

The 72-unit Puhinui Rd facility will help house up to 560 families/year, out of an estimated 3660 Auckland families and 8600 nationally who would need transitional housing in a year.

Attribution: HLC & ministerial releases, Hobsonville visit.

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Ngai Tahu Property secures another 2ha at Hobsonville Pt

Ngai Tahu Property Ltd has entered into a development agreement to build over 200 homes on 2ha at Hobsonville Point, one of the last undeveloped sites in the masterplanned community at the top of the Waitemata Harbour.

The newest acquisition resulted from an expression of interest process HLC Ltd (formerly the Hobsonville Land Co Ltd) conducted late last year. Ngai Tahu Property chief executive David Kennedy said yesterday it effectively doubles the size of the Kerepeti development, which will now deliver 417 homes over a combined 4ha.

The new site will contain a mix of apartments, terraced homes & walk-up apartments.

Based on a masterplan by Isthmus Group, the homes will be delivered in 4 stages. The first stage will contain 27 2½- & 3-bedroom terraces and 9 1½- & 2-bedroom walk-ups.

Mr Kennedy said 30% of the homes would be priced in keeping with Hobsonville Point’s Axis affordable homes programme.

Ngai Tahu Property is already developing 2 sites at Hobsonville Point through a consortium with the NZ Super Fund & New Ground Capital Ltd, but Ngai Tahu Property is undertaking this project on its own. The first homes on the consortium’s 2 sites, Uku & Kerewhenua, are due for completion early next year and will be available for sale off the plan from September through Colliers.

Ngai Tahu’s 3 development sites – 2 as part of a consortium.

Mr Kennedy said most of the homes in the new development would be available for sale as they are developed but, as with the accessible philosophy for the Kerepeti development as a whole, a portion will be retained and made available as long-term rental properties to be managed by New Ground Capital.

“We are committed to delivering attractive & functional homes that are in keeping with the fantastic location. All of the sites deliver a strong, connected community that adds to and benefits from the great levels of amenity that have made Hobsonville Point one of the most desirable new places to live in Auckland.”

HLC chief executive Chris Aiken said Ngai Tahu Property had demonstrated that developers can combine quality urban design, affordable housing & sound commercial returns working in partnership with the Government-owned HLC.

Earlier story:
5 May 2017: Construction starts on Ngai Tahu subdivision at Hobsonville Pt

Attribution: Company release.

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Pt England housing development bill passes second reading

The Point England Development Enabling Bill, to turn 11.7ha of the 48ha Point England Reserve over to housing and to advance Ngati Paoa’s historical Waitangi Treaty settlement, passed its second reading in Parliament on Tuesday by 62 votes to 43.

Building & Construction Minister Nick Smith said having 18ha on the Tamaki River fenced off for cattle to graze for over 30 years was a poor use of Crown land just 10km from Auckland’s city centre: “We are going to use 12ha for new houses & 2ha for a marae, as part of a treaty settlement with Ngati Paoa. The remaining 4ha will be added to the 32ha of public reserve space.”

Dr Smith said the legislation would guarantee an increase in the accessible public space, retaining at least the same area of playing fields and committing to spending all of the Crown’s proceeds from the housing development in enhancing the local recreational facilities & environment.

Earlier stories:
19 December 2016: Bill to enable housing on Pt England Reserve passes first reading
7 December 2016: Ngati Paoa to build 300 homes on Pt England Reserve, talks continue on reserve upgrade

Attribution: Ministerial release.

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National promise of 34,000 houses/decade for Auckland may add 2000/year

The headline is what matters in an election campaign, and the headline is that National is promising that, as the government, it will build 34,000 new houses on Crown land in Auckland over the next 10 years.

New Zealand has a record of not electing governments beyond 3 terms and National is ending its third term as the majority in a coalition, which jeopardises the chances of it being in a position to carry out the promise.

Social Housing Minister Amy Adams.

Amy Adams, Social Housing Minister and Minister Responsible for Housing NZ, revealed the figure in a speech at the Property Institute in Auckland yesterday. And then she proceeded to whittle it down.

The 34,000 is made up of 13,500 new social houses & 20,600 affordable & market homes.

Under the Crown Building Project, the Government will take down 8300 old, rundown houses.

Ms Adams said Housing NZ alone had over 50 housing developments under way in Auckland. The forward programme includes other housing projects already announced & underway:

  • Northcote, where 300 state houses will be replaced by 1200 new homes
  • Hobsonville Point, where the Government-owned Hobsonville Land Co Ltd (now HLC (2017) Ltd) is about to deliver the 1000th house in a programme to deliver 4500 homes
  • Tamaki, where the government-council regeneration project has a programme to develop 7500 new homes over the next 15 years, replacing the houses on 2800 Housing NZ properties
  • Other existing projects include 2700 new homes already announced under the Crown land programme, 580 houses under the Ministry of Social Development’s social housing reform programmes, and new homes for emergency & transitional housing.

By Ms Adams’ calculation, the Government would add 24,000 new – not previously announced – houses over a decade, though on the figures above the actual total might be less, perhaps down at 20,000, or an average 2000/year.

Comparing promises

Andrew Little.

That compares with Labour leader Andrew Little’s proposal last year for 100,000 new affordable houses nationally over 10 years, half of them in Auckland, which would include partnerships with private developers.

So, on top of existing projects, Labour has promised 5000 and National 2400 extra houses/year for Auckland.

Labour also promoted a dole for apprenticeships policy which would subsidise employers to take on around 4000 young people for on-the-job training in fields including building & construction.

Phase one of National’s Auckland housing programme, which covers the next 4 years, would cost $2.23 billion and be funded through Housing NZ’s balance sheet and $1.1 billion of new borrowing that the Government has approved as part of the business case.

Phase 2 in the latter years would be funded through the market housing development part of the programme & rental returns.

Ms Adams said ministers had also agreed that Housing NZ would retain dividends & proceeds from state house transfers, to help fund the building programme.

A glance at reality

The promises come after a period of extremely high immigration – a net inflow of 228,000 nationally over the last 4 years, 108,000 of those in Auckland, requiring 40,000 homes at an average 2.7 persons/household.

Building consents in Auckland over those 4 years started low, 6500 for the March 2014 year as the country was still gradually easing out of the global financial crisis, and totalled 34,200 for the 4 years.

Assuming 100% construction of consented homes (which is not normal, but I don’t have the exact figure), Auckland fell short of housing the net migrant inflow by almost 6000 homes over those 4 years. That housing requirement ignores, completely, the net flow of people within the country.

The National proposal might fill the gap if immigration eases, but on the slim information from the minister it would encourage pricing to stay high. On my calculation in February, consents for new homes nationally (excluding land) have risen 34% in value over the last 5 years – after a slow shift from the bottom of the market, between 6-7.7%/year for the last 4 years.

The land price equation in Auckland can be partly met by intensification throughout suburbia, land prices falling because of the freer availability of sites under the new unitary plan, and section sizes being reduced.

That doesn’t require tampering with rural:urban boundaries, which Labour has said it will eliminate. Those boundaries have a role in protecting non-urban land and in directing development into more efficient parcels.

Auckland also needs more infrastructure for housing development, but it needs to be in well devised communities with a supply of jobs nearby, not on the basis of rural carpetlaying. The local job requirement is fundamental but has been ignored as Auckland has spilled out along motorway corridors.

To catch up, New Zealand needs more builders with a longer future in the trade than the typical construction cycle allows. To do that, either the Government or some other industry supporter needs to ensure trade skills are being taught to enough people before a boom gets underway, and it makes sense to reduce booms, and therefore busts, with some smoothing of economic cycles (but not the total smoothing the US tragically & farcically tried in its attempt to avoid what became the global financial crisis).

As a cyclical high recedes, the building force needs attractive alternatives other than leaving for Australia. Some of that can come through infrastructure projects, which ideally should be separated in time from highs in house & commercial construction, thus reducing cost pressures as well.

Link:
Full Adams speech, 16 May 2017: Launch of Crown Building Project

Earlier stories:
16 May 2017: Little calls for end to negative gearing, and Property Institute calls it “cynical ploy”
6 March 2017: Auckland above 10,000 home consents/year again
10 February 2017: Smith exultant about figures that are plainly inflated
19 January 2017: Building consent highs still don’t match migrant demand
11 July 2016: Little sets out 8 planks to remedy housing issues
19 November 2012: Shearer proposes Government scheme to build 100,000 “entry-level” houses over 10 years

Attribution: Ministerial speechnotes & release, Statistics NZ tables, Labour releases, own articles.

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PSA survey highlights social harm of high housing costs & congestion

57% of Auckland respondents to a Public Service Association survey have said they’d considered moving out of the city because of housing costs and 39% over commuting.

The association – New Zealand’s largest with 62,000 members, 18,000 of them in Auckland – sought members’ view in response to Auckland mayor Phil Goff’s taskforce on housing supply: “In the space of 2 hours we received close to 1500 responses and by the time the survey closed this number had grown to 2512.”

The association said of the response: “The speed of our members’ response and the heart-breaking stories they shared with us was powerful evidence that our members are deeply affected by the housing crisis. Our members also provided many suggestions for how things could be improved, ways to increase housing supply, bring down the cost of housing and improve the quality of housing.”

  • 58% of respondents in single-income households with dependents pay at least half their income in housing costs, 22% pay two-thirds or more
  • 51% of double-income households with dependents spend more than half their pay on housing costs, 24% spend two-thirds or more

Both home-owners & renters told of the budgetary stresses arising from high housing costs. In addition, renters told of the high levels of fear & anxiety associated with renting.

Many respondents reported living in housing that’s too expensive and often very poor quality: “They report having very limited choices about the housing they can afford to live in and the quality & location of the housing. Many would like to leave Auckland but can’t get jobs out of the city. Others want to be able to stay close to their children’s school or to family members, which often meant having to pay very high rent, often for sub-standard housing.

“Some older respondents reported they would like to downsize and move to other parts of Auckland but that they can’t find affordable housing to shift into, or this would lead to change in the quality of their lives.”

Some of the many points made:

  • No laws support a long-term renting culture
  • Auckland would benefit from having a mix of homeowners, long-term & short-term renters, equally respected socially and by the law
  • The council needs to take an integrated approach to planning and ensure that affordable & quality housing is available across the city, so people can afford to live near their work, schools & their communities
  • If more new housing was smaller and in a good location (with reasonable amenity and near good transport links), much of the buyer market would gravitate there instead of expensive 5-bedroom standalone houses on the peri-urban fringes
  • Members expressed frustration about the complexities & difficulties in getting permission to build a small/tiny house, or live in housing structured in ways other than traditional subdivisions – such as communal/eco housing.

Mr Goff launched his taskforce on 20 February. It comprises council & central government officials and representatives of the private sector, and its objectives are to identify barriers & constraints to building more homes in Auckland at a pace & scale which meets the demand created by population growth, and identify options and make recommendations to overcome those barriers & constraints.

Mr Goff said Auckland was growing by about 900 people/week and needed 13,000 extra houses/year, but was building only about half that number.

The taskforce will make its recommendations public in May.

Link:
21 March 2017, PSA submission to mayoral taskforce on housing supply

Attribution: PSA survey.

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