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A property expert says Tauranga is on the cusp of significant change with a big shift towards higher-density housing across the Bay.
Stats NZ figures show the number of multi-unit residential dwellings consented in the Bay of Plenty climbed to 74 in November last year compared to 25 the same month the previous year - an increase of 196 per cent. Building consents for houses fell 51.8 per cent from 195 to 94 over the same timeframe.
The latest figures continue a longer-term trend which saw the number of multi-unit dwellings (apartments, townhouses, units and other) rising from 477 in 2019 to 873 at the end of 2021 in the Bay of Plenty.
In Tauranga specifically, the council issued six building consents for 13 dwellings in November 2021 and eight for 74 dwellings in November 2022, the majority in Gate Pā, Parkvale and Pāpāmoa.
Morgan Jones, managing director of property services company Veros, said Tauranga was “on the cusp of pretty big significant change” and expected the trend to continue. The city was catching up with other major centres in terms of building upwards rather than outwards.
“Auckland, Wellington and Christchurch dominate the townhouse, flat and apartment types of housing across New Zealand.
“Hamilton in the last decade has started to provide a lot of one, two and three-storey duplexes, townhouses and terraced homes, and Tauranga has always been a step behind those four cities.
“I think now we’re catching up, and with all the planning and everything that’s gone on locally over the next decade, if you look ahead for Tauranga as a city, our proportion of medium-density housing typologies that we’ll deliver will grow significantly as a proportion of our new housing supply.”
Jones thought the biggest factor driving the upwards trend was that Tauranga was one of the most constrained land markets in the country, and that meant development blocks were increasing in price due to competitiveness.
However, the amount of planning and infrastructure required to open up the city’s greenfield areas, particularly Te Tumu and Tauriko West, was “significant”, and “meaningful housing supply” was “still years away”.
Veros managing director Morgan Jones. Photo / Luke Kirkness
He believed the council was making it easier to develop multi-unit dwellings, and that coincided with central government changes for Tier One local authorities which allow for three dwellings of up to three storeys in height without resource consent on most residential sections.
In Tauranga, it’s called Plan Change 33, and it also aims to make it easier to build apartments between four and six storeys high within a five to 10-minute walk of some commercial centres, with heights of eight storeys allowed along Cameron Rd.
Council received submissions on the plan last year, with an Independent Hearings Panel due to consider them all and make recommendations to the council at a hearing scheduled for July.
“It’s going to be a massive change from what we’ve had in the past and in the history of Tauranga,” Jones said.
Jones said the biggest issue facing multi-unit dwelling development was “the worst market conditions” there have been for a decade.
“We have the right planning framework, infrastructure planning and so on in place, largely across the city. That happens to have coincided with the worst market conditions that we’ve had for delivering new housing in probably 10 years.
“We’ve got a whole lot of the pieces of the puzzle in place, but then we’ve got a market where development finances are hard, mortgage rates have gone up [and] construction prices, materials and labour force [costs] have gone up in a really constrained market.
“The actual ability to deliver new housing is really challenging.”
Jones said Tauranga’s shifting typology towards multi-unit dwellings was driving the housing market in places like Ōmokoroa, Te Puke, Rotorua, Whakatāne, Kawarau, Matamata and Morrinsville.
“We’ve got a constrained market here to provide new housing, but a lot of people still want to live in the Bay.
“The reality is, [Tauranga] is in a constrained land environment, [and] if you want a quarter-acre section with a standalone house, you actually need, these days, to look elsewhere, and that’s where you can pick up a different housing typology that’s probably more traditional for a different price point as well, in those different markets.
“Rotorua is one of those areas where the market’s still providing the standalone on medium-to-large sections that you probably can’t get at a comparable price point in Tauranga.”
Out of the 74 dwellings issued in November, there were four in Pāpāmoa, 10 in Parkvale and Brookfield, 48 in Gate Pā and two in Mount Maunganui.
Tauranga City Council commission chair Anne Tolley said increasing applications for multi-units was “a step in the right direction”.
“Tauranga, like other major cities across New Zealand, is in the midst of a housing crisis, and we desperately need more housing choices for our community.
“We need to grow up as well as out to provide enough housing for our growing populations and to create a vibrant, thriving city.”
Tauranga City commission chairwoman Anne Tolley. Photo / George Novak
University of Waikato environmental planning professor Iain White said traditionally, Kiwis have not had to make “hard choices” about housing and space, except for the likes of Wellington, with its hilly typography and coast.
One of the big reasons New Zealand cities grew outwards rather than up was because they expanded around the same time the car became popular, whereas denser cities overseas started before cars existed.
He thought the consenting figures were “really positive” and could be great for the city centre, and that more multi-unit dwellings would diversify the housing stock.
“We have a lot of the same kind of house in New Zealand – having a diverse housing stock is good because it allows people to have different styles of living at different times of their life.
“If you’re in your 20s, you might want to live in a townhouse in the city centre; if you’re bringing up a family, you might want to be elsewhere, and if you’ve sold up and want [something] low-maintenance, you might want an apartment in the city.
“[More] people living within walking distance of the city centre stimulates the local economy - when you get more hospitality, more retail, you see land values rise. One of the best things you can do to economically regenerate a city centre is to have more people living closer to it.”
