KEY POINTS:
The meltdown of two of the country's biggest housing projects has ditched developments worth $700 million and is forcing many in the property sector to rethink their future.
This week's news of receiverships at the $450 million Kensington Park and the $250 million Whisper Cove, both north of Auckland, has left people wondering which project will fail next.
Tony Alexander, chief BNZ economist, said one big outcome was that fewer new houses would be built.
"New dwelling supply is falling as more developers go bankrupt," he said.
The collapses have raised serious issues for the valuation community and left other developers examining the future of their schemes.
John Kirikiri, Rodney District Council's deputy mayor, said the collapses were a great concern to both the council and community.
"Our concern is primarily for those local industries, contractors and property purchasers affected by the receivership of Kensington Park and now Whisper Cove. As a council there is not a lot we can do or to say to them.
But it's a definite commitment of this council that we will work with the receivers to do whatever is possible to arrive at the best possible solution for all affected parties.
"This situation with Kensington Park and now with Whisper Cove is indicative of a greater malaise within the property sector nationally and internationally underpinned by the financial markets. These two projects may be in Rodney but they are not representative of Rodney," Kirikiri said.
"This district is still seen as - and is - a fast-growing community offering plenty of business opportunities and the future for Rodney business generally remains a good one," he said.
But a Rodney District Council spokesman was talking tougher, vowing to ensure the council got any money owed.
"Any outstanding development contributions or rates owed will be collected - even if it is from the receiver," the spokesman said in reference to KordaMentha's involvement.
"When and if someone does take over these stalled developments, we'll insist on strict compliance with resource consent approvals," he said.
Some people have begun to question the thinking behind big high-density housing projects far from Auckland's heart.
Rodney Dickens, managing director of Whangarei consultants Strategic Risk Analysis, said the Orewa failure raised issues about this particularly style of housing and whether New Zealanders were ready to embrace the concept.
He doubts the demand for high-priced intensive suburban living like Kensington Park but said not all projects would fail.
Others have raised questions about council fees.
Owen McShane, director of the Centre for Resource Management Studies, said councils should not charge high development contributions because this had been a major cause of financial problems for developers. And if projects failed, receivers should be able to recover fees paid for houses which would not be built, he said.
A major builder says his firm is in good shape after completing its contract at Whisper Cove.
Peter Kay, a director of Kalmar Projects, said his firm won a commercial building award for the 36 units at Snells Beach and had been paid the entire $23 million it was owed.
PROPERTY PANIC
WHISPER COVE
* Developed by Lance Hodgkinson.
* $250 million project.
* 160 villas/houses on 16ha.
* At Kawau Bay, Snells Beach.
* Just 36 units are up.
* In receivership.
* Westpac is the main funder.
KENSINGTON PARK
* Developed by Patrick Fontein.
* $450 million project.
* 750 houses/units on 15ha.
* Off Centreway Rd, Orewa.
* 60 places are up.
* In receivership.
* BNZ is the main funder.
