James Kellow contends residential developments now going up are improving areas, and positively helping local people get into housing. Photo / 123RF
James Kellow contends residential developments now going up are improving areas, and positively helping local people get into housing. Photo / 123RF
COMMENT:
Three years ago, Auckland councillors were in marathon debates over many contentious aspects of the Unitary Plan. However, since it was passed in 2016, most public fears have disappeared as the massive overhaul in zoning rules delivers for Aucklanders as intended.
By and large, the residential developments nowgoing up are improving areas, not to mention positively helping local people get into housing. The Nimbys have well and truly retreated, helped also by the property industry growing up. Developers are implementing the council's urban design aspirations and delivering much better results when it comes to the aesthetics of buildings and creating attractive outdoor environments.
Concerns about property opportunists bowling into leafy neighbourhoods and erecting urban slums have not been realised. Instead, intensification has created attainable homes in market attractive areas for first-home buyers, young couples, and retirees.
In most cases, land prices are probably about the same as three years ago, but what has changed considerably are the economics for developers. More dwellings per site brings down the land component cost per unit, ultimately enabling greater affordability.
The Unitary Plan's more permissive zoning ensures a faster and less-expensive consenting process. Many affordable developments are also being helped by the likes of clever construction techniques, the use of relocatable houses, and an avoidance of sales commissions.
James Kellow contends residential developments now going up are improving areas, and positively helping local people get into housing. Photo / 123RF
New Zealand Mortgages & Securities (NZMS) is financing a significant residential development now under construction in Wattle Downs on the Manukau Harbour. Dubbed Wattle Park, the 2.4ha greenfield site on Mahia Rd will have 112 terrace houses - many of which have already been sold to community house providers. Others will come on to market early next year at a price point of about $600,000.
Without the Unitary Plan, this greenfield site would still just be that. And, without the likes of us being prepared to back the private developer from an early stage, things would be moving a lot slower.
Instead, a fully master-planned new community achieving affordability as well as plenty of public amenity and local pride will soon be a reality. It's really exciting because we're now seeing the rubber hit the road all around Auckland, with these kinds of multi-dwelling developments transforming neighbourhoods in a really positive way.
Despite past political visions of a compact city, the reality on the ground was always going to be different for Auckland.
You have to say despite all the doom and gloom economic predictions, we've landed in a pretty good place and the Unitary Plan has certainly played a role in that.
Great brownfield opportunities remain pretty limited in the city. Not only is utilised urban land more expensive, most sites are already delivering good income, so property owners are simply not as motivated to sell or redevelop. In some cases, sites are nothing more than at-grade carparks, but they're still making good money.
NZMS has currently committed $247m to financing residential development across Auckland, transacting significant amounts of new lending so far this year compared to last year. We are currently focused on largely multi-dwelling low-rise residential and in many cases, we're leading the way which is really rewarding.
We're involved in luxury apartments in Long Bay right through to affordable housing in south and west Auckland. We're also financing two apartment towers, a shared accommodation scheme in the CBD, not to mention supporting 150 factory-built houses being relocated to 17 different sites across the region where single houses mostly stood.
James Kellow. Photo / Supplied
The Auckland market has now normalised, helped by the likes of more land being opened up and the Reserve Bank using tools like tougher loan-to-value ratios (LVRs) to slowly and sustainably take the heat out of the Auckland property market. You have to say despite all the doom and gloom economic predictions, we've landed in a pretty good place and the Unitary Plan has certainly played a role in that.
What's more, interest rates are at record low levels, and the Official Cash Rate's downward track is not over yet. All things said and done, it's a very good time to get out of renting and into home ownership if you can.
Don't let anyone tell you borrowing money is getting harder. If you've got a reasonably good wage or salary to service a mortgage, you'll always be able to borrow. At the same time, if you're a developer undertaking a viable project, you'll still be able to borrow. In fact, banks are now actively looking for more business again and are offering some compelling deals.
Sure, in recent years some residential and commercial developments haven't flown, but the overwhelming majority have been really positive for Auckland.
• James Kellow is director of New Zealand Mortgages & Securities - Auckland's largest non-bank property financer.
