New home plan no quick fix

Housing Minister Nick Smith. Photo / APN

The first batch of 6000 new homes for fast-track residential development in Auckland has been hailed a significant step by the Government but got a lukewarm response from property experts and opposition parties.

Housing Minister Nick Smith and Auckland Mayor Len Brown yesterday announced 10 "special housing areas" in addition to the first deal last week with community housing and Maori groups to build 280 homes next to a Child, Youth and Family child protection residence in Weymouth.

Some of the special housing areas, such as Anselmi Ridge in Pukekohe where houses are expected to sell for $550,000 to $750,000, are not in the affordable range, while others like Weymouth and Alexander Cres in Otara, will largely be low-cost housing.

Some groups, such as the Orakei Local Board, are planning meetings to understand the effects of special housing areas on their communities, including the impact on residents bordering affordable areas.

Upper Harbour and Hibiscus & Bays Local Board member Lisa Whyte said building more homes in special housing areas was a huge threat to attractive communities.

"It will change the lifestyle and we need to step up and make sure it's done in the best possible way," she said.

Massey University banking expert David Tripe said the first batch of 6000 homes was a step in the right direction, but the impact in the short run would be relatively limited.

"I don't think we are going to see falling house prices in Auckland anytime soon," he said.

Real Estate Institute chief executive Helen O'Sullivan said the addition of 6000 sections would help keep a lid on house price pressure.

"But it's only one piece of the puzzle. There is no one thing that will fix [price pressures]," she said.

Dr Smith and Mr Brown said there would be varying requirements for a proportion of homes in special housing areas to be in the affordable range.

The council and Government signed a housing accord to tackle Auckland's housing shortage and overheated property prices with the aim of consenting 39,000 new homes over three years.

Dr Smith said land supply was the most critical issue to improve housing supply and affordability in Auckland. Mr Brown said the accord could not or would not solve Auckland's housing supply problem, merely bring forward projects.

Labour's housing spokesman, Phil Twyford, said instead of affordable homes the result would be row upon row of McMansions and a few crumbs to first-home buyers, with only up to 10 per cent of the 6000 promised in the affordable range. Green Party co-leader Metiria Turei said Auckland had a serious shortage of affordable housing and National had passed up an opportunity to help fix it.

Race to beat loan rules lifts property values

Property values across New Zealand rose at an 8.4 per cent annual pace last month, with first-time home buyers busy before the arrival of low-equity home lending restrictions. The increase was driven though by a shortage of houses in Auckland and Christchurch, valuer Quotable Value (QV) said.

In Auckland, property values rose at a 13.6 per cent above annual pace in September while in Christchurch values were 10.8 per cent above last year.

The national pace slowed slightly from 8.5 per cent annual growth in August.

QV research director Jonno Ingerson said nationwide values were growing but not at the rate experienced in those two cities.

"Most of the rest of the main cities and provincial towns are also increasing, but at a much more modest rate." It would take some time for the Reserve Bank's loan value ratio (LVR) caps to have an impact on the market because banks had a number of pre-arranged loan applications.

"This is likely to cause a short-term flurry in activity as people rush to secure a property before their pre-approval expires."