There are numerous high-quality large-scale modern developments being constructed that meet the call for intensification, but do not compromise on quality including Karaka Lakes. Photo / Nick Reed
The day of the Kiwi quarter-acre dream is now just that, a dream of yesteryear, especially for those of us who call Auckland home.
Housing supply constraints have resulted in the need for our city to intensify its land use to try to bridge the supply-demand divide.
Many people I talk to cringe at the concept of intensification; nightmares of crowded and polluted overseas cities quickly creep to the forefront of any discussion.
However, this does not need to be the reality.
There are numerous high-quality large-scale modern developments being constructed across our city that meet the call for intensification, but do not compromise on quality and provide many of the core values that our communities thrive on through the promotion of neighbourhood events and communal parks and reserves.
To name a few of these developments: the Addison Development in Takanini, Karaka Lakes and Harbourside Estate in Karaka, Stonefields, the Millwater Development in Silverdale and Hobsonville Point.
"But why would I buy into one of these, I can't afford to build a new home," is a common response I hear when discussing the potential of buying in such a modern development.
These misconceptions appear to fade quickly when potential returns and the benefits of buying such a home and land package are considered.
The introduction of the initial Loan to Value lending restrictions has impeded entrance to the marketplace for many buyers who do not hold an adequate deposit, with banks now required to ensure 20 per cent is held in most instances.
However, in an attempt to support new building and moderate house-price pressure the Reserve Bank removed the 20 per cent restriction on construction lending.
Those seeking to enter into one of the new developments I have mentioned can now do so with a significantly lower deposit. As a result, we are seeing such developments becoming increasingly popular among first-home buyers.
In addition, the changes to LVR restrictions, which will require a 30 per cent deposit for property investors from October 1, won't apply to those building their first home or those building a new home, as long as it is their only property.
As the wider Auckland residential property market continues to strengthen in value, these modern developments have also experienced upward price movements.
The latest qv.co.nz Evaluer Quarterly Report to the end of March shows that values in suburbs where these new developments are going up have risen significantly.
The average Evaluer for Takanini increased 12.9 per cent between March 2014 and 2015, up from $444,350 to $501,500.
Karaka is included in the Papakura suburb figure in the Evaluer Quarterly Report figures. Papakura increased 11.9 per cent in the year to the end of March, with the average Evaluer up from $375,000 to $420,300.
However, if you search on qv.co.nz you can also see the average Evaluer for Karaka is now $869,250 - so values there tend to be at the higher end of the Papakura market.
The average Evaluer at Stonefields rose 9.5 per cent year-on-year to the end of March from $977,050 to $1,069,400, and Silverdale's average Evaluer rose 7 per cent over the same period from $848,500 to $909,700.
Hobsonville's average Evaluer also increased 13.2 per cent from $696,150 to $788,200.
Within the more established of these developments evidence of even greater value growth is shown across one to three years.
Those who seek to buy into such developments as an investment are also able to attract premium rental rates.
Modern developments allow for the intensification of housing stock to occur, while still creating high-quality, family orientated suburbs with the promotion of community events and communal areas at the heart of their design.
Perhaps it could be suggested that the Kiwi dream is not a dream of yesteryear, but has been redefined to fit into the modern way of life.
James Wilson is a QV registered valuer.
Nearly 90% of new mortgage lending in October was floating or fixed for a year or less.