New Zealand's affordable housing crisis explained. Video / NZ Herald
First home hunters squeezed out of traditional entry-level Auckland suburbs are being pushed to the far reaches of the city but face massive daily commutes to work.
As Auckland wrestles with how to squeeze in an additional 400,000 homes and stem house price inflation, debate is raging over whether to intensify upwards or allow further urban sprawl.
The Proposed Unitary Plan will set out which suburbs can expect a proliferation of more affordable terraced housing and apartment buildings to cater for up to a million new residents over the next 30 years.
But some commentators also want council planners to relax the metropolitan urban boundaries and free up land on the city's outskirts to help meet demand.
The question of whether to allow more urban sprawl is vexed and divisive.
Proponents argue arbitrary boundaries are artificially driving up the value of scarce land within the metropolitan urban limits by constraining land supply that could otherwise be used for much-needed housing.
Removing this artificial constraint, the argument goes, would open vast tracts of viable land to developers, adding crucial housing stock and helping to stem house price inflation that has seen the median Auckland house price hit $820,000.
But opponents say allowing new subdivisions to spill endlessly into the countryside will have serious environmental consequences, put more cars on the city's clogged roads and cost hundreds of millions of dollars in new infrastructure.
Property Council chief executive Connal Townsend said the urban limits were designed with the "very best of motives" but were ultimately "clumsy and perversely stupid".
"Land supply is constrained and that is overwhelmingly the principal driver [of rising house prices]. It's economics 101."
Mr Townsend said land value alone now accounted for more than 50 per cent of the cost to develop an Auckland home.
While more intensification was required closer to the city to give people more affordable housing options, vacant land sitting idle on the city's periphery had to be unlocked.
Connecting far-flung housing developments to roads, public transport links and essential water and sewerage networks was "massively expensive", he acknowledged. But the current system which forced developers to shoulder that cost through development levies was counterproductive. They simply passed it on to buyers, loading the cost of infrastructure on to the upfront price of new houses, making it even harder for young couples trying to break into the property market.
Mr Townsend advocated the model used in some Texan cities, where municipal bonds were issued on the private investment market. Investor money financed new infrastructure and a targeted rate was then levied on home owners.
"The benefit is you get some cash to put the infrastructure in. You [also] get inter-generational benefit over a long period of time. It smooths the whole process and makes the load much, much less. It becomes more manageable."
QV spokeswoman Andrea Rush said rising house prices had pushed many buyers to the city's periphery and to districts considered within commuting distance of Auckland.
Huntly, Pokeno and Tuakau to the south had become popular, as had Helensville to the northwest and Kaipara, Wellsford and Warkworth to the north.
Land and home packages in new housing developments were especially popular among first home buyers, who could scrape in with 10 per cent deposit on a new build rather than having to save the standard 20 per cent nest egg. These had sprung up in places like Millwater, Karaka and Takanini.
But buyers had to weigh the commuting time and costs of living so far from the city, which would largely depend on where they worked.
Better rail infrastructure - like that seen overseas - was key. A reliable, fast rail network connecting growth areas like Pokeno and Wellsford to Auckland city would reduce commuting times and make purchasing on the city's outskirts more viable and attractive.
"There is real potential for better lifestyle if people can get on trains."
However, more intensive housing in suburban Auckland that was well designed and with outdoor living options for families was essential to cope with population growth and give buyers affordable alternatives.
Mr Townsend also backed the extension of fast rail south.
"With a high-speed, double-track electric train screaming straight into Britomart, Huntly could be a very viable option. And Huntly is not that far from Hamilton. This is the way successful cities work."
Loan Market mortgage broker Bruce Patten said first home buyers priced out of traditional entry-level Auckland suburbs now needed to look further out.
"You are talking about going to Pokeno and Tuakau and the like in order to get something realistically, but you do have to consider the travel. You're going to be commuting a long way so your cost of living is going to be greater."
Buyers could still pick up an entry-level Pokeno home in the low $600,000s, but faced a long trek into the city during rush hour traffic.
Auckland Deputy Mayor Penny Hulse said unabated urban sprawl was not the answer.
"It's expensive, it has huge impacts on transport and it also impacts on quality of life. Ask anyone who takes two hours to get to work in the morning."
The council was focused on creating a "compact city" but had also earmarked large tracts of land outside the urban boundary where up to 130,000 homes were envisaged.
"We're releasing a lot of land but we're releasing it at the speed we can afford to service it."
It was imperative to sort out transport infrastructure like train connections and busways before building far-flung subdivisions that created more congestion on the city's gridlocked motorways, she said.
The council is seeking public feedback on draft transport networks to support future housing and business areas planned for greenfields land in the northwest, south and north of the city.
"We can open up all the land we want. But people need to be able to get to and from work, and if they are spending two hours on motorways each day, that's not going to be a good investment for anyone."
$400,000 home but long way to drive
Mr Brown eventually settled on a vacant quarter-acre section in Meremere, a small north Waikato town just 50km from Hamilton. Photo / Supplied
The moment of realisation came after Ben Brown and his partner looked at an 80sq m former P house in South Auckland with holes in the floor that was selling for $400,000.
"This is ridiculous," Mr Brown said. "We're going to look further out."
They'd saved $60,000 and also had KiwiSaver funds to draw on for a deposit. But after two years of searching for a house, the kind of property they were looking for was selling for around $700,000 in South Auckland and something had to give.
So Mr Brown and his partner Catherine Murray, both 27, decided to look further south. They eventually settled on a vacant quarter-acre section in Meremere, a small north Waikato town just 50km from Hamilton.
But with settled jobs in Auckland, the couple will remain Jafas and are now bracing for a long daily commute.
"The commute is moderately long, but not ridiculously long," Mr Brown told the Herald. "It's either that or you rent."
For around $400,000 they will soon own a new house on a large plot of land complete with modern kitchen appliances, scullery and landscaping.
It's somewhere they hope to raise a family and to be mortgage-free within 10 years.
Mr Brown, who rides a motorcycle, reckons the morning journey to his job in Penrose will take about 40 minutes if he times the traffic right or an hour if he hits rush hour.
Ms Murray works at Auckland Airport for Air New Zealand and will probably "car or bike share" with Mr Brown.
Although Meremere had had its problems, Mr Brown said it had changed a lot in recent years and several other new houses were being built on his street alone.
He estimated he had spent several hundred thousand dollars on rent since leaving university about six years ago - "that's money I'm never getting back".
The couple - who also considered moving to Huntly - believed other entry level buyers would be forced to the city's fringes by the insanity of Auckland house prices.
