KEY POINTS:
Auckland's biggest landbanker, Hugh Green, surveys his kingdom with some satisfaction. Three decades ago, he and a partner bought whole districts surrounding what was then a much smaller metropolis.
The blocks of dirt were in areas which Green recalls were then dismissed as being "out in the sticks".
Green owns huge areas in Helensville, Papakura, Massey, Weiti (between East Coast Bays and Whangaparaoa Peninsula) and Manukau. Back in the 1970s, these areas were rambling rural blocks with distant city vistas, home to cows, horses, sheep and crops.
Now the city is rolling out to meet Green's farms and growing fast as councils apply to expand the metropolitan urban limit.
Some want houses to head his way even faster, telling the parliamentary select committee inquiry into housing affordability this week to give them more land.
Green, a low-profile multimillionaire who came here from Ireland's Donegal more than 40 years ago, is no skite - but as almost certainly the city's largest landbanker with a holding of well over 1000ha on Auckland's boundaries, it takes him a while to count his blocks of land. Now in his mid 70s and still speaking with a strong Irish accent he does his methodical tally using the imperial measurements to which he is long accustomed.
"Well, there's 600 acres (242ha) out at Highway 16, Massey. Then 1000 acres (400ha) at Weiti Station past Albany. And another 1000 acres at Helensville, 200 acres (80ha) at Park Estate Rd at Papakura and 220 acres (90ha) at Manukau."
Farmland surrounding Auckland sells for about $16,000 a hectare, but can easily fetch double that if land zoned for rural purposes is included within the urban boundaries.
One expert says: "I'd say his land would be worth closer to $100,000 to $500,000 a hectare. That makes his holding worth between $120 million and $600 million because a lot of his land is so close to Auckland. He wouldn't sell any of it for $16,000 a hectare."
But Green's land is all being farmed and he has a taciturn approach to even being asked about it.
"Why does anybody buy land?" He waits for the answer. "To make money. Yes, precisely. I've been farming it for 30 years. I bought it to farm and I wasn't interested in whether the metropolitan urban limit was pushed out because when I bought it the land was all out in the sticks."
Perhaps surprisingly, he is not an advocate of abolishing the urban limits to free more land for housing. He says it would not necessarily achieve the goal of bringing down section prices.
The land component is often blamed as the single most expensive part of an urban home, but Green says that when it comes to housing affordability, local body charges for subdivision and building consent are far greater factors than scarcity of land.
Owen McShane, a former town planner and director of the Centre for Resource Management, sides with Green.
"As the costs of development and subdivision and compliance get higher and higher, more and more people cannot afford the risk of developing," McShane says. "I find I am now frequently advising clients not to subdivide because the costs and risks and delays are too great. Some council's consultants and staff seem determined to drive developers - often ordinary families - into bankruptcy. So if there is landbanking going on the local authorities and agencies like DoC and ARC and Forest and Bird and Transit are to blame."
Richard Langridge, who owns Metropolitan Rentals, also says steep council building charges are the biggest disincentive against landbanking.
People buying land to bank, with development as their end game, had to factor in council charges.
Putting up a multi-level parking building in Dominion Rd was a two-year struggle, yet the city was crying out for more development and more land.
Another factor reducing the pursuit of landbanking is the growing significance of leasehold sales in most property deals, Langridge says, citing Macquarie's 20-year ground lease at 60 Westney Rd near the airport. No outright sale was struck, and this is becoming increasingly common.
Land cannot be banked if just the leasehold is traded, with ultimate ownership staying in the vendor's hands.
Nevertheless, Langridge did pocket a handsome profit when he sold his interest in the sprawling 60ha plot Westney Estate to NZX-listed Macquarie Goodman Property Trust.
Langridge says he never regarded this site, bought in partnership seven years ago, as a landbank because development was already under way. But he does acknowledge that the land has strategic value.
Mangere's Westney Rd runs parallel with George Bolt Memorial Drive and is crucial for development, because it is so close to the airport. "That airport area has just gone mad lately," Langridge says of the logistics firms' boom at Manukau.
Hugh Pavletich, a Christchurch developer who is also co-author of the Demographia international survey of housing affordability, believes that ringfencing cities such as Auckland and Christchurch is a daft idea and has made cities unaffordable. Instead of paying $200,000 to $300,000 for an urban fringe section, prices should be only a fraction of this, he argues. Freeing more land on city fringes would depress prices in a pure supply-demand equation.
Insecure land supply has driven up house prices to make our cities some of the world's most unaffordable - a ridiculous situation, he says, when only a tiny portion of our 268,680 sq km is occupied. He calculates that only 0.65 per cent of New Zealand's total land mass is urbanised.
The Planning Institute agrees that land supply is just one factor in home prices. It says councils have been caught off-guard by rapid demand for housing in the past five to 10 years and trying to get zonings changed has been cumbersome and hard. "So is the problem with housing affordability simply a shortage of zoned, serviced land?" the institute asked in its parliamentary submission.
Not entirely. Other factors it cited were the high costs of building and labour, land wastage through large-section-only subdivisions in areas like Tauranga, and the impact of demand from investors for property because of the lack of capital gains tax.
GROWING PAINS
Auckland has already pushed out its limits by 1500ha since 1999 in five separate expansions, mainly after 2003.
The Auckland Regional Council says these "new" urban areas taken into the city's boundaries are:
* 1000ha at Flat Bush in East Tamaki
* 80ha at Takanini
* 318ha in the Hingaia/Papakura area
* 5.8ha at Point View Drive/Mill Rd in Manukau
* 80ha block of Babich winery land at Swanson
Opponents of expanding the metropolitan urban limits ask: If Auckland doesn't have enough land, how is it that areas like Flat Bush still have sections waiting for houses?
But some of the biggest undeveloped land areas within the metropolitan limits are fast disappearing:
* Auckland International Airport has one of the largest property reserves and uses only a portion of its available land, but is developing rapidly.The airport has 1500ha of freehold land within 21km of the CBD. Of that, 180ha is earmarked for development in the near future. Around 300 businesses are located on its boundary.
* The Hobsonville Peninsula has about 200ha able to take thousands of people in new housing estates and big plans are already in train.
* For decades, the biggest "farm" in the city was the Fisher Estate at Highbrook until the Australian Macquarie Goodman Group bought a 75 per cent share of the land to build offices and storage. The 153ha block on the Waiouru Peninsula will cater for 9000 to 12,000 workers.
* The former Winstones quarry at Mt Wellington was a sleeping giant. LandCo and Fletcher Building have moved in to put up houses.
* Sylvia Park, also at Mt Wellington, was home to army storage sheds until Kiwi Income Property Trust built its new retail centre there.
* At Albany, Neil International owned by the wealthy Tiongs of Malaysia held big tracts of land south of the village. Now, development is going at a rapid pace as Westfield builds.
* At Long Bay the North Shore City Council has 44.2ha of reserves. Auckland Regional Council has 119.4ha in the Long Bay Regional Park. Developer Landco proposes to build on 176ha of its holdings.
* In West Auckland, AMP shopping centre has bought 15ha of strawberry fields at the end of the North Western Motorway in the expectation of the land being re-zoned and being able to build a new $234 million town centre.
