Big site sales to address development land dearth

Land for sale at 1938 & 1988 East Coast Road Silverdale - approximate location indicated by red circle

Four large 'greenfield' development sites for sale on Auckland's metropolitan fringe are being seen as the vanguard of big opportunities for large scale projects that will create entire new communities.

The quartet of bare land holdings, on the city's northern and southern boundaries, have come onto the market simultaneously and have the combined capacity to accommodate hundreds of new homes along with accompanying neighbourhood businesses. They are:

• A 42.1 hectare property zoned Future Urban for possible development under the Proposed Auckland Unitary Plan in Wainui to the west of Orewa and just five minutes from the Silverdale motorway interchange on State Highway One (SH1)
• A nearby 14 ha property in Silverdale, zoned Countryside Living under Auckland Council's Proposed Auckland Unitary Plan.
• An adjacent eight ha site zoned Future Urban for possible development under the Proposed Auckland Unitary Plan.
• A 17 ha site in Te Kauwhata close to SH1 with subdivision approval pending for the creation of 135 residential lots.

Three of the greenfield sites are among some 75 properties featured in Bayleys' latest national Total Property magazine released to the market this weekend while the Wainui land is being marketed parallel to the portfolio.

John Church, Bayleys' national director of commercial real estate, says the sites being marketed reflected a clear acceleration in the process of expanding Auckland's metropolitan urban boundaries, offering developers economies of scale for the construction of medium to large-scale residential housing projects with complementary commercial facilities.

"For several years now, constraints on the availability of medium to large-scale greenfield residential development opportunities has been cited as one of the major factors contributing to Auckland's new building costs being so high," says Church.

"We are seeing a growing pipeline of sizeable development sites coming to the market as consents are signed off through the appropriate council processes or future zoning changes are signaled through the proposed Auckland Unitary Plan. It has just been a matter of time, with a log jam of demand building up as a consequence.

"The bow-wave of these large scale development sites is now coming onto the market and in due course we will see the next phase, which is the creation of new subdivisions with provision for neighbourhood services to meet the city's ever-growing demand for housing."

Church says the Government's latest report into residential land development and housing affordability in Auckland has highlighted that residential construction in the city has spread from mature suburbs - now largely in-filled through subdivision - out to the metropolitan boundaries where the three of the landholdings being marketed by Bayleys are located.

"The report - compiled by the Ministry of Business, Innovation & Employment - highlighted that 'until 2003, about 66 per cent of each year's new dwellings [in Auckland] were located in established urban areas. Since then that share has declined to 51 per cent. The fastest growth over the last three years has occurred in the urban periphery'."

Part of the 42.1 hectares of land for sale in Cemetery Road, Wainui, west of Orewa.

Church says the ministry's analysis also replicates sentiments within the Auckland Council/Government housing accord, stating that "Auckland Council has acknowledged [land supply] shortfalls and is working both to identify new greenfield areas for inclusion in the pipeline, and to fully zone and service the areas already in the pipeline so that they are ready for subdivision as soon as possible".

He says feedback from a number of property developers with the expertise and funding to take on big projects, was that there simply hasn't been the supply of land available to meet their demands.

"Along the development chain, the bigger home-building companies involved in the likes of Hobsonville Point, Millwater, and Flat Bush are also looking to secure long-term projects to move onto at the completion of existing schedules."

The two Silverdale sites on Auckland's northern boundary are being marketed for sale by tender closing on May 21 while the Wainui property is for sale by negotiation through Karen Asquith of Bayleys Orewa..

The Te Kauwhata property is being marketed by Andrew Shaw of Bayleys Hamilton and for auction on May 21 at Bayleys' Hamilton offices.

The Silverdale sites at 1938 and 1988 East Coast Road comprise farm land overlooking SH1 approximately three kilometres away from the fast developing Silverdale town centre and are being marketed by Damian Stephen, Michael Block and Eddie Zhong of Bayleys North Shore Commercial.

Stephen says the sites are currently zoned General Rural and have the potential to be more intensively developed when the Proposed Auckland Unitary Plan (PAUP) comes into effect. The larger 14.05 ha holding at 1938 East Coast Road will be zoned Countryside Living which allows for rural/residential lifestyle subdivisions as a discretionary use in areas which are typically closer to urban Auckland or to rural and coastal towns.

The 8.01 ha of land at 1988 East Coast Rd will be zoned Future Urban which is a transitional zone that provides for land to be used for rural activities until it is released for development as infrastructure needs are planned and provided for.

Bayleys says the definition of Future Urban zone land is that developments must also provide opportunities for appropriate business activities and employment, community and educational facilities like schools and healthcare centres along with open spaces close to where people live.

To assist with the comprehensive development of these zones, owners are being encouraged to amalgamate sites with development rights able to be transferred to another 'receiver' site.

A similar scenario comes into play for the 42.1 ha of land in Cemetery Road, Wainui which is also a transitional zone.

To the south of Auckland city, the Wayside Avenue property near Te Kauwhata township, is being marketed in a mortgagee sale by Andrew Shaw of Bayleys Hamilton office who says the 17.01 ha Te Kauwhata site will offer affordable housing, although the 135 sections will be a spacious 800 sq m each.

View of some of the land for sale at 24 Wayside Rd, Te Kauwhata.

"The property is poised to benefit from the astonishing growth of Pokeno, a short commute of just over 20 kilometres up the motorway, by being able to offer much more affordable sections," says Shaw.

"It also sits virtually mid-way between Auckland and Hamilton - 50 kilometres in either direction - so sections could be also be targeted at residents working in either of those cities where housing has become very expensive."
Church says that a decade ago the four sites for sale would have been unlikely to have featured on the radar for developers looking to ultimately service the Auckland residential property market.

"As the Auckland supercity has undergone phenomenal population growth, outer locations of rural land have subsequently become residential subdivisions and in time are likely to be embraced by the greater Auckland conurbation spreading both north and south," he says.

As an example, Silverdale and the surrounding Hibiscus Coast area have undergone significant development activity over the past few years reflecting strong residential and commercial growth.

Statistics NZ says the Hibiscus and Bays Local Board area, including Silverdale, grew 9.7 per cent from 81,858 to 89,832 residents between the two censuses. Its medium forecast is for the area's population to grow to 146,600 residents by 2043 which is a 63.2 percent increase from the last census.

John Church of Bayleys

House prices have also jumped with the Real Estate Institute of NZ median house price for Orewa increasing by 47.6 per cent from $494,500 to $730,000 over the past five years. Much of the new development to cater for Orewa's growing population has occurred on greenfields land to the north west of the town with earthworks currently underway on over 300 new house sites.

Nearby, around 1100 sections in the Millwater development in Stillwater have already been sold, with a further 350 coming on stream this year. A total of 3000 properties are expected to be developed, housing about 10,000 residents.