Land in limbo a risk for investors

Millwater is being extensively developed. Photo/Nick Reed.

Land values have been rising across Auckland along with home values and, with the latest QV statistics showing the market is increasing at the fastest rate since mid-2004, it's no surprise that speculation in the vacant land market appears to be common.

There is evidence that investors, or speculators, are snapping up blocks of rural fringe land at an increasing rate, partly encouraged by the Future Urban zoning that exists beyond the urban limit of the Super City to the north, west and south.

The zone applies to land that will be urbanised within the next 30 years. In the interim, it enables rural uses and activities to continue.

In the south, the Future Urban zone includes land on the western side of Papakura from Hingaia to Drury, areas to the east of Takanini and around the Pukekohe Township and the Wesley Block near Parata. In Manukau it includes a small remaining amount of bare land in Flat Bush, Weymouth and Beachlands.

To the north, there's land at Silverdale, Millwater and west of Orewa near Wilks Rd on State Highway 17.

And in the northwest of Auckland it includes areas in Hobsonville, Whenuapai, on the western side of Don Buck Rd, Massey, Westgate, Kumeu and Huapai.

Much of the land in this zone has been identified as Future Urban for some time under existing district plans. However, some has been zoned more recently under the proposed Auckland Unitary Plan as more green field land is identified as required for future housing.

The buying up of this rural block land by those wanting to land bank it for future potential for subdivision is creating concern among some communities -- particularly where land was previously used productively by growers or farmers -- but also because owners are often absent and not contributing to the community.

There's been an upsurge of those buying for the purpose of land banking and future investment over the past 12 to 18 months in Auckland's northwest suburbs of Don Buck Rd, Massey, Kumeu, Huapai and Whenuapai as the Westgate shopping development increases interest in the area.

QV figures show land in the areas zoned Future Urban is typically selling at between 20 and 30 per cent above last year's CVs.

However, it could be 30 years before some of this land can be used for housing and investors hoping for easy gains may find values change once Auckland Council releases guidelines next month indicating which land is likely to be able to be developed and when.

The new guidelines will divide the Future Urban zone into three development timeframes. These will indicate if the land is likely to be developed in the next decade, 10 to 20 years, or not for at least 20 to 30 years.