Speech from the throne pledges that Auckland's urban limit will be removed and density controls will be freed up in this term of Government

By David Hargreaves

It's official: The Government is promising to remove Auckland's urban growth boundary as part of the legislative programme for this term.

In addition the Government's pledging to free-up density controls in Auckland.

Other housing and migration related initiatives officially confirmed as planned in this term of Government include:

  • cutting down on low quality international education courses,
  • stopping state house sell-offs,
  • creation of a rent-to-buy scheme,
  • creation of a 4,000-strong apprentice programme to help with the 'Kiwibuild' plan,
  • extension of the Bright Line test to five years,
  • the removal of the ability for housing investors to use tax losses on rental properties to offset against other income,
  • the creation of a 'comprehensive' register of foreign-owned land and houses and
  • strengthening of the Overseas Investment Act.

New Housing Minister Phil Twyford had made general reference to Auckland's rural-urban boundary in a TV interview last weekend, but it wasn't couched as a firm promise.

However, Governor General Patsy Reddy, in delivering the speech from the throne outlining the Government's legislative programme on Wednesday was explicit, though brief.

"This government will remove the Auckland urban growth boundary and free up density controls," she said.

There was no other detail given at this stage as to when and how this would be done.

The speech from the throne outlined a wide ranging and ambitious programme of initiatives, including as expected, much on immigration and housing.

Dame Patsy said new developments, both in Auckland and the rest of New Zealand, would be able to be funded through innovative new financing methods like infrastructure bonds. The government would also give Auckland Council the ability to implement a regional fuel tax.

"To help ease pressures on our housing, infrastructure and public services, this government will make sure we get our immigration settings right," she said. 

"It will cut down on low quality international education courses and will ensure work visas issued reflect genuine skill shortages.

"Housing is a top priority for this government. Action will be taken to address homelessness. State house sell offs will stop. And the State will take the lead in building affordable houses.  

"Through its Kiwibuild programme, this government pledges to build 100,000 high quality, affordable homes over the next 10 years; half of them in Auckland.

"A Housing Commission will work with the private sector, councils and iwi to cut through red tape, undertake major projects and ensure new, affordable homes are built rapidly.

"This work will begin immediately, as part of this government’s 100 Day Plan.

"To boost the workforce, employers will be financially supported to train 4000 young people as apprentices, including on-the-job construction training.

"High demand for housing will be dealt with by cracking down on speculators who are pushing prices out of reach of first home buyers.

"Foreign speculators will be banned from buying existing New Zealand homes.

"A comprehensive register of foreign-owned land and housing will be created, and the Overseas Investment Act will be strengthened.

"The ‘bright line test’ will be extended, so income tax is paid on any gains from the sale of residential property bought and sold within five years.

"Speculators will also no longer be able to use tax losses on rental properties to offset tax on other income.

"This government will make life better for renters. A ‘Rent to Own’ scheme will be developed.

"All rental properties will be required to meet standards for insulation, heating and drainage. Funding for home insulation in general will be boosted and a Winter Energy payment will be introduced for superannuitants and those receiving main benefits.

"This government aims to ensure that every New Zealander has access to a warm, dry, safe home," Dame Patsy said.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

137 Comments

all good stuff. Although I thouhht, generally, the Unitary Plan had already massively freed up density controls....

Not really - a lot of the central (affluent) suburbs are still highly controlled.

but probably a good 70% of urban Auckland has been upzoned for greater density
surely we want to protect some of the heritage areas?

Is there really a point, though? We're a global city, as the saying goes.

Does Manhattan really need standalone houses close to Wall Street?

Auckland’s housing costs are dumb. It is ridiculous that houses cost so much in Auckland -which at the end of day is only a moderate sized city by international standards. The biggest city in the world -Tokyo -a family home can be bought for half the price of Auckland. So the current situation is unacceptable. The government campaigned on changing it. Change of some sort is coming because the credibility of the government depends on it.

The Unitary Plan was an incremental improvement. But Auckland still has not built enough houses -there is an estimated shortfall of 45,000 houses. The Unitary plan has been inadequate. It hasn’t produced enough affordable houses to accommodate the people coming to Auckland. What is being built is not only inadequate in number, what is being built are expensive McMansions on expensive small parcels of land.

What NZ needs is a radical change so it can build more affordable houses.

Many cities around the world have better housing and better transport systems than Auckland’s. There are a number of different urban development models Auckland could choose to follow to build its way to affordable housing. Check them out. http://www.sightline.org/2017/09/21/yes-you-can-build-your-way-to-afford...

I quite like the Montreal Model -to achieve that the Unitary Plan will need to be changed. Land prices will have to come down so Auckland can build up or out.

It isn't a fair comparison to evaluate the average Tokyo abode to the average Auckland home. I recommend that you instead compare equal house and land size equivalent between Japan and Auckland. It may be that the average family abode is half the price of the average home in Auckland. I'd be surprised if the Japanese average abode has 50% of the sq m of the average Auckland home, and likely a far smaller lot size (many are apartments so zero land). The Japan housing model is quite different from the NZ model. One needs to visit Japan and go to a few homes in order to understand just how different it is than here.

The average Tokyo resident has 32sqm of residential space. So a family of four would have a 128 sqm residence. That doesn't seem too bad especially because that will not include garaging -which we typically count as part of the floorspace of a house in NZ. Of course Tokyo uses residential land much more efficiently -as you say their plot sizes will be small. I have lots more information about Tokyo, housing and transport on this website https://medium.com/land-buildings-identity-and-values
P.S I think Montreal might be the better model for NZ/Auckland to look at.

Montreal ? Like there’s been housing price escalation there
I don’t know their model though Brendon

The Montreal model is about removing zoning restrictions on traditional stand alone housing suburbs so that missing middle housing types can be built -duplexes, small walk up apartments, townhouses rather than high rise apartments (Vancouver) or suburban sprawl (Houston). The advantage is the new housing units are cheaper to build due to less structural engineering requirements, no elevators, sprinkler systems etc. Possibly the land costs are cheaper in comparison to allowing only a few high rise apartments around a few high amenity locations -because their is more up-zoned land-so more competition.

In the above link from sightline about different cities building there way to affordability they have a few paragraphs on Montreal.

There is also a link here http://urbankchoze.blogspot.co.nz/2015/04/why-is-montreal-so-much-more-a...

Vancouver is just like Toronto full of sky rise apartments built speculatively
A city like Halifax say has all forms of apartment types many low rise ones as well as multi storey
The Montreal model seems to me what the new plan was for Auckland but maybe that’s now changed

And what area are u in Fritz?

He is in Remmers ^^

yes, but renting.
Plenty of Remmers is zoned for high density, btw

Too many mobility scooters in Remmers.. footpath not wide enough for them!

up
10

Pleased to see resetting immigration controls. Good to know there are controls but what matters is elimating rorts and corruption.

Fritz I think the Auckland Unitary Plan was tinkering when what was needed was major reform. The Labour led government campaigned on major reform to deliver better more affordable housing. They needed to deliver and this speech from the throne shows they very much intend on doing that.

A less restrictive planning environment creates a superabundance of housing supply options. The housing supply curve becomes more elastic. Landowners with developable land have less monopolistic pricing power and the result is that urban land prices are lower than they would be in a more restrictive planning environment.

More houses and more types of houses are built in places where there is demand. House and urban land prices are more stable. Over time booms and busts are less of an issue.

Construction companies have the confidence to invest in capital and labour to raise productivity. Over time the quality and price (full or rental) of housing in relation to incomes improves.

Most of the people commenting on the Stuff article about how to get a prefabrication housing industry working in NZ understood the importance of addressing the land price issue.
https://www.stuff.co.nz/business/property/98442811/Fixing-New-Zealand-ho...

For the Labour led government the success or failure of Kiwibuild will depend on;

A. Getting a competitive number of companies investing in economies of scale prefabrication production.
B. Not pricing themselves out of the urban land supply market with its commitment to increase the number of new houses being built by 100,000 over 10 years.

Even though the Unitary Plan could have been better, it definitely wasn't 'tinkering'. It was a very, very bold change.
As an Urban Planner I can't think of many, if any, other cities in the world that have made such a bold change. Usually change is incremental, at best.
The problem wasn't really what it constituted (noting it could be better). It was that it's timing was 10 years too late. I was pretty much advocating for something similar to the Unitary Plan in 2005.

The Auckland UP is to spread Auckland out from Warkworth to Pukekohe with continual inter-suburban discontinuity. It is very bold, definitely not tinkering. Auckland is planned to create lots of discontinuity inside a very spread out city. No one else in the world does this by design, in fact the world practice is to avoid discontinuity wherever possible.

Only Auckland City is "bold" enough to look at flat, easily accessible land directly adjacent to existing transportation infrastructure and then decide to build 40 km away on a hill instead.

As a Pukekohe resident the first priority for spreading is to ensure that there is more than adequate infrastructure in place before any building. There isn't. Those in the Karaka to South Pukekohe area only have one way to get onto the Southern Motorway, let alone all those South of Drury including Pokeno, Tuakau, and the rest of NZ coming from the South travelling North. AC and NZTA seem to have no comprehension of just how many new subdivisions have gone in outside the SHA numbers. The growth has been phenomenal in the past two years. Relying on public transport (bus) for a rural area is ludicrous. Doesn't
exist outside the two towns. Relying on trains is equally ludicrous as they don't go where people work without taking hours and changing lines. Pukekohe trains do not even get passengers to Manukau Tech. The trains are unsafe at times of the day and they are reducing the Managers on the trains? The new train station in Pukekohe has parking for 81 cars - seriously! One extra lane on the Southern Motorway is not enough and still only two lanes each way travelling South of Papakura. Meanwhile we pay for Waterfront Development, pink cycle lanes, regional fuel tax? even those who avoid going into Auckland. It is just an unholy mess and rather than pushing more out here - fund the infrastructure to cope first.

DiDi DiDi DiDi you worry worry worry
No infrastructure required for expansion
National proved you can jamb in tens of thousands every year and everything runs just fine
You don’t even need a rapid transit system
You worrier DiDi

Will the Ardern government remove the Rural Urban Boundary with a National Policy Statement (NPS) amendment to the RMA? This is what National did with its National Policy Statement on Urban Development Capacity.

If they do then Ardern/Twyford need to consider what NPS amendments they could enact to remove restrictions on our cities building up.

For instance there could be a NPS forbidding car parking minimums. According Donald Shoup up to 30% of US cities is carparking. https://www.youtube.com/watch?time_continue=1&v=Akm7ik-H_7U Why should city land be hugely expensive for housing but free for carparking?

What about removing all viewshaft restrictions? Why should one land owners view be more important than another landowners right to build more residential space? Especially when that residential space could be affordable housing for those who can’t access it.

What is wrong with 3 story residential dwellings? Shouldn’t that be an as of right dwelling option. Auckland has something like 500,000 residential houses, mostly 1-2 stories high. If they were allowed to build up one more floor -that would be a huge increase in potential supply.

What if heritage heritage restrictions were a limited allocation by NPS -so only the best examples were given this designation -say a maximum of 1% of a cities housing stock -about 5,000 houses in Auckland.

My personal favourite mechanism for allowing Auckland and NZ's other cities to build up is to allow neighbours to negotiate their own agreements on what common intensification rights between the neighbouring plots is allowed or not. I think it would end up supporting more perimeter type block developments, for instance. https://www.greaterauckland.org.nz/2017/08/29/legalising-perimeter-block...

If the barriers were removed for people to build small scale rental investments then this development option would become more standard -the process would be streamlined -excessive costs would be competed away.
Auckland could end up looking more like this https://www.stuff.co.nz/life-style/homed/houses/97955125/grand-designs-c...

Architect and Grand Designs guru Chris Moller was impressed with the ambitious approach. He calls it "urban farming" and believes the pair are pioneering a new way of living that is just as "scary", financially, as breaking in the land for farming would have been for New Zealand's early settlers.

Auckland view corridors and what make it such a beautiful city to walk around in. You basically outlined how to build a slum. We arnt persistently in top 10 most livable cities because we are just to cheery, its because Auckland is a gorgeous place to be.

BS re this will create slums -plenty of places allow lots of building within their cities and they are prosperous and lively. Laminar you say that Auckland is a gorgeous place but for whom -everyone? is it inclusive? Or is it gorgeous for a lucky few with property wealth, while being crap for everyone else?

The function of cities, the reason they attract people is they provide - as many contacts and connections between people as possible -it is this agglomeration effect which makes cities the place where people go for education, health, shopping and entertainment, places to find a partners, business and employment opportunities.....

In the past the agglomeration of people into cities was threatened by contagious deadly diseases. It took policymakers generations to provide the necessary clean water, sewerage treatment and building codes to make cities healthy places where people could benefit from the large agglomeration of peoples.

Now the challenge to agglomeration is gridlocked streets and unaffordable housing.

The problem with Auckland urban development model is it is based on 1950s thinking of traditional suburbia connected to the rest of city via motorways and automobiles. This model is busted in Auckland -it has reached the end of the road.

We need to find a new way to build affordable housing. It will involve a combination of greater freedom to build a variety of housing types within our cities -this market will naturally gravitate to locations where transport is not 100% dependent on gridlocked automobiles. And freedom to build out -also I believe in places where there is multiple transport options to access the city i.e the roads + congestion free rapid transit services.

Laminar
A gorgeous place destroyed by incompetence

up
11

Great stuff. It removes the totally artificial jacking up of the land scarcity and prices. They need to also find additional ways to attack the strangling of supply and profiteering of the land bankers.

up
10

Land Tax.
It's exactly what the Tax Working Group will advise for the third time.
I hardly think it will come to fruition, though.

Still two many property investors around for that to get through, likely. Even if mixed with dropping of income / business taxes.

Just saw a nice lake house today
It’s yearly property tax was just over $8600
House was assessed around 740K
Imagine Aucklanders paying really big property taxes
Imagine aaffordable mass rapid transit and unclogged roads
It can be achieved
Instead in Auckland all the profits from rising property evaporated into Aussie Banks & Foreigners untaxed capital gains
and of course local “ investors” really speculators pockets

up
13

If they free up enough land the people most likely to hit negative equity will be the land bankers, should be fun to watch.

Exactly
How can a section in damp Albany cost 400 to 600K ?
I think the Chinese have been conned and judging by the spruikers comments here not just the Chinese

May be the answer to this is that the government just takes over a lot of land development. Where it makes sense buy farmland and use the public works act as necessary on the basis that it is necessary to address a crisis. Letting tenders for the civil works falls easily within the scope of Transit's abilities who have a very good record of getting this sort of stuff done at minimum price. The reality is that with raw farmland prices and hard nosed project management they should be able to churn out sections well less than $100k. House building can then be franchised under bulk pricing deals so all up the government should be able to deliver lower priced homes and still turn a profit of well over $100k each. If they are building 10,000 houses per year that equates to an annual profit of over $1 billion per year which will go a long way to cover the other infrastructural costs that they face.

up
11

Great to see the government doing something! which is a vast difference to the armchair approach from National.

All these measures together will help affordability, reduce demand, increase supply and hopefully get a lot of people sleeping in houses instead of cars

And when we’ve totally obliterated the scarce market-garden compatible soils we have in this country, we’ll just import our veggies along with our used cars, builders and bus drivers.

Absolutely and if you (or anyone else) are genuinely concerned I strongly suggest you email Phil Twyford at phil.twyford@parliament.govt.nz because he has in the past expressed the desire to protect Pukekohe soils. I think he might need his feet held to the fire over this, as he is now saying this will be "up to the community". Yes, I have been in contact with him.

Land all over the place now? Residential property land might just drop to the price of agricultural land - where ever it is. It becomes a case of best-use, as it should be....

Except that, unchecked, it will be left to self interest and good food providing land will be concreted over. If it is I think a fund raiser for a monument to human stupidity would be appropriate

There is a distinction between agricultural land and horticultural land that few New Zealanders (and even fewer politicians) are aware of.

Agricultural land ?
The Netherlands has the answer
Hyper agricultural productivity all under 36 Sq miles of glass houses
Look up Nat Geo Magazine
Go check out how many tons of tomatoes they grow
A world leader in agriculture

PocketAces,

I have done that just now. I don't live in Auckland,but I think it would be a tragedy if most of that productive land was lost to yet more urban sprawl.

Thanks

The current RUB-based plan is quadruple the size of Pukekohe. If you support the RUB, you support the obliteration of market gardening.

The only land the RUB protects is lifestyle blocks, where people farm ponies and alpacas. Removing the RUB will protect market gardening, not hurt it.

This comment stream would be more productive for everyone if we stick to facts. Spraying fake news and misinformation around adds nothing.

Yoda - Well they will certainly be cheaper.

Saw this overseas when we were paying $10/kg for tomatoes in July.

http://indianexpress.com/article/explained/seeing-red-why-is-tomato-on-f...

Indians were screaming blue murder at high tomato prices that had quadrupled in places to the equivalent of $1.50 NZ /kg. Indians were stuffing them in hidey holes with armed guards.

And before you say they were probably full of herbicides and pesticide see this..

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10661868

http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=108...

You will find on the MPI site that endosulphan is no longer banned - they had until 2015 from 2010 to get rid of it but under National, they know better. This is a real concern for women. Endosulphan raises estrogen. You will discover incredibly high rates of Breast Cancer in vegetable and tree crop areas. I hope that the new Government will look carefully into the "safe" levels of pesticides and fungicides for health reason. I accept growers etc can't mass produce without chemicals BUT what are they using and how safe is it when there could be alternatives. Mind that also goes to our
two major Supermarket chains who screw down their purchase prices while stinging the consumer.

DP

A know a reasonable amount about biocide use in New Zealand, so I'm acutely aware that we are far from clean and green in this country. (Not that I use the Herald as a source when I'm seeking information or knowledge.) There is, of course, more to this situation than the cost of food. But I wouldn't want to see future generations of New Zealanders living in a country where they are dependent on much larger nations for their food supply. If that scenario either does develop, then they will see how much tomatoes can cost.

If we want to stop the urban spread then we have to stop the pressure from increasing population. Overwhelmingly this comes from immigration. If the past 9 years has proven anything, it is that we cannot increase the population without increasing the amount of land given over to residential real estate. We have to chose what we want. ever increasing population and ever diminishing rural land, or the converse. There is no evidence that we have/can successfully achieved otherwise

2% growth doesn't sound too much until you map it over a lifetime (say 80 years) and apply compound growth.

up
11

"the removal of the ability for housing investors to use tax losses on rental properties to offset against other income"
So pretty much the removal of Negative Gearing. Sure there'll be in-product deductions, but against PAYE - that's a big one!

up
12

Agree this will be humongous.

With capital gains as a minimum stalled/declining back to NZ tax paid income levels, stronger tenancy rights, insulation and minimum condition standards, and urban boundary being opened up freeing up land at lower prices, many small time specuvestors will be wondering what the hell they are participating in the debt stacking ponzi for.

Just like the perfect artificial storm of the last 10 years created positive leverage, a new perfect storm is forming, but not a positive one for the debt stacking ponzi. Especially if these changes are all in the first 100 days.

Once we have a register of foreign owned land, will we be required to share that with our trading partners? Imagine the potential for please explains in China....

I like this one too :D. Some over leveraged negative geared investor will be shaking in his boots now. ^^. Time to sell the car and kids now maybe??? XD XD XD

Hopefully they will prevent Phil Goff from carrying out his plans to quadruple the size of Kumeu, Orewa, Pukekohe, etc. at ratepayers expense. The Phil Goff council is spending money on expensive plans for wide sprawl - which means post-RUB people trying to develop closer, less costly, more environmentally friendly suburbs will be handicapped.

So? That's their, and anyone else's, choice? If you want to develop in town, go for it! But if it's more cost effective to 'go out'......same applies....

The current AUP is to have ratepayers pay for developing land NW of Kumeu, whilst have the RUB blocking development in the area SE of Kumeu. If we merely remove the RUB Phil Goff will continue to spend $billions(?) developing land NW of Kumeu, but developers SE of Kumeu could need to raise infrastructure bonds to pay for the development. Cumulatively Auckland could easily be in a worse financial situation.

It becoming cost effective to go further out simply because the council plans pay subsidies for that will waste ratepayers money. Development should all be competing on equal footing.

All our properties are more than up to the required standards!
Why is that just rental properties need the full insulation and owner occupied don’t?????????
Rent to own?
Wonder who is going to qualify for this?
Are the unemployed beneficiaries in State housing going to be able to rent to buy on the taxpayer, while the average working person needs to look after themselves?
This government I appreciate are trying to do things but most of the time their ideas are going to come a gustser!!!

When you offer a home for rent, you expose another family to the conditions of that rental. When you fail to maintain or upgrade your own home, you are the ones that suffer. You don't see the difference? Owner occupiers upgrade to improve their own living conditions, rental owners only upgrade if there is a business case or they are required to.

mfd, be fair. Some landlords ie. slumlords only upgrade when required to by law, there are plenty of good landlords, just as there are plenty of good tenants that look after houses and pay rent on time. And when you get a combnation of good landlord and good tenant everyone is happy.

Ok, I'll concede that. However, laws are always aimed at those who don't naturally do the right thing, and good landlords who want all tenants to have decent living conditions should welcome others being dragged up to their standard.

Good man. It is amusing to watch TM2 rant, but i do agree with him on the rent to own thing, who is footing the bill for this? I imagine that yet again myself and my partner will fall into the gap, having failed to produce the required three rugrats to get WFF and accomodation supplements and now we are both on okay incomes we wont qualify for the rent to own scheme. If it wasn't for her family I would be thinking about heading somewhere rural, and dodging as much tax as possible in whatever way I can while waiting for the housing market to implode.

Cos your operating a business TM2. Under the new HnS legislation as a director/owner you have to consider health outcomes off your staff/tenants and will, to a greater degree than before, be liable for any negative impact you are deemed to have created. Wait till tenants start successfully claiming for poor health caused by poor housing standards...

One does wonder if this will stretch to parents responsibility for their children, but based on the lack of personal responsibility in the family unit (rotten teeth being the most recent example) that seems to happen i doubt this will be pursued quite the same way.

Unless developers are required to pay the true cost of providing infrastructure to new developments all removing the RUB will do is increase the subsidy that Aucklanders currently pay to support urban sprawl by requiring out of cycle and out of order infrastructure development...

Yep removing the RUB, will require the removal of subsidies for sprawl currently planned by Auckland Council.

Do you know what happens when developers "Pay for infrastructure" via development contributions? And then go to sell the house?

Do you think they might add those costs on?

So do you think these charges make sense?

Developers generally pay some/most way towards the cost of infrastructure within their subdivision, but often not for the extensions to trunk infrastructure required to service these networks. These costs should be passed onto the buyer as the true cost of the property, rather than subsidised by existing ratepayers (do you really want to pay higher rates to support artificially cheaper housing on the periphery of the city?)

exactly. Its the upgrade to the existing miles & miles of (eg) sewer pipes already at capacity which isnt factored in to these new add-ons on the fringes.

And what about when a big new apartment development gets put up in the city?

The sewer pipes, electrical, telecomms etc. all have to be upgraded. Under existing infrastructure.

That is actually way more expensive than a greenfield development.

Check out the Productivity Commission report on Better Urban Planning - this suggests greenfield development costing on average 50% more for infrastructure than brownfield.

If the greenfield development is non-contiguous with existing development I can only see these costs being even higher (and if standalone infrastructure is considered - much more complicated!).

There are plenty of stand alone systems overseas for sewerage and stormwater drainage. Some of them with very high environmental merit. Water can be tricky to access -depending on the location -probably in Auckland WaterCare has to be dealt with. Although it is possible an eco-village with careful planning could be self-sufficient.

The land cost savings on non-contiguous growth can be considerable -being able to bypass landbankers is essential -at the bare minimum developers/builders should have the option to bypass landbankers until they price more reasonably.

Not just developers either
Land transfer tax on all property say around 1.5% and say around 1.25% property tax based on a assessed value
This is how it’s done but not in Auckland
Hence more migrants won’t cure the massive debt the Super City is burdened with
It’s not purely council extravagance or bloated salaries It’s a fundamental lack of a true and just property tax system

That would just crush owners of multiple properties which is what you want I guess. Madness to bring that in at this stage.

Zach you must get out more
The taxes I describe are what we pay here
Big cities require income and Aucklands exclusive suburbs have never paid their fair burden rates wise
You’re living in a fools paradise The city of Auckland is massively indebted with limited means to reduce debt levels
It’s not a question of what I want as you put it either.

You can't just bring in a massive tax without a historical local precedent. It's all well and dandy for you, made your money and buggered off to New York. Such a tax would cause an epic house price crash and impoverish people. It would be madness. They're not going to bring in a capital gains tax so they are hardly likely to do something even more drastic.
I'm kind of open to discussing a stamp duty. Maybe 1% with a corresponding drop in REA fees - that sounds fair and reasonable.

I'm not convinced getting rid of the RUB will do much. I see it more as symbolic. Most of the land beyond the RUB is too remote or too fragmented or too steep to be promising for anything more than bitsy development.
Even without the RUB, there is still scarcity of good land because of these physical factors

That's been my thought as well but I'm glad they are going to do away with it - as at least it will remove the controversy surrounding it and the opponents will get the chance to see if it makes the difference they have been suggesting it will with respect to lowering overall land prices.

yeah, true I guess. Will be a good experiment to see what impact it might have (as I say I am skeptical) . Can always be brought back in the future

No one here is able to know how Auckland may develop over coming decades. The rate of change in science and technology is becoming ever more rapid; indeed so fast and probably in so many unexpected ways that our current planning laws are quite possibly a hindrance if not a total waste of time. I very much doubt that permitting cities to evolve, repeat evolve, due to citizen needs, will provide worse examples than centralised planning. efforts.

Yip we do.
Cities suck copious amounts of energy.
Cheap energy is kaput.
So called infrastructure reliant on cheap energy will soon resemble Greece's Olympic stadium venues.
https://www.theguardian.com/sport/gallery/2014/aug/13/abandoned-athens-o...
welcome to Auckland 2025

not that you will believe me.
Heres a taste of the rapid progress youre talking about ...
https://news.stanford.edu/news/2013/april/pv-net-energy-040213.html
"For the first time since the boom started, the electricity generated by all of the world's installed solar photovoltaic (PV) panels last year probably surpassed the amount of energy going into fabricating more modules....."Despite its fantastically fast growth rate, PV is producing – or just about to start producing – a net energy benefit to society.""
Note - theres a PROBABLY in there

"not that you will believe me." O ye of little faith!

well its a not a pleasant reality. Everyone wants to believe there's more where "that" came from...
https://srsroccoreport.com/wp-content/uploads/2017/04/Global-Oil-Consump...

How does that compare to other methods of generation? That's key.

This source says the following:

The aim was to study the Energy Return on Investment (EROI) for the Fljotsdalsstod hydroelectric power plant (690 MW) using real data and a previously proposed standard. Energy return on investment is the ratio between the output and input energy. In this study we calculate the EROI within three defined boundaries, which include different parameters. Results show that over the 100-year lifetime, the plant is expected to deliver an EROI of approximately 110. The largest energy-consuming factor was the own usage, followed by the indirect energy used in the production of the construction materials.

Its certainly possible for a localised small grid to produce electricity - there may even be an energy payback! (assuming its built) The problem though is far more than electricity. Electricity is only part of the picture. Everyone's work & infrastructure rely on the surplus kicked out by fossil fuels. eg what would be the first thing you need to do when there is any equipment/ maintenance problem in this grid?Answer - get a replacement part ... a part assumed to be there courtesy of industry & supply chains (powered by fossil fuels). The dependency is total.

Of course - but surely that drives the case to burn less fossil fuel in direct energy generation and save it for fabrication, supply chain etc., right?

I'm not against expanding Auckland - and some urban sprawl. There's little alternative if Auckland's going to house the projected population increase of another 1,000,000 people within the next 25 years.

I don't regard more inner-city high-rise/apartments as a good option, as it only wrecks the character of the city. Quality of life is really important!

But there's still going to be pressure on the transport infrastructure. And houses in the inner-city suburbs will continue to be very sought-after - and way out of reach for people like me.

TTP

It's completely back to front to have the high rises away from the city centre, so you nimbys should probably just move over and suck it up so that we do not have to concrete over the food basket.

To the point don’t despair
The trend is down for Auckland property and I’m sure there will be many opportunities ahead for buyers
Aucklands great but not that great & I was born there so I know it exceedingly well
Once it has a mass rapid transit system call me

Why would we use a 'mass rapid transit system' when we have company cars?
(ZS's 'let them eat cake' moment)

We really do need to keep a close watch our local body politicians. They can't necessarily be trusted to act in the best interest of the communities they are supposed to serve.

There's been an appalling case of a cycleway built in the southern Wellington suburb of Island Bay - which used to have a beautiful tree-lined avenue called "The Parade". The Parade was destroyed a couple years ago by a new cycleway. It now looks a shocker visually (with cars parked halfway out in the middle the road) and, worse still, it's unsafe for all road users and pedestrians. An awful, unsightly clutter that plenty of local people actively avoid in their daily commuting. Glad I don't live there!

The new Wellington mayor (Justin Lester) has offered a half-hearted compromise - that the Island Bay community has fairly and squarely rejected. (He's rapidly starting to lose favour.)

Understandably, the good people of Island Bay want the character and beauty of "The Parade" to be restored. They're a strong, cohesive community - and certainly didn't deserve to be ratted on by their elected representatives.

The whole Island Bay cycleway saga has been a protracted and expensive fiasco - a huge waste of time and money - brought about by incompetent local body politicians.

The so called fiasco is due to those who insist on using cars, the impact of a cyclist and their needs is infantisamil in comparison. Attitude reset required.

Those who insist on using cars usually cannot walk & transport goods and services which require a larger load requirement, like say ambulances, trademen, elderly & disabled etc etc. Cyclists are too lazy to even walk when they are able to.

Pacifica. That is a load of codswallop. It is not anywhere near your usually better inputs.

I've seen many a cyclist ride on pedestrian crossings so Pacifica may have a point.

The impact of a single cyclist can reduce the flow of traffic on a busy two lane road by 50% easily.

If they only ever travelled in packs and managed to maintain a fair speed you might have a point, but put a single cyclist on a two lane each way road without adequate extra width and for the time they are travelling along that stretch of road you may as well close off the second lane as every car that approaches them has to shift over to the adjacent lane to give them room.

"We really do need to keep a close watch our local body politicians. They can't necessarily be trusted to act in the best interest of the communities they are supposed to serve." Rather like national have performed over the last nine years.

I generally agree with permitting higher density housing. Particularly if it we can build to the outside edges of sections. However it is clear the dreamers have never built multi story properties of their own. The costs per square m go up rapidly and the achievable rents go down as you go up. Why are they restricting the planning changes to Auckland? Is Auckland the only area of NZ they think they understand.

All looks to be a sensible plan from Labour, they certainly seem to be sticking to their campagin policies which is excellent.

This news seems to be sinking in with those Speculative Investors/ Landlords. Not sure how much people have noticed but the amount of listings on TradeMe for Auckland looks to be sky rocketing. We're now up to 11,375 properties.

Hi CJ099,

House listings were destined to surge about this time - due to post-election and onset of summer.

TTP (at your service)

Indeed, we have to go further back than a few months for any meaningful comparison, and spikes due to short term impetus which may require quick actions usually can be spotted rather quickly as having a different profile (like spending rush prior to a limitation coming in force), which does not seem evident now.

Well even at the end of the previous month of October TradeMe's listings for Auckland were 10,630. Now they're spiked in only a few short weeks to; 11,375.

That's quite a big increase considering that even six months prior to the election listings for Auckland sat around the 10,800 property listings level.

So yes Labour's policies are having the desired effect on Speculative Investors in getting then to sell up.

Hi CJ099,

That's a 7.0% increase - which is no more than a bit of a spike.

Spikes like this are common with real estate listings. Nothing dramatic.

TTP (at your service)

Yeah really, where's your evidence of that TTP? At least I'm able supply the facts and figures (See my previous comments) What do you have to support your comments apart from nothing?

As above, CJ099.

I've just carried out a simple percentage calculation based on the "facts and figures" that you supplied.

Surely there's nothing wrong with adding that to the discussion??

TTP

It's still a big surge in Auckland's property listings in a very short space of time. Add to the mix that properties aren't selling that well with low auction results = house prices continuing to fall at and accelerated pace.

Hi CJ099,

You still sound a bit anxious.

House prices aren't everything. Fishing, gardening, dancing, hiking are all good things to spend time doing.

Have a look around at the options: a balanced life has a lot to recommend it.

Look after yourself.

You have a point!

LOL Why would I be anxious TTP? It's those paper millionaires and RE's like you that should be anxious, with Auckland property listing piling up, increasing 100 properties each day. Take a look; TradeMe's Auckland listings have risen yet again 11,375 yesterday to 11480 listings today. Enough evidence of a declining market there alone! :)

Best not to get too carried away by the rise. We have 2007/8 data and todays levels are not anything like then.

Here is some perspective:

https://www.interest.co.nz/images/residential-property-listings.jpg

David, is there data available broken down by region? It is plausible that there is a lot less houses for sale in the regions whilst elevated in Auckland. After all, Aucklanders are reported cashing in equity and heading for the regions.

Thanks David,

Interesting to note the graph.

But not too many people here will thank you for posting it. (-;

TTP

Cheers, that's useful.

TTP, confidence in future house price gains are falling - and no, this is not fake news! This contagion of drifting prices will infect all areas - even yours and mine: https://www.stuff.co.nz/business/98673517/asb-survey-shows-new-zealander...

"Auckland's expectations are even lower, at 9 per cent expecting increases." And one does wonder how many of this 9% are evil property spruikers.

Hi Retired-Poppy,

I read that too.

Confidence is at a 6-year low - which takes us back to late-2011.

But, the reality is that since 2011 house prices have risen quite a bit.......

So one shouldn't read too much into opinion surveys. Definitely, care needs to be exercised in interpreting them. They are completely different from indices of actual house price movements.

TTP (at your service)

While I agree with your comment, you do forget the power of sentiment in market places, like the greed and fear index commonly used.
What this indicates is a sharp change in sentiment that ultimately will show in actual data

I've been following the Wellington market over the last six months, and there has definitely been a considerable rise in the number of properties not sold, going back on the market as sale by negotiation. IMHO, there exists a gap between what sellers want, and what FHBs are prepared to pay, now all the money slingers have bought up and settled in, the cautious buyers remain and will not sign the dotted line without very careful consideration as to what the future could hold.

pin2cone
I've been watching the Wellington market for 18 months and I would agree with your summary exactly. 18 months ago, everything was sale by tender. I have friends who tried to buy then and they were disappointed time after time, talked down to by RE agents, lied to, manipulated, snubbed. Now those same RE agents are ringing all chummy chummy. And houses are not selling and i'm seeing several being relisted. Many more listings are by negotiation or offers in excess of, and the prices are much more reasonable. 18 months ago, there were no suggested prices at all.

ASB just released their latest market confidence survey results today - I take it with a grain of salt as I'm not sure who their sample base is made up of, but shows that confidence is most definitely declining (outside of Christchurch anyway).

https://www.asb.co.nz/documents/economic-research/housing-confidence.html

"So one shouldn't read too much into opinion surveys. Definitely, care needs to be exercised in interpreting them." If less than one in ten Aucklanders expect more capital gain at this early change in the housing cycle, then that surely tells us how future prices will go.

Hi Didge,

Things aren't that simple.

There are a host of intertwined factors that impinge on the housing market.

Jumping to conclusions based on consideration of only one type of variable/data is fraught.

TTP

TTP. You wish!

Hi Green_mamba,

For sure, sentiment can impact on turnover, prices etc - but the important thing to note is that relationships are seldom proportionate.......

For instance, a 50% increase in pessimism levels does not imply that prices (or turnover) are going to fall by 50%. (The converse is, of course, also true.)

With the NZ housing market, relatively large swings in sentiment are associated with relatively small movements in prices.

People often find this difficult to understand.

TTP

TTP, nice positive spin from either a Spin Doctor, Real Estate Agent or someone who sells any FHB into a life of debt driven misery. Seriously though, the best advice for FHB is to wait, watch and save as time is on their side - right?

Hi Retired-Poppy,

Just to be clear, I've never worked in real estate, or "PR" - or anything associated with either of them. Neither am I actively buying or selling property. Certainly, I've never been a speculator. (I'm risk-averse.)

I'm just an interested bystander - happily observing life's passing parade. I find the property market (and various other markets) interesting to follow.

But if I had a son/daughter who had just bought (or was about to buy) their first home then, undoubtedly, I'd be a very proud Dad.

I reckon they wouldn't be regretting the move in a few years time.

Also, houses aren't just about money/investment: they're also a consumption item linked to personal/family wellbeing. People here often seem to forget/ignore that.

TTP

TTP, for the record, do you believe based on your extensive "interest" that prices are about to continue rising and there is decent money to be made? Personally, FHB best to be patient and wait. Nothing has the potential to destroy families than debt, interest on debt and especially on an asset that is depreciating.

I regard property as a long-term investment - because it has a good record of providing good long-term security (in a broad sense).

If you buy property with that mindset, then you can ride out the ups and downs without too much concern.

If you want "decent money" in the short term (which has never been a particular goal of mine) then there all sorts of things you might explore. Maybe Bitcoin or Angora Goats or whatever the latest fad is might work for you - if you're inclined.

The property market has been soft for about a year now. Cycles have their ups and downs. An FHB (or any other home buyer) might do ok waiting a bit if they don't mind paying rent - but then again they might be better off buying now (especially if a house they really like is within their reach).

TTP

TTP, rent, especially when Spruikers present it at property seminars, has an unwarranted stigma attached. Today, renting now passes all the risk to the Landlord, especially now that conditions for the amatuer Landlord are turning toxic. Interest on debt is way worse than paying rent on a depreciating asset with rates, property insurance and maintenance attached. TTP, times have changed - QE is being unwound and monetary conditions are slowly tightening. Now, if the tenant is saving, their term deposit will gain buying value, it does not attract the expenses above. A few years ago, I suggested to my daughter she should wait, save and watch. Like others, I observed houses being bought without inspections and over the internet - the pinnacle of stupidity. It was just after the time my taxi driver boasted he had a portfolio of three rental properties. (before Uber came to town) Now the big shakeout begins. FHB, this is your time - a huge opportunity to gain for the stupid decisions of the past, the greedy will pay and the inevitable panic will begin. If you regard property to be a long term investment that's smart thinking but you must first wait for the fallout of those fools who invested for short term gains and this could take some years. If you buy now you will become the biggest fool.

"For sure, sentiment can impact on turnover, prices etc - but the important thing to note is that relationships are seldom proportionate......" Exactly. Greed can turn to utter fear and equity crashes often occur far in excess of the underlying fundamentals. Under National we were heading in a direction where a major property crash was certain. It is still an open guess whether the market can be stabilised without disaster. The bottom line is that any further upward movement will be disastrous. It is time for you spruikers to get with reality.

Yes totally agree with you Didge. National certainly have created a false economy, where we we're becoming to reliant on selling property to give a false sense of a thriving wealth.

Have just read the Reserve Bank's News Release for 9 November.

With regard to housing, it states:

"Low house price inflation is expected to continue, reinforced by new government policies on housing."

There's no mention of house prices falling - just slowly inflating.

A surprise to some, perhaps??

TTP

and he also said - the Reserve Bank had made preliminary assessments of the impact of the proposed KiwiBuild programme, tighter visa requirements and increases in the minimum wage.
"The impact of these policies remains very uncertain. TTP, reduced house price inflation are translating to falling house prices in our biggest city and its spreading. Look ahead and consider the impacts of the unwinding of QE, equity bubbles and alike. FHB, be patient - this is the biggest opportunity to gain from reckless lending activities of the past. As prices tank, more and more lending will be exposed as toxic. Bank initiatives such as Interest only payments and mortgage repayment holidays have merely delayed the time of reckoning - these ARE still non performing loans!

No government agency or statutory body is going to predict house drops, it's career suicide. Has that EVER happened before prices actually dropped??? NEVER NEVER NEVER!!!!!!! All forecasts will err on the conservative side as per. There could be people at the Reserve Bank who think there will be a 65% fall in prices and they would NEVER say so. They won't want to incite panic. Instead they will just gently hint and encourage people to be less exuberant. No body takes central banks literally, all the markets are looking for subtle hints and tones of suggestion!

I just personally, am not going to join the masses who have FOMO and end up with a mortgage x10 my salary for a family home. I can't fathom how that is ever a good idea. It's way too risky. I'm very happy in my rental and saving over half our income per month, living frugally and biding our time.

If I turned out to be wrong in a year, 18 months time, egg on my face. But for now, i'm playing the waiting game.

gingerninja, x2 - very well said!

@ off the point. "A surprise to some, perhaps??" Not at all. Government will be very scared of a major collapse especially in Auckland house prices and there is still movement of cashed up sellers moving out of Auckland to smaller centers where they get a much better house and a whole lot of extra cash. The downside for locals is an increasing dearth of rentals.

Rentals require someone else to pay. Full stop.

Rentals are a business. Full stop.

Houses require some one else to pay you. Full stop.

Businesses require someone else to pay. Full stop.

Money gets created out of thin air. Full stop.

Banks have to make a profit. Full stop.

Savers have had it bad for years. Full stop.

Overseas things are changing. Full stop.

World wide,Tide is going out and coming flooding up. Full stop.

Money changes Hands, Full Stop.

Petrol going up. Full stop.

Saudi changes Government and Rulers. Full stop.

China breaks. Full stop.

We brake. Full stop.

Snapchat IPO stupid. Full stop.

Snapchat users stupid. Full stop.

Snapchat buyers in debt. Full stop.

Debt, buys debt. Full stop.

Borrowed money is debt, when owed. Full stop.

Cash is King or Queen, in Caymans. Full stop.

Taxpayers always screwed. Full stop.

Panama Papers and Apple japers and Tax Avoidance capers... Illegal...Full stop.

Corruption still rife. Full stop.

Banks rip us off..Full stop.

Half NZ stupid. Full stop.

Other half crazy. Full stop.

All they talk about is Houses..Full stop.

Nuffin changes,. Full stop.

Get a life. Full stop.

Fantastic stuff by this new Government. Loving every policy so far the only one I don't like is the free Tertiary education. Id be ok with that if it was for final year students via a reimbursement upon graduation.

Free tertiary ed is a fine goal
The present system is a farce just like it is in US with no hope of ever seeing loans all repaid and a plethora of
extravagant courses like yoga and golf