By Bernard Hickey
Building and Housing Minister Nick Smith has announced negotiations have been completed on three parcels of Crown land in Auckland that gives the go-ahead to build 740 houses within 18 months to two years.
The deals are the next step in the Government's NZ$52.2 million announcement in Budget 2015 from May 21 last year to put aside capital to develop Crown-owned land for housing. However, the deals fall short of fall development agreements, which are not expected until later this year.
“The successful conclusions of negotiations on purchasing these three sites, with a capacity for 740 homes, is a significant step forward for the programme,” Smith said.
“These three sites, along with the Moire Road development announced last year, have a combined capacity for about 940 homes. Nearly all of the $52.2 million allocated to the programme in Budget 2015 has now been expended to buy these four sites, with the cost of the individual sites being commercially sensitive," he said.
The Government had said last year it had about 500 hectares of land with the potential for residential development.
The sites included:
A 1.85ha in Manukau Station Road site intended for 600 apartments, which the Government signed a deal with the Auckland Council for on Friday. Smith said a development agreement for the site would be signed later this year.
A 0.47ha site on New North Road in Mount Albert suitable for 60 townhouse apartments made up of nine parcels of land with mixed ownership by New Zealand Transport Agency (NZTA) and a private landowner. It is subject to a protocol with the Nga Mana Whenua o Tamaki Makaurau Limited Partnership and Ministry of Business, Innovation and Employment (MBIE) intended to invite the partnership to submit a development proposal in the next few week with the an aim to have an initial development agreement signed by August.
A 0.91ha site in Waterview suitable for 80 new homes which was previously administered by NZTA and leased to a boarding hostel. The agreement with NZTA for this Great North Road site has just settled. MBIE is in discussions with the boarding house over transitional arrangements for existing residents. This site is subject to the development protocol with the Limited Partnership and the intention is to invite them to submit a development proposal in June, with the aim of having an initial development agreement in place for the site by September.
“I expect the timeframe for delivering these homes to be similar to the successful programme in Christchurch involving three sites and 420 homes – about 18 months for the first homes to come on stream," he said.
"Multi-storey apartment buildings are more complex and likely to take two years to complete. The development agreements on each site will set out requirements for the pace of development, the provision of social housing and target house price points."
Smith said three of the four sites required Special Housing Area status to enable more homes to be built and at a greater pace.
"We are systematically tackling issues covering land supply, skills shortages, infrastructure provisions, financing for first-home buyers, taxation of investors, building material costs and emergency housing needs. We are achieving success, having lifted the house build rate in Auckland from 10 per working day to now over 40 per day, but we will need to continue to accelerate that pace to the 50-60 per day required to meet demand,” he said.
Dunne wants National Housing conference
UnitedFuture MP and Government supporter Peter Dunne has called for a National Housing Conference.
UnitedFuture leader Peter Dunne is calling for a National Housing Conference to develop real solutions to the country's housing problems.
He said a lasting solution would only come when central and local government, the home building industry, the banks (including the Reserve Bank), and the social housing sector worked together.
"Treating this as a political football will only take us so far. The conference would need to look at the ways we can increase supply of residential land, what the capacity of the building industry is, how we can most effectively utilise that capacity, in what ways the baking sector can develop viable financing packages, and what the role of central and local government needs to be," he said.
44 Comments
Can't believe the govt has just spent $52 million to sell off a couple blocks of land! 740 homes will do nothing and that makes it 70K per home.
Never before has a government spent so much to achieve so little. What happened to the 500ha providing for "thousands" of homes that we were supposed to get from this spend?
http://www.stuff.co.nz/life-style/home-property/68711802/Thousands-of-h…
From above sounds like they spent $52M buying these sites. So your figure of $70K per unit is what they paid per unit for land. This is more than a private developer would pay for unit sites in higher value areas, which is what's expected as the government always spends a huge amount more developing buildings than private developer do for the same building.
No, these sites are already government land. Sounds like $52M is how much the government has spent selling the land to private developers. Or is this how much the government has spent buying the land from other government departments for on sale? Very unclear exactly what the fund has been spent on. But very clear that the government already owned the land.
https://www.beehive.govt.nz/release/fund-facilitate-auckland-housing-de…
The immigrants could indeed be asked to build two houses - one for themselves, and one that would go into the state house pool.
If they're going to be collecting all the benefits of our infrastructure, as well as superannuation, they could 'pay their way' in advance - and the government gets to restock its state houses where they need them for free.
Should work out relatively cost neutral - 20 years of a couple earning super (about $590 per week), $31k per year, so $620k.
Pretty sure a townhouse can be build for that. So if they live more than 20 years in retirement they come off better - if not, NZ inc does.
The sad thing that we can not do anything. May be we can say that we all will stop working until goverment do something. So no bus and all shops are closed. Investors with JK may drive buses and etc. If the bus driver can not afford to live in auckland so J Key must do it with so called investors.
More sections for building standalone houses? 740 houses.. wow!!
Just bring the canes, the cheap labour and build some good apartment buildings. In 1 or 2 years Auckland could have not hundred of houses but thousands of new apartments which, as I understood, they are very much needed. As if speculators cared about supply. The more houses the more rich people!
Haven't you learned anything?? In Spain (42 million population) in the best times of our property development between 2002-2007 we were building up to 800.000 houses and apartments PER YEAR. Yep, more than Germany and England together.
And we had the same common bubble ingredient: CHEAP UNLIMITED CREDIT
Is this a bubble or what? 740 houses in two years.. meh.. aficionados.
Of course after the bubble burst we know what happened.. This became the national tapa: http://gestionarpatrimonios.com/wp-content/uploads/2007/09/bocata_ladri…
and now the consumption of cement is at levels of 1980's. But hey.. at least if we thought we needed more houses we BUILT them.
I wonder what will we be eating in NZ when our bubble burst..
What does the negative equity taste like?
The marketing department at Heartland Bank are bitterly disappointed that you said that alexil.
is this how it works the government buys the land off government departments (cheap) then sells to developers (most likely fletchers) cheap. then the government departments pay a dividend to the government or receive extra funding to the tune of the amount of the land.
so who is the winner here, this is a nice windfall for developers,
cant wait to see the spin on this turkey, of course the sheeple will not see the smoke and mirrors, but will cheer on clapping wildly
Dreams of new homes fade as developments dawdle -
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=115…
Dare I say it Nicky boy - we have been here before.
Fiddling/AKL burns, Deck chairs/Titanic, Tits/Bull, Nicky Smith/Housing Minister.
740 more houses for investors to snap up. Yes its a supply and demand issue and unfortunately a lot of this demand is from investors which no amount of supply will satisfy.
Angora goats, 80's share market, Ostriches and now poorly made, cold houses in average suburbs selling for $1M. Its a classic human cognitive bias called the bandwagon effect.
Why o why are the building densities so low? 9000m2 site in central Auckland by Mt Albert PakNSave they are going to build 80 homes on. Build a low-rise appartment block like 'The Ockham' and you could have almost 300 spacious homes. http://www.aucklanddesignmanual.co.nz/resources/case-studies/the-ockham
Remembering of course that Land bankers are the main beneficiary of our dysfunction under supply and THAT Central Govt. are the largest land bankers.
So what do you think that Govt. have sold the 1.8ha for? Notice they haven’t told us. I’ll have a guess and say $12,000,000 ish.
So for all the talk of wanting to supply truly affordable housing the old fashion way ie competitive supply allowing lower input development costs, allowing housing to be supplied at 3x ish medium price to income ratio, purchaser saves deposit on one household income and buys house without any subsidy from developer or Govt, what do we get?
Govt. sells land at highly inflated bubble price, stipulates that developer subsidizes ‘affordable’ housing which means that he has to charge more to the remaining purchasers.
Finally, the Govt. uses some of its super profit, minus of course the bureaucratic costs of managing all this, to subsidize rents in said development.
Everyone’s a winner – except for all the rest that do not qualify for any Govt. assistance and purchased at highly inflated prices through savings by their own honest effort, and carrying a mortgage that is twice as much as it should be.
Is it any wonder that those that can, rort the system for all its worth when all they are doing is following Nick Smiths lead?
7x24(hours)=168 168x365(days)=61,320 So 7 people per hour arrive in NZ so we need at least two houses built and ready every hour, 48 per day, 17,520 per year... how we doing? Can we also get a sprinkling of infrastructure and a touch of social services with that, Thanks Nick.
Some interesting statistics from Stuff's Business section today:
budget-2016-its-not-so-tough-at-the-top-while-the-bottom-gets-ignored
The top 10% of households have increased their property holdings. The housing statistics don't show who owns the rental properties that the lower groups are increasingly using. I suspect the top 10%!
Well off households likely have two high incomes coming in and no mortgage on the house. These leaves a lot of money that needs to be invested and rental housing has obviously been seen as a good choice even if it needs to be fed every month. Many will see it as just like paying a mortgage on your own house, topping up the rental/s.
Not much study has been put into the dynamics of this section of households. It probably would have been better for society for this group to invest in something else with these piles of surplus cash but rentals were just too compelling and other things perceived as too risky.
There is exponential growth of population in Auckland, It basically means exponential growth of profit. There is no other business that can give such profit. Also interest is very low, and % for deposit in banks.
see picture http://finkspace.wikispaces.com/file/view/urban_change_graph.GIF/305015…
Look. Its quite clear the Nat's are out of ideas and are resisting doing the right thing and are so gutless that they're ready to blame every other organisation for their failures, time for them to go. Their in a Third-Term-Itis Loop!
Spread out along the main routes to Franklin,Hamilton, Helesnville, Whangarei. Connect them with the roading infrastructure build & Rail network rejuvenation, creating jobs and housing along the way. With the NZ Superfund ($29b) and the ACC account with $38b. Borrow from those funds as well as deposits sitting in banks ($130b) giving them a return of 3%- 4%. Done!
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