Thursday, 21 May 2015
Property Institute gives tick to Budget Housing initiative
Property Institute of New Zealand Chief Executive, Ashley Church, has given a tick to Government plans to free up land,
in Auckland, for housing development.
Around 500 hectares of land, currently owned by education, defence and transport agencies, has been earmarked, in the
Budget, for development in areas zoned for residential housing in the city. $52 million has also been set aside to fund
the plan and to enable the Government to partner with private developers to build thousands of lower-cost homes in
Auckland.
Mr Church describes the move as ‘a hugely significant initiative which will make a big dent in Auckland’s supply
problem’.
“The 4,500 to 10,000 homes which could be built on this land will go a long way toward meeting pent-up demand and
helping to resolve the Auckland housing market crisis”.
However, Mr Church cautions that this will not provide a ‘quick fix’ and warns that homebuyers should not expect house
prices to drop, or house price inflation to slow down, as a result of the announcement.
“It will take a considerable period of time – perhaps as long as 2 or 3 years - for these homes to be built. In the
meantime we still have a supply issue and house price inflation is based on what’s happening right now – not what the
situation might be in 2 years time”
Mr Church also warns that buyers should expect these homes to be selling at whatever is the market rate for similar
homes when they eventually hit the market.
“There’s no suggestion that the Government or private developers are proposing to subsidise the price of these houses –
so people shouldn’t expect a sudden flurry of ‘cheap homes’ coming onto the market in 2017 or 2018”
Mr Church says that the real benefit of the policy is that it will help address demand.
“Once supply matches demand – then house price inflation will taper off. Not before”
Ends