Zoning Changes In Aukland Trigger Inflation in Property Prices

Experts are predicting property prices in Auckland to increase with the possible implementation of zoning changes that will push for intensive housing, Stuff reports.

Auckland Council has revealed the controversial zoning plans, which if implemented, will turn chunks of the city's leafy central suburbs into townhouses and apartment developments.

This move will boost the value of some properties, says John Gray,  chairman of the Home Owners and Buyers Association.

If the planned changes will be followed, it will turn the previous Single House zoning to Mixed Housing zones, which will make for more dense styles of accommodation of up to three storeys than just one house on one section.

According to Gray, price expectations are already being driven by the potential for intensification.

"Those that now fall into those areas that are defined for intensification are seizing the opportunity to leverage that in the sale of their homes," Gray said.

Developers have also sought to acquire clumps of properties to build their multi-unit developments.

"They're paying a premium over and above what a buyer genuinely looking for a home would be paying for the property," he said.

For deputy Mayor Penny Hulse, should Auckland's incoming Unitary Plan go through the changes, it would result an increase in the value of land.

"I think we need to be honest about that, I don't think we need to duck and dive around the fact that there may be some windfalls for some people.

"When your land is rezoned and you have subdivision rights that you might not have had before it may increase the value of your property," she said.

The long term effect of the zoning changes is also believed to provide a solution to the housing crisis by enabling the development of greater number of smaller and more affordable homes.

But Collin Milne of Real Estate Institute thinks the clear effects of the zoning changes won't be completely realized until they are actually in place the coming year.

"With the current median sales price being driven by increased demand through migration and low interest rates, it is difficult to predict what the outcome of the Auckland Unitary Plan will be," she said.

The flipside of the growing housing density, on the other hand, is the drop in value of some nearby properties, says HOBANZ' Gray.

Since in general, intensification means building upwards, issues like spillover parking  on the street and loss of sunlight and privacy are to be anticipated.

"It does have an immediate impact in our view on the value of properties in close proximity to those that are going to be developed in this way," Gray said.