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Government frees up subdivision (July 24)

Subdivision of land for housing is set to become easier on the back of the Government’s new ‘Going for Housing Growth Policy’.  In July the Government announced Pillar 1 of this policy, requiring councils to free up land for housing.  This means our larger city and adjoining district councils soon must allow for 30 years of high housing growth in their district plans, as opposed to the current 3 years!  They will not be able to enforce strict rural-urban boundaries and they will be forced to remove unnecessary planning barriers. 

Loosening the planning rules currently restricting subdivision will undoubtedly lead to a drop in land values, but only once the new rules are in place.

Allowing more greenfield subdivisions on the edges of cities and more intensive subdivision and development in central urban areas will provide opportunities for many landowners.  Councils have to vote on whether or not to stick with current medium-density intensification rules established under the previous Government.  However, if dumping those rules, they must demonstrate how they can comply with their Housing Growth Target imposed by the Government. 

This move will level out land and housing costs by making subdivision easier.  Allowing more planned subdivisions adjoining the city boundaries will provide people with land for a generous family home and lower housing costs in the medium term.  This in turn should lead to fewer subdivisions for separate houses in the inner city, enabling those sections to be more efficiently developed for apartments, including services such as cafes, dairies and retail businesses.

You might be wondering how this will affect you, sitting on a quarter-acre section with room for another dwelling.  As the urban limits are relaxed and more land is available, people will have the choice of building in a new area with a nice road frontage rather than a back section in an older area of town.  Subdividing now and selling, whilst the demand exists, could be a good option for you.

It might be hard to envisage central city land dropping in value with its proximity to services.  However, over time values should level out as city limits expand, and more options are available for housing along with associated suburban shopping centres. Combine this with increased density and the figures might stack up better for more affordable inner-city apartment living also.

If you have a large section that could perhaps accommodate an additional house or two, feel free give us a call for an appraisal of your current options.