Demand increasing for land unaffected by Auckland's water infrastructure constraints
Dave Barr outside a retirement village development in Kumeū completed before Watercare constraints.
Photo:
RNZ / Luka Forman
Demand is increasing for land unaffected by Auckland's water infrastructure constraints, which an economist says could push up prices in the city's central suburbs.
Last year, Watercare [https://www.rnz.co.nz/news/national/545620/absolutely-gobsmacked-property-developers-slam-decision-to-temporarily-stop-new-builds-wastewater-connection-in-auckland-suburb
released a map] revealing many areas of Auckland with water or wastewater restrictions which meant new builds in those areas might not be able to connect to the water network until necessary upgrades were complete.
It meant some property developers were avoiding large chunks of Auckland affected by the constraints, putting more pressure on the property market in the city's central suburbs.
Hopper Development had three projects in the Hibiscus Coast which were all affected by Watercare's constraints.
The future of two of them was now uncertain, and one - a care home for the elderly, was scrapped completely because of the restrictions.
Development manager Dave Barr said they would now pay a premium for any new properties which they were confident would have the necessary infrastructure.
"Our business is changing, we're actively seeking properties with good infrastructure connectivity, because it means less risk for us, we can control outcomes better."
That meant they would not be starting any projects in the Hibiscus Coast, Warkworth, North Shore, Beach Haven and Birkdale, Waitakere, Ōtara-Papatoetoe, East Auckland, and Beachlands-Maraetai.
All of those areas had some kind of water or wastewater constraint according Watercare's map.
"It knocks out a bunch for us and other developers, effectively deeming them no-go zones for developers."
Watercare's map outlining capacity issues in wastewater network.
Photo:
Supplied / Watercare
Rasvinder Singh, director of property development company Reliance Homes, recently bought a property at auction in Mt Roskill without Watercare restrictions, beating 12 other bidders.
Knowing the property had no potential issues with water infrastructure made it more appealing, he said.
"We did browse more of the properties over Auckland. We did shortlist. A lot of areas might be promising on paper, but if there's limited wastewater capacity you are stuck. Even if zoning allows development."
Property economist at Cotality, Kelvin Davidson said this change in the areas developers bought in would likely push up property prices in areas that could connect to the wastewater network.
"If you see increased demand for the same amount of land, you're probably going to see some increase in value. So I think that's a fairly standard expectation."
Dave Barr from Hopper Development said the restrictions would have huge knock-on effects for the region.
"It's the trades, it's the other service providers like Chorus... it's home affordability for young families, that whole pipeline stops effectively."
Property consultant and ex Auckland councillor Michael Goudie represented a group of industry professionals called Housing Without Hurdles.
He has been advocating to Watercare on behalf of some the affected developers, but said progress was slow.
"We have put our case forward. We've had a face-to-face meeting, a couple of letters have been exchanged but that's sort of where it's fallen short. We find it incredibly frustrating just trying to get timely responses."
With these constraints, and other council compliance costs, some developers were giving up on the industry - which Goudie said would tank housing supply in the long run.
"It gets to a point where it's not about extra costs on each one of those lots. It's actually just about developers packing up their toys and leaving."
In a statement, a Watercare spokesperson said it was working hard to navigate several complex challenges and was focused on the health of the environment and current and future communities.
They said Watercare was focused on supporting growth in line with Auckland council's vision.
Watercare would continue to engage with developers all over the city, answer questions as they came up, and support them through their developments, the spokesperson said.
There were numeous examples where developments were moving forward, they said.
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