Act Now, Labour & National Joint Together To Change Situation
Recently Labour & National announce together new density law, the new rule will allow people to build up to three homes of up to three storeys on most sites in Auckland, Hamilton, Tauranga, Wellington, and Christchurch without resources consent.
While this is amazing and shocking news let’s see what is short term and long term impact on housing. Let’s start with a “Resource Consent”. To keep it very simple resource consent is council permission what you can build in your land extra than expected or any deviation from standards. The new announcement gives a right to most people without getting council approval to build up to three homes of up to three storeys in 5 cities. Other cities may apply this standard if they have a housing shortage. This will 1- reduce the complexity of the development process & shorten the time to build 2- increase land supply and control land price.
While these are massive changes in the New Zealand property market but realities are:
- There is plenty of time before these rules come into effect. The government needs to make this an act with a couple of reviews and the councils need to update their plan till August 2022.
- This will shorten the resource consent process but still, other consents are needed before and after the build process.
- The intention is to supply more land but this may impact price increase to properties that have development potential in the short term.
- Although maybe land price control but material and labour cost will increase in the next couple of years.
My point is, this will not help property price control in short term (1~3 years). In parallel, this brings a good opportunity for homebuyers to buy the right property. They could potentially earn $500K in the next 3 years if have the right vision and select the correct property.
I can help you when you will buy your next property, If you don’t know how to start, contact me and I help you select the best possible property for you.