Doubling of new homes in next five years

21:21, Jun 24 2014

House building will double in the next five years under a new agreement to create 7000 new homes in Wellington - but critics say the city's infrastructure will not cope.

Housing Minister Nick Smith and Wellington Mayor Celia Wade-Brown signed the Wellington Housing Accord on a windy Churton Park construction site yesterday. It is expected to be ratified by the city council tomorrow.

The accord makes it possible for the council to set up "special housing areas" where consenting is fast-tracked, with no public notification and limited appeal rights. It also includes provisions for the Government to override the council and declare special housing areas without agreement. Similar accords have already been agreed in Auckland and Christchurch with another planned for Queenstown. 

Neither the Government nor the council thought Wellington's current rate of house building - about 750 a year - was good enough, Smith said. The target for the first year of the accord is 1000, which will rise to 1500 a year for the next four years.

Wade-Brown said it had not yet been decided where the homes would be built, and that would be subject to consultation. However, six areas under investigation included Churton Park, Kilbirnie, Adelaide Rd and Johnsonville. Types of development would be spread between greenfield expansion, infill housing and apartment-style homes, she said.

Housing affordability would be improved by increasing the supply of housing, Smith said. Even if the new homes built were more expensive, people moving into those homes would free up cheaper stock.


The average Wellington home now costs 5 times the median annual income, well above the Government's affordability target of four times the median. The council was looking at whether it would require a percentage of the new houses to be "affordable", Wade-Brown said.

Johnsonville Community Association vice-president Graeme Sawyer said the northern suburb had a "massive infrastructure deficit" and could not endure development without more recreation areas, an expanded shopping mall and better entertainment options such as a cinema.

People lived in Johnsonville for the space it offered, making it unsuited to dense development, he said. "If people want to live cheek by jowl, they'll want to live somewhere like Mt Cook, somewhere close to the CBD. People [in Johnsonville] still want quality of life, they still want a backyard."

Property expert Olly Newland welcomed faster consenting, but agreed the main issue was a lack of infrastructure. "It's a noble idea, but the reality is you can't just create infrastructure [to service the houses]," he said. "You can put the consents out and draw lines on the ground, but whether it will actually produce more houses depends on all services coming together at the same time."

Newtown Residents' Association president Martin Hanley welcomed more housing in his suburb, saying more residents made streets safer and boosted the local economy.

Developer Mike Russell, who has built more than 300 homes in his career, mostly in Churton Park and Grenada, said anything to further streamline consenting would assist building and should lower prices.

"It does take a long time [to get to build], especially if resource consent is required. It's encouraging the council and Government are working together."

Wade-Brown said the council had a good track record on processing consents, getting through an average 80 for homes a month, but could do better.



Auckland Council signed a housing accord last year, promising up to 39,000 new homes - but observers say it has yet to yield any concrete achievements.

The Government's perspective was that building more homes would bring down house prices, but forces such as immigration, mortgage policy and rising incomes were pushing them up, Auckland University professor of property Laurence Murphy said.

"Clearly, producing houses is important, but we're not sure if it's sufficient."

Developers might have to build a certain number of affordable homes, but there was nothing to stop their value increasing once sold, he said.

While greenfield developments in Auckland had been relatively easy to push through, urban sites had been contentious, Murphy said. "Developers will build houses given the opportunity, and try to sell them. But there might be no school, so where will the children go?"

Labour housing and Auckland issues spokesman Phil Twyford said the accord had failed to deliver: "The Auckland Housing Accord promised 39,000 new homes and not one has been built . . . it's pretty clear the approach Government has been taking is ineffective."


Wellington's housing is rated "severely unaffordable" by the Demographia international housing affordability survey.

The average home sells for more than 5 times the average annual income in the region, it found.

Last month the average sale price across the capital was $412,500 overall, broken down across the city:

Northern Wellington $551,000 Central Wellington $442,500 Eastern Wellington $588,000 Western Wellington $560,000 Southern Wellington $540,000 Pukerua Bay/Tawa $405,000 Upper Hutt $335,000 Hutt Valley $381,000

Source: Real Estate Institute of New Zealand

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