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High density zones promising for investors

Investors with decent sized properties in areas zoned as high density under Auckland’s Unitary Plan are likely to be sitting pretty – whether buying, selling or holding.

Tuesday, April 18th 2017, 3:00PM

by Miriam Bell

New research from Homes.co.nz shows that the Auckland Unitary Plan has had a big impact on house prices in high density “mixed housing urban” zones.

More than 50% of properties sold within the last 12 months in such zones have sold for over one and a half times their CV, according to the property information website’s data.

In comparison, only 31.7% of properties in “single house” zones have sold for more than one and a half times their CV.

Homes.co.nz spokesman Jeremy O’Hanlon said the Unitary Plan is clearly having a significant impact on the wealth of those lucky enough to own a sub-dividable property in a high density zone.

One example of this was a Glen Eden property which sold for over two and a half times its CV in November 2016. It sold for $1.795 on a CV of $690,000.

Another was a West Harbour property which sold for over two and a half times its CV in December 2016. It sold for $1.39 million on a CV of $530,000.

O’Hanlon said this means that owner-occupier buyers without an interest in sub-dividing should be weary of trying to buy a sub-dividable property in a high density zone as they are likely to pay a premium.

But, for investors, there are opportunities to secure strong capital gains in these zones for those who are buying and holding, he said.

“That’s particularly the case if they identify higher quality properties that aren't likely to catch the attention of short-term developers.

“While it might not be viable to bowl a nice property now, that may well change in 10 years’ time. So look at zoning as a cherry on top, but don't find yourself competing on price with a developer.”

Meanwhile, for anyone selling a property in a high density zone, the sales data suggests they are more likely to gain a better price.

O’Hanlon said property sellers should make sure they are well aware of the zone of their property as not factoring it into the pricing could leave them exposed.

Auckland Council’s Governing Body voted to adopt the Unitary Plan in August last year and it became operative in part in November.

The parts of the Unitary Plan subject to Environment Court and High Court appeals have not yet become operative, although a High Court ruling against the zoning appeals should help ease that process.

Read more:

Court rules against Unitary Plan zoning appeals 

Zone changes may be windfall for investors 

« Getting started on investment propertyFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

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AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

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