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
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