Section shortage drives Hamilton building consents down

Section shortage drives Hamilton building consents down8 Jun 2015

People looking for a new home in the Waikato may have to put their plans on hold because of a shortage of land available to feed the now high-demand property market.

Figures released by Statistics New Zealand show there's been a drop in the number of building consents issued from Hamilton City Council but it appears that's not through a lack of interest from new home buyers or developers but simply because there's not enough land for new properties to be constructed.

In the city's north, developer Andrew Yeoman said demand for new houses, and a shortage of available land, made things "very interesting".

His 145 housing development near Resolution Dr in Rototuna had already attracted a waiting list of people wishing to be notified once prices had been set.

The residential development had not been advertised nor was there any signage on the site so the amount of interest from potential buyers was surprising, he said.

"A lot of people want to be out north in the Rototuna area and there's not really a whole lot that's coming on, from what I understand out that way."

Yeoman said much of the earthwork had been completed at the site and building would begin in August.

Statistics New Zealand figures revealed Hamilton fell from 144 consents for new buildings in the month of April last year to 85 in April 2015, at a value of $21,125,574.

But in the Waikato district, which encompasses areas such as Huntly, Tamahere, Ngaruawahia and Pokeno, jumped from 38 to 49 consents.

Waipa's housing boom continued to grow, with the district council there issuing building consents for 131 new houses in the first four months of 2015 - 20 in January, 37 in February, 38 in March and 36 in April.

Overall, there were 220 consents issued in the Waikato region during April, 30 less than the previous year.

Waikato real estate agents backed Yeoman's sentiments, speculating whether a section shortage in the north and rising prices could be behind the drop in consents issued in Hamilton.

Harcourts general manager Brian King said there had been a shortage of sections in Hamilton for some months now.

"It is very hard to find good, quality sections so that relates to straight back to building consents."

Last year had proved to be fruitful with some good subdivisions opening up, King said. All that land had been taken now so it was simply a matter of waiting for more to become available.

There were some residential developments on the horizon, King said, and as soon as land became available there would be a lift in consents.

A lull in consents around this time of year was not unusual, said Simon Lugton of Lugton's Real Estate.

Much of the construction on new building projects would have needed to have been completed by now.

"In certain subdivisions we have sold out and we are waiting for the construction season which is more in the summer months," King said.

Section prices had also risen significantly, he said.

"We're mainly getting builders buying them and unless they are big companies they can only afford to build one or two at a time.

"They are being careful with how many they buy and how many they build - that's the majority of builders. And we are not getting a lot of private buyers, it is mainly builders buying them and then doing house and land packages.

"The hardest thing for those builders is getting the section. If they are waiting for someone to come along and buy the section, they could be waiting a long time."

However Hamilton City Council building control unit manager Cory Lang said he was unaware of a lack of available sections in Hamilton but did not rule it out as a possibility.

"It's certainly not the information we've been fed from our developers. We meet regularly with our commercial and residential developers and it's certainly not a concern they've raised with us at this point."

Lang said the city remained stable in terms of "consenting" despite the dip in April.

"We don't seem to get the peaks and the troughs that other areas seem to experience."

Auckland's housing crisis provided a perfect backdrop for growth in Hamilton, and he guessed there would be the potential for more development in the "not too distant future".

Lang said it was difficult to say what had caused the drop in Hamilton's consent numbers by looking at such a "small clip of time".

"There's a lot of different drivers around consent numbers, whether it be district plan changes, whether it be building act changs that have come through or product availability."

Waikato District Council's economic development manager Clive Morgan said residential developments such as Pokeno were driving residential builds in the district.

Pokeno, famous for its bacon and ice cream, would likely underpin growth in the area for some time, he said.

A new housing development underway in Ngaruawahia was also likely to attract interest from buyers in Hamilton and Auckland, Morgan said.

Lang anticipated Waikato's growth would eventually flow through to Hamilton once motorway developments went ahead.

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