RBNZ policy tweak “gamechanger” for Auckland’s supply woes

Property Institute chief executive Ashley Church said RBNZ briefing papers show that investors will now be exempt from requiring a minimum 20% deposit for a property purchase when the loan is to build a new home. 

Auckland’s much-discussed housing supply shortage means many more new dwellings need to be built as quickly as possible.

Church said the RBNZ’s “game changing” policy tweak, which was introduced without any fanfare, was a massive step in the right direction.

“Property investors are the people who are best positioned to get new houses built in large numbers.

“Instead of pursuing futile attempts to curtail their activity, it would appear that the Reserve Bank has now elected to try and direct their investment to where it will do the most good – the construction of new homes”.

The RBNZ estimated the change will result in just an additional 200 houses being built per month.

But Church said the figure will probably prove to be much higher once the change becomes more widely known.

In his view, there is likely to be a large, rapid switch to investment in new home construction.

This will be accompanied by a significant increase in the development of easily accessible new home building packages and products by house building companies.

Church added that, while the new policy allows banks to reduce the deposit required for a new build, any such lending is the prerogative of the banks and investors will still need to qualify under any criteria that their bank sets.

Meanwhile, the scope for and amount of new building developments in the pipeline for Auckland does seem to be increasing.

Late last week, another 11 new Special Housing Areas (SHAs), which will accommodate up to 1600 new homes, were announced for Auckland.

Housing Minister Nick Smith said the new brownfield areas mean there is now a total of 97 SHAs scattered around Auckland.

All up, the SHAs have the space for a potential total of 47,000 new homes of mixed types.

“They mark further progress under the partnership between the Government and the council to improve housing supply and affordability in our largest city,” said Smith.

Announcements of new, large-scale housing developments are also coming with growing frequency.

For example, Ockham Residential recently confirmed it will be responsible for a new housing development in the heart of Avondale.

Ockham is planning to build up to 52 dwellings in three buildings on the site – which sits beside the Avondale Racecourse and used to be a rugby club.

The project is expected to act as a catalyst for the regeneration of the suburb, its town centre and its amenities.

Another example is Gaze Property Partnerships’ 8 Pacific development in Manukau.

Gaze has just announced it plans a mixed use community development of 850 dwellings on a SHA site next to the Vodafone Events Centre.

A mix of housing types including apartments, townhouses, terraced houses, and four-bedroom homes - along with provision for retirement living and student and hotel accommodation – will be built.