Nelson land in a few hands
Just 10 people or companies own almost two-thirds of the undeveloped residential-zoned land in the Nelson-Richmond area, a government indicator reveals.
The land ownership concentration indicator from the Ministry of Business, Innovation and Employment (MBIE) shows that those 10 people or companies own close to 65 per cent of the undeveloped residential-zoned land in the ‘‘Nelson Urban Area’’, which includes most of Nelson city, Richmond, Aniseed Hill, Bell Island, Best Island, Hope and Ranzau.
‘‘[It] is something that we have suspected for some time,’’ Tasman District Council policy planner Jacqui Deans last week told the council’s environment and planning committee.
In a report, Deans says the Nelson Urban Area is in the top three areas nationally for the amount of land being held by a small number of owners, along with Napier and Hamilton.
The indicator is an attempt to describe how close to a monopoly a particular area operates in with regard to the ownership of undeveloped land, Deans says.
A table on the MBIE website shows that of the 10 biggest land ownerships, the largest holding is 99.3ha, or 20.3 per cent of the market share. The table lists the controlling entity as K B Quarries Ltd. The New Zealand Companies Office website on Wednesday listed Kevin Richard Blair and Judith Ann Blair, of Christchurch, as the directors and shareholders of K B Quarries Ltd.
The MBIE table has Nelson City Council as the controlling entity for the third-largest holding of undeveloped residentially zoned land, at 35.1ha, or 7.2 per cent of the market share.
The smallest of the top 10 is 11.6ha, or 2.4 per cent of the market share, with the controlling entity listed as St Leger Group Ltd.
In her report, Deans says the source data shows that the top nine landowners are in Nelson, with just the 10th-ranked parcel in Richmond.
‘‘Presumably the other large landowners in Richmond do not own residentially-zoned undeveloped land that is large enough to feature in this top-10 ranking,’’ she says.
The information is contained in the Nelson-Tasman monitoring report for April to June under the National Policy Statement on Urban Development Capacity. It is the fifth such monitoring report, and was produced jointly by the Tasman district and Nelson city councils.
The monitoring report says that since 2016, consents for new dwellings in Nelson do not appear to have been keeping up with household growth.
‘‘Despite Tasman’s increase in new dwellings exceeding household growth in the region . . . an apparent overall undersupply in the combined Nelson-Tasman market could be one contributor to the significant increase in house prices in the last two years,’’ the report says.
The apparent shortage of new housing in Nelson is despite an estimated nine years’ worth of available dwelling capacity. ‘‘This is land that is zoned, serviced or planned to be serviced, and feasible for residential development,’’ the report says.
It goes on to outline ‘‘market dynamics’’ that affect the supply of affordable housing, including the cost of infrastructure, finance packages for low-income home owners, the market’s limited provision of smaller housing, building costs, and the timing of the release of land by developers and owners.
The median sale price for the year ended June 2018 was $503,250 in Nelson and $556,500 in Tasman. Prices were increasing, but not as steeply as they were in 2016-17, Deans told councillors.
The median sale price for the year ended June 2017 was $457,777 in Nelson and $519,753 in Tasman, according to an earlier monitoring report.
‘‘Poor housing affordability continues to be a theme for both Nelson and Tasman, still the third-least affordable region in the country,’’ Deans says in her report.
The Massey Home Affordability Index, updated in June 2018, shows a 1.7 per cent decline in affordability in the past three months.
Cr Dana Wensley said there were problems with land banking.
Another MBIE indicator, the price-cost ratio, shows the gap between house prices and construction costs for stand-alone dwellings – the cost of the land. The price-cost ratio is 1.5 when the cost of a section is one-third of the house price, and that ratio is used as a benchmark for assessment. If sufficient development opportunities exist, the ratio should be below 1.5 most of the time.
The latest 2017 ratio for the Nelson Urban Area of 1.55 puts it just above the ‘‘acceptable’’ threshold for supply of land.
‘‘However, it is also noted that the ratio has risen during a time which coincides with nationally high house prices, and demand for housing.
‘‘The fact that the ratio is increasing may explain why developers and/or building companies are building relatively large, expensive homes –since the land value is increasing, the capital value has to also be relatively high to make the development viable for the developer,’’ the monitoring report says.
The Nelson Urban Area is in the top three areas nationally for the amount of land being held by a small number of owners, along with Napier and Hamilton.