Calls for collaborative response to crisis
where we need to be. The implication of that is increased house prices,” he said.
“It’s fortunate the Government is very focussed on this issue but it’s going to take central Government, local government and the private sector to work together to try to turn this around.
“We will be the most unaffordable city – we already are, but it will be worse. It’s a call to action for all of us.”
In January, Trade Me’s rental price index showed rents reached an alltime high, and the Bay of Plenty overtook Auckland to have the country’s most expensive rent. Recent Corelogic income and house price analysis found it would take longer to save a home deposit in Tauranga than in any other main centre.
Interest rates’ impact
Council manager of building services Steve Pearce told the Bay of Plenty Times “drivers” responsible for fewer consents included a drop in applications from the “home-builder group”.
The “significant reduction” aligned with interest rates beginning to rise in late 2021, Pearce said.
In February, NZME reported in the past two years, the average one-year rate had gone from 3.7 per cent to 7.3 per cent, which on a home loan of $500,000, equated to an extra $370 a week.
A breakdown of rates across all banks showed nearly all floating home deposit rates were higher than average.
Pearce said Plan Change 33, the council’s response to the Government’s National Policy Statement on Urban Development, was expected to allow for more housing through intensification of existing residential areas. More intensive development was being consented, he said.
Classic Group director Peter Cooney has seen the market cooling down throughout New Zealand over the past 18 months.
Classic Group includes Classic Builders – one of the country’s largest residential building firms.
The drop-off in new builds was not due to a lack of interest, Cooney said.
“Enquiries are really good but people just can’t get finance, when they go to the banks many struggle to pass the first financial stress test,” he said.
Tauranga suffers ‘double whammy’
“Tauranga got a double whammy because it’s got a severe lack of land and a severe lack of stock,” Cooney said.
Cooney said he did not believe developers would invest in the types of apartment buildings wanted under Plan Change 33.
However, Cooney agreed with Selwood’s assertion housing issues required a collaborative response from the Government, councils and the private sector.
While he was hopeful the Nationalled Government was making the right noises, the devil would be in the detail, Cooney said.
Govt’s plan to fix housing crisis
Housing Minister Chris Bishop said, on behalf of himself and Building and Construction Minister Chris Penk, that the residential construction slowdown across New Zealand was driven by high interest rates during the cost-of-living crisis.
Bishop said the coalition Government was focused on lowering inflation “and getting the economy back on track which is the most important thing we can do to turn this around”.
“We also have an ambitious plan to fix the housing crisis by unlocking
land for housing inside and around our cities, building infrastructure, driving down building costs and making it easier to build. The Government will make announcements about these policies in due course.”
In a statement on Wednesday, Penk said the Government was working to reduce delays by having councils file quarterly reports.
“Delays in the building consent system increase the cost of building and make it harder for the sector to deliver more affordable homes for Kiwi families.”
There was no consistent nationwide data on consent timeframes, he said.
“This will change and starting in April, Building Consent Authorities will be required to submit timeframes for building consent and code compliance certificate applications with this data being published on MBIE’S [Ministry of Business, Innovation and Employment] website every quarter.”
Kiri Gillespie is an assistant news director and a senior journalist for the Bay of Plenty Times and Rotorua Daily Post, specialising in local politics and city issues. She was a finalist for the Voyager Media Awards Regional Journalist of the Year in 2021.
Tauranga got a double whammy because it’s got a severe lack of land and a severe lack of stock.
Classic Group director Peter Cooney