SHA home price rise up to 10% allowed

QUEENSTOWN

THE developer of a special housing area (SHA) in Hawea has been granted permission to increase the prices of its house and land packages by between 7.5% and 10% .

But Universal Development’s (UD) request for a second variation to its agreement with the Queenstown Lakes District Council for the development will be revisited by council staff.

Speaking during the meeting’s public forum, UD owner Lane Hocking said when he proposed the development in 2017, he had planned to start building within 12 months.

With the first homes now likely to come to the market late next year, it was unrealistic to expect him to ‘‘deliver homes in 2022 at 2017 prices’’ because building costs had risen an estimated 11% over the past three years alone.

Even with the price increases he was seeking, the subdivision’s homes would remain the most affordable in the district by a ‘‘significant margin’’, Mr Hocking said.

The council granted Universal Development consent last April to develop the 465section subdivision, under SHA rules, outside the agreed urban boundary.

However, Hawea Community Association committee member John Langley told councillors UD had provided no evidence to support its argument about rising build costs.

Allowing the price increases undermined the rationale for the council’s approval of the special housing area in the first place, Mr Langley said.

Council planning general manager Tony Avery said building cost increases over the past three or four years had been ‘‘pretty significant’’, and the purpose of SHAs was to address affordability by increasing the supply of houses rather than seeking to directly control prices.

Councillor Glyn Lewers said three builders had told him labour and building material costs had risen a combined 6% over the past three years, and he had seen official consumer price inflation housing data that backed up that number.

Cr Heath Copland said the development had to be viable or the district would lose 400 new homes.

But Cr Niamh Shaw said the purpose of SHAs was to build affordable houses, and the parameters set for UD should not be diluted.

A second variation sought by Universal Development to its agreement with the council was kicked back to council staff for renegotiation with the company.

Universal Development wants the percentage of sections allowed to be sold without an associated build contract to be increased from 30% to 50%.

However, councillors agreed the issue be discussed further with the company, and a new report brought before councillors at their next meeting.