In just 8 weeks, plans will be in place for the residential intensification in the form of multi-unit development.
From August 2022, you can officially build up to three homes on a single section, up to three storeys high - without going through the resource consent process and every council in the wider regions of Auckland, Hamilton, Tauranga, Wellington, and Christchurch will be required to allow medium-density housing on almost all residential land.
Whatever is built will still have to be to the Building Code, but you will be able to cover up to 50% of your land, build up to 12m high and only come in 1m from the back and side boundaries and 2.5m from the front boundary.
This essentially means you no longer need to navigate the council height and location rules, and or get neighbour's permission to intensify the housing on your land – what a gamechanger.
What does that mean for you?
Up until now, you have seen properties being amalgamated for developments to meet District Plan development rules. The existing homes have been removed and replaced with terraced housing, with one home per 120m2 (more or less). Now you will be able to do the same (and more) on small sites. For example, a 300m2 site with 50% site coverage will give you a potential building footprint of 150m2. If you go up three storeys that gives you three 150m2 homes on a site that currently may have just one small flat.
Here's a reminder of what you could consider at your place:
- Keep the existing dwelling and build on the back or front section. Think outside the square of what you will build on the front or back section. A small unit could give you a significant return, given you aren’t buying the land. You might earn $450 per week for something that costs you $300,000.
- Knock down your existing dwelling, potentially subdivide the section and on each new section build two three-storey blocks as of right.
- Subdivide your section and build three storeys, keeping your existing dwelling.
- Purchase a property that’s not an ideal rental, with the intention of subdividing for a greater return. Remove the existing buildings from the site and build new ones.
- Build one 3-storey rental on the front or back of your existing property. You’ll only need a 40m2 footprint to get a 120m2 dwelling
- Build three new standalone rentals up to 3 storeys high.
- Build three storeys with one rental on each floor rather than each being three storeys, this will require fewer stairs.
- Add another storey to the top of your existing dwelling, or
- Any combination of the above
We are likely to see more homes being knocked down and replaced with townhouses. Natural hazards or heritage value appears to be the only criteria councils can use to object.
This law change will likely result in up to 105,000 new dwellings over the next eight or so years. The world trend and likewise in NZ is for more people to be renting for life. You can be part of the solution for creating more rentals or buy property with that potential and when you’re ready to sell let someone else do it.
Buying or retaining rental property with intensification potential should give you greater capital gains over time as real growth is in the land than in the buildings.
What’s possible at your place?
If you’re looking to maximise your land, or just want to add one or two more homes, we’re here to help. Talk to your Property Manager or one of our experienced Business Development Managers today and start the conversation.
