Interest rates have never been lower and demand has never been higher -- so why aren't vast new housing estates springing up all over Auckland?
Is it the price of land, price of construction materials, labour and trades shortage, or could it be issues with developers getting access to money to finance such big schemes?
Evan Davies, chief executive of Todd Property, arguably New Zealand's largest residential developer, says funding challenges are indeed one of the problems as development becomes more intense and far more costly to build in Auckland.
"I've never subscribed to the theory that it's raw land prices," Davies says, when asked about reasons for lack of new housing development.
"It's not so much the availability of funding, but capacity in a broad financial sense is the issue," he says, referring to the ability of many developers to get access to money for the more complex, long-term, large-scale housing projects.
"Much land development is a very long, capital-intensive process," he says, referring this time to the need for those developers to secure lines of credit over a long-term time frame.
"The period of time between commencement [of a project] and realisation can be quite a number of years."
Todd has had experience of that. The 160ha Long Bay project, where it is building thousands of new residences as well as a new town centre, has been running for years.
"Part of that was getting the planning in process but more time-consuming was creating the infrastructure before it could begin selling land, mainly to group builders, for the residences.
To date, more than 300 residences are up there -- a mixture mainly of terrace-style and stand-alone larger houses on Auckland's northern outskirts.
"Estimated project completion date: 2022," Todd says, on its website, of Long Bay. Yet plans were first launched for housing there way back in 2001 by former landowner Greg Olliver and his Landco.
That is a 24-year timeframe between the initial conception and completion. The project has changed along the way, including Todd agreeing to develop only 60ha of its 160ha site above the precious coastal Long Bay Regional Park.
Davies says the rise of more multi-unit housing schemes, more terraced-style housing and more apartment blocks brings more expense and more complexity to large-scale housing projects.
"As we focus more and more on intensity in residential development, that brings capital availability more into focus because you need more and it takes longer to build apartments than single homes -- it simply requires more capital," Davies said.
Todd and NZX-listed Fletcher Building are New Zealand's largest businesses funding and developing Auckland's mammoth new housing estates, responding to the critical shortage of housing.
But these businesses are not just financing the creation of the projects. They are building them as well, taking all the steps in the process: buying bare greenfields and brownfields sites, and developing a master plan for what will sometimes be entirely new town centres within the surrounding housing estates. They must then secure planning consent to allow for housing, create the legal titles for each residence, register those titles, build the infrastructure needed such as roads, bridges, footpaths and street lighting. Then there's landscaping the parks and streets.
Fletcher and Todd worked together, and are almost finished, at Stonefields in Mt Wellington.
General Finance, based at Ellerslie, loans up to 70 per cent to buy standard residential sections.
"In smaller centres or out in country areas we will reduce our loan to value ratio accordingly. We do not lend on commercial subdivisions. If a borrower wishes to purchase a piece of land to cut up into a couple of sections, we are happy to consider this," they said in a fortnightly commentary.
General Finance has noticed a big increase in house building.
"Nationally, the number of building consents being issued for new dwellings was 28,000 to the end of the March year. The last time this figure was matched was in 2004, before the global financial crisis.
"Only four years ago, the national figure was around 15,000. The issue is that the level is still not high enough. Residential construction is a big employer, but a number of developers are saying it is getting harder to find skilled tradespeople.
One of the most effective ways to stabilise house prices is simply to build more. This is more effective than enacting a number of new laws such as land taxes, that do not make much sense.
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"One of the most effective ways to stabilise house prices is simply to build more. This is more effective than enacting a number of new laws such as land taxes, that do not make much sense," General Finance says.
Williams Cairns of General Finance said his business funded small-scale housing developments. "Once you get outside the banks, there's very few second-tier lenders in the market and that's because a lot of the financial regulations have resulted in big compliance and banks have the ability to comply with all the rules. Some of the smaller people are saying this is too hard and they're just got out of it.
"The regulation in the marketplace has pushed the indigenous Kiwi institutions out of the second-tier lending market. I'm all in favour of the capital adequacy regulations on finance companies, and people should have a greater level of protection when investing.
"It's all about the Government interference with our lending, such as setting of fees rather than letting the market decide. If a lender charges high fees and high interest rates, no one is going to go to them. The market should be left to sort it out. We now have fewer alternative terms of finance.
"If it's not the banks, where do you go? Years ago there was more diversity of funding, well before the global financial meltdown, and they had wider mandates. We don't want to go back to where people put money in and lost it. Laws that have strengthened the financial stability are good laws," Cairns says.
When it comes to residential development, retirement village businesses are bigger than Todd and Fletcher combined, and they are powerful financial forces when it comes to funding.
Their money comes from traditional trading bank sources and their shares are widely held by a combination of institutional and retail investors.
Ryman, Metlifecare and Summerset are NZX listed businesses, and have Auckland central in their growth plans, although Ryman has spread to Melbourne where it says it will soon be building more residences than throughout all of New Zealand.
The village operators argue that existing housing stock is freed up for purchase when older people buy a licence to occupy in a village.
Reesby & Company describes itself as "the largest commercial property finance brokers in New Zealand. The majority of our transactions are in the $1 million to $20 million range, however the company has also financed a number of New Zealand's largest property projects.
"... We also have our own private lending vehicle for property finance that does not meet bank criteria."
The Auckland-headquartered business, headed by Martin Reesby, offers merchant banking, commercial and retail finance, and development and investment finance, and is behind some of New Zealand's largest projects.
Many of these are towering new apartment blocks and include the $100 million Queens Residences apartments on Queen S, $200m Lighter Quay development in the Viaduct Basin, $60m Chaffers Dock Apartment building in Wellington, Vincent Apartments in Auckland CBD, and Hopetoun and Urba Apartments in Freemans Bay.