Nicholas Jones is a New Zealand Herald political reporter.

Land banking real estate ads attacked as 'shameless' by Labour leader Andrew Little

Labour leader Andrew Little says the "shameless" advertisements show the need for a crackdown on property speculators. Photo / File
Labour leader Andrew Little says the "shameless" advertisements show the need for a crackdown on property speculators. Photo / File

Hundreds of properties advertised on Trade Me as land-banking opportunities are an example of a practice as old as cities themselves, Housing Minister Nick Smith says.

More than 200 properties are advertised online as land-banking opportunities, with many referencing intensification allowed under the Unitary Plan as a selling point.

The new rulebook to squeeze in a million more residents by 2041 which tells people what can be built, where and how high buildings can go, was passed this month.

Real estate agents say land in areas marked for upscaling could gain in value considerably.

Labour leader Andrew Little says the "shameless" advertisements show the need for a crackdown on property speculators.

He pointed to 1.9 hectares in Papakura being listed as an "opportunity to own this land bank". That property has an asking price of $4.5 million but was sold just 12 months ago for $2.56 million.

A listed selling point is that the property is noted as "future urban" in the Auckland Unitary Plan, "making this an excellent investment for your future".

"The most disturbing listing is for a 'prime investment opportunity' within the Otahuhu Special Housing Area which is described as one of the 'last few large land banks' left in the suburb. National's Special Housing Areas were supposed to help cool the overheated Auckland housing crisis, not make it worse," Little said.

Land bank opportunity on Trade Me.
Land bank opportunity on Trade Me.

Confronted with some of the adverts on his way into question time, Smith said they did not show anything particularly new.

"Interestingly, I picked up an article from the 1880s in Nelson, [about] people speculatively buying up land on the fringe of the town with the hope that it was one day going to be urban and increase in value.

"Land banking has been around since Adam was a cowboy . . . what we do know is if we have a well supplied market like Christchurch . . . there is little economic incentive to land bank."

The Government's new national policy statement (NPS) would go a long way to freeing up supply and making land banking less desirable, Smith said.

When the NPS was released in June, he said it sent a "very clear directive" to urban councils that they had to provide sufficient capacity for new housing and businesses in line with projected growth.

All councils would be affected by the new policy, but it would have the greatest impact on 27 growing councils, in particular Auckland.

The statement did not specify where councils needed to open up land - only that sufficient capacity had to be created to match long-term demand.

Smith has also said a new $1 billion infrastructure fund would help counter such behaviour, because a major barrier to greenfield development was the infrastructure cost.

But Little said Government inaction had turned Auckland into a "paradise for speculators" with investors accounting for 46 per cent of purchasers.

Labour wants investors who sell a property within five years to be taxed. It will also consult on its policy to remove negative gearing over the next few months, with the aim to capture speculators rather than longer term, small investors such as those using a rental as a retirement investment.

- NZ Herald

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