Bay houses shrinking to become more affordable

The average size of sections and houses in Tauranga's Special Housing Areas could shrink by up to 15 per cent in a bid to make them more affordable for new home buyers.

Tauranga City Council has set new targets for house and section sizes in its draft Housing Accord submitted to Building and Housing Minister Nick Smith for approval.

Latest data showed that Tauranga's median house price in October of $550,000 was nearly seven and a-half times the value of the city's median income - making Tauranga ''unaffordable'' according to the Ministry of Business, Innovation and Employment.

The proposed new accord follows the Government's decision to extend the date in which Special Housing Areas could be established to September, 2019. Tauranga's current Housing Accord expired at the end of this month.

The council this week endorsed the proposed accord which included targets to reduce average house and section sizes within land released for development by the Housing Accord.

It asked the Government and council to ''endeavour in good faith'' to reduce the average house size to 165 sq m or less, and the average section size to 500 sq m or less.

The target for houses was at least 10 per cent less than Tauranga's average 183 sq m house size between 2011 and 2016. Greenfield section sizes would reduce by at least 15 per cent on the 2011-16 average of 595 sq m.

A report to Tuesday's council meeting said the key change to the new Housing Accord was to deliver smaller houses at a more affordable price. The other target was to increased the supply of land of land ''to ensure a healthy degree of competitive pressure amongst developers in the Tauranga housing market''.