The Hamilton City Council will join other New Zealand centres and be able to fast-track new areas for residential development under a new deal with the government, Building and Construction Minister Nick Smith said today.
"Hamilton's population has experienced growth of more than 7 percent during the past three years, and this has increased the pressure on housing supply," Smith said. Future projections show the population is tipped to increase from 161,000 in 2016 to 177,000 in the next five years.
In a bid to cut through red tape and streamline the process the government has inked a new Housing Accord in Hamilton to zone new areas for residential development. It sets a target of 4,200 homes and sections in the next three years. Similar accords that exist in Tauranga, Auckland and Nelson and have been extended, Smith said.
Record net migration and record low interest rates continue to put pressure on nation's housing market with November property prices now 51 percent higher than a previous market peak in 2007, according to government valuer Quotable Value. While much of the pressure has been in the largest city, Auckland, price lifts have spilled over into other centres. Home values across Hamilton are up 23 percent on the year, QV data show.
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While the Reserve Bank has taken steps to curb demand, in particular on the investor front, it has consistently said the main issue lies with supply.
According to Smith, a three-year report on the Auckland Housing Accord shows 37,538 new consents and dwellings against a target of 39,000 - or 96 percent of target.
"The 34 percent growth in residential investment in Auckland during the past year to a record $4.8 billion confirms the progress being achieved in growing supply," he said.
Smith underscored there is no single fix to the problem, but a key component is freeing up land supply. Looking ahead, he said he would be pushing for legislation to support major urban redevelopment projects in the New Year.
Yesterday, Smith said the government is also proposing reforms to better protect people buying and owning property under the Unit Titles Act.
"An important driver to these reforms is that the scale of unit title developments is increasing. The average complex size currently is only 10, but many new developments have more than 100 units," he said.
Consultation on the proposals, which include better disclosure rules at the time of purchase and strengthening body corporate governance, will run until March 2017.