Govt land moves welcomed by builders

Developers welcome the government's aim in improving housing affordability. Photo / Paul Estcourt

The house-building sector has welcomed the Government's moves to solve the housing affordability crisis, saying it could be a big boost to the multibillion-dollar industry.

Philip King, Fletcher Building's investor relations manager, said freeing up land was the key.

"Any moves that will facilitate greater land availability for new housing construction, particularly in the Auckland region, are welcome," King said.

The Government announced yesterday that it would put a six-month time limit on councils processing consents for medium-sized projects, including housing developments, as part of a range of measures to make homes affordable.

Fletcher Residential is the sixth-largest builder of homes, putting up about 231 houses annually worth $61.8 million but its many divisions and subsidiaries sell materials including concrete, wallboard, insulation, benchtops, kitchen and bathroom fittings and roofing material.

King said the sector desperately needed more land for housing, particularly in Auckland.

"Initiatives that speed up the process through which new land is zoned and consented for development, and which helps to lower development costs, will contribute to lower costs for new houses," he said.

Grant Porteous, co-owner of Deacon Holdings which owns the country's largest house builder, G.J. Gardner, said people were crying out for land in Auckland and Hamilton.

"We'd welcome any initiatives. Good land must be made available," Porteous said.

Some sites zoned residential were too expensive to build on, particularly on the North Shore, because they were too steep.

"Each metre of fall can cost an extra $15,000 to build on so houses on a section with 5m of fall can cost an extra $50,000 to $60,000," Porteous said.

Auckland Council has zoned 18,500 sections ready to be built on but Porteous said many could stay empty for years. Some might be held by speculators or land bankers who either never planned to build or would build some time in the future. Other sites might be too steep or too expensive to build on, he said.

Speculators were buying partially built houses from the 25 G.J. Gardner franchise holders then on-selling them for an extra $50,000 or more, pushing up prices. "Speculators are getting very, very strong, making extra margins," he said.

Demand for new houses was increasing but he criticised new building site rules which demanded tougher measures to protect workers from falls. G.J. Gardner was all in favour of anything to help protect people on sites, he stressed, but mesh which had been tried out on some sites tripped people and 40kg sand bags dropped on one site had gone through the net.

Porteous wondered how a builder double that weight would be protected by the mesh.

The rules were not being enforced nationally, were administered in a haphazard way, and building firms had to come up with solutions but were given little guidance, he said.