Auckland’s headstrong home-building market continues to defy the whims of planners and politicians by spreading out — but attempts to turn things around are ramping up.

Housing crisis - what housing crisis? Drive around Auckland's outskirts and you'd be forgiven for thinking the home building sector was ahead of the game as thousands of new-builds come on stream.

Swathes of plush new houses are nearing completion daily on all the city's boundaries.

The biggest of the new neighbourhoods, doing their best to look like communities but scarily homogeneous in character, include Millwater (Orewa), Long Bay, Hobsonville Pt, Flat Bush, Takanini and Hingaia (Karaka). The march of houses on greenfield sites amounts to the biggest expansion in a generation, spearheaded by Flat Bush where 36,000 people are expected to live by 2025. The sole brownfields development where housing is rising en masse is at Stonefields, the former Mt Wellington quarry.

The peripheral developments seem to fly in the face of efforts to rein in sprawl for a more compact city more suited to fast and frequent public transport than private cars and motorway crawls. But planners say they were all allowed for in the regional growth strategy agreed over a decade ago (albeit after court battles) and the goal remains to contain 60 per cent of future population growth within established suburbs.


For now, though, the distant neighbourhoods hold a disproportionate share of location choices for those looking for a new build, largely because apartment construction and urban renewal on brownfield sites in established suburbs have lagged.

And thousands more homes are on the horizon in Special Housing Areas (SHAs) declared at Hingaia, Takanini, Flat Bush, Orewa, Hobsonville, West Gate and Huapai, many alongside the current developments. They are mostly decent-sized family houses on postage-stamp sections - three-to-five bedrooms, multiple bathrooms and two-car internal garaging. Though most houses are just metres apart, Aucklanders' preference for single dwellings remains strong.

They have broad appeal - from recent migrants to empty-nesters looking for low maintenance but modern comforts and good insulation. Agents say some demand is coming from Aucklanders in older suburbs keen to cash in on soaring land values and move out to a smaller lot.

Across the motorway from Papakura, the last stage of the 440-site Karaka Harbourside Estate is nearing completion, where two-storey homes with a harbour view fetch more than $1 million. Dianne Cartmer, who is marketing the properties, says many buyers are local, including farmers looking to retire.

"But we are starting to attract people from the city because they can't afford to buy. They come out this way and get a 300sq m home for half the cost in the city."

Todd Property's Long Bay development is similarly upmarket, taking advantage of sea views and its adjoining regional park.

Several are master-planned developments, with covenants dictating minimum house sizes and choice of materials - right down to the letterbox. Others, notably Hobsonville Pt and Stonefields, promise a more affordable mix, with terraced housing, apartments and a wider range of sizes.

The seven subdivisions highlighted in the graphic opposite accounted for more than 10 per cent of building consents issued in the six months ended October 30, Auckland Council figures show.

Building consents are running at twice the level of five years ago when the credit crunch sent developers into hibernation or liquidation.

The council says about 6000 to 7000 houses are being built a year, roughly twice the level of 2011. But the city needs to be building 12,000 to 13,000 a year - the target agreed in the Housing Accord with the Government.

That so many houses are coming on stream now is in part thanks to a lag effect following the credit crunch and subsequent global financial crisis (GFC). House building flatlined for three years after 2008 - a combination of finance companies collapsing, banks refusing to lend and buyers sitting tight.

"One day the phone was ringing, the next day it stopped," says Andrew Olsen of Jalcon Homes, one of several builders working across the big subdivisions. It takes time between buyer (and lender) confidence returning and houses getting out of the ground, Olsen explains. Right now, the residential building sector is at full tilt and the challenges include skill shortages and capacity to expand.

Jalcon expects to build about 170 homes this year, about four times the number in 2011. Olsen says the difference is confidence - low interest rates, record immigration and a relatively buoyant economy mean homebuyers and lenders are willing to take more risk.

But different dynamics drive the timing of construction. Large-scale subdividers such as Todd Property and Fletcher Residential try to anticipate market demand and time construction accordingly, says Todd's managing director Evan Davies. The pair are partners at Stonefields while Todd is behind Long Bay and the mixed-use Ormiston town centre at Flat Bush.

Elsewhere, there are fewer spec builds - construction begins after homes are sold off the plans.

"The New Zealand property market runs through cycles," Davies says. "You have to keep an eye on how the cycle is going and we are a lot further through this one than three or four years ago. But there continues to be an excess of demand versus supply and we're confident it will continue for some time to come."

The new subdivisions are rising independently of the newly declared SHAs which stemmed from government alarm over the growing gap between housing supply and demand in Auckland. The Government blamed the Auckland Council's anti-sprawl policies for restricting land supply, with other obstacles such as consenting delays and lack of infrastructure. But the surge of stock coming on stream now predates the accord and SHAs and shows the slump in building was down more to demand factors - chiefly financial - than land supply.

At Hobsonville Pt, progress was slowed by the downturn but last year nearly 300 homes were sold. Hobsonville Land Co commercial manager Mark Fraser says strong market conditions have given builders the confidence to build high volumes.

"It's demand-driven - the passing of the GFC and improved economic fortunes have had a huge impact.

"Things started to recover in 2012 and there's been a massive change in sentiment since. But there's always a lag effect in the time it takes to get approval and build."

Fraser says even before the GFC, housing supply was not keeping pace with Auckland's population growth. "Current consenting activity is still less than it was at the last peak and now we have this migration surge - we actually are still not going fast enough."

Overall residential activity has yet to return to the record run of 2002 to 2004, when around 12,000 dwellings were consented each year. That peak was significantly down to inner-city apartment construction and terraced housing developments in Albany.

Most consents in recent years have been for standalone houses rather than apartments but at Stonefields up to 10 apartment blocks will rise over the next five to six years.

Achieving a more compact city is the challenge eluding planners and politicians, particularly given the opposition to high-density development in established suburbs. The proposed unitary plan, SHAs - where objection rights are narrowed - and council-led initiatives all promise to stem the outgoing tide.

Auckland Council chief operating officer Dean Kimpton predicts the development focus will gradually turn inwards: "We'll have an Auckland that grows vertically as well as horizontally," Kimpton says. "We can't just keep going out - we need to do both."

Two-thirds of the 4200ha of land given SHA status lies within the existing urban boundaries. The biggest of these include swathes of Otahuhu, Glen Innes-Tamaki, New Lynn and Albany, with smaller pockets in Takapuna and Northcote. The selected areas typically are close to public transport and motorways and have the necessary infrastructure - not just utilities but parks and libraries - in place, Kimpton says.

In Otahuhu, the council recently gave consent to a 36-unit terraced housing project in Atkinson Ave and an office building conversion in Park Ave into 82 residences.

The council's Housing Project Office says the Otahuhu coastal SHA (around the Tamaki River) has potential for 1000 new dwellings over time.

Council estimates show residential completions rising to 10,000 this year, 15,700 in 2016 and 21,000 in 2017. The 80 SHAs declared so far are tipped to provide up to half these new homes. Kimpton says around 77,000 new dwellings could be built within existing suburbs in the next 10 years.

There's enough available land to meet forecast needs for another six years and district plan variations could free up a further three years' supply, he says. "If we can keep up the momentum around variations and planning, the land supply issue should come off the table."

That leaves roadblocks such as consenting delays, infrastructure provision and the industry's capacity to boost production.

Todd's Davies says consenting processes have improved, but there's room for improvement. And he's worried about the impact of "severe budgetary constraints" on the council's ability to keep pace with underground services and other infrastructure. Last month the council formed a new agency, Development Auckland, which aims to work closely with developers to ease redevelopment of brownfield sites. Examples outlined by council chief Stephen Town range from co-ordinated planning and infrastructure provision to site amalgamations including council land and financing help. The council also promises to help with provision of affordable houses by guaranteeing bank loans for community housing providers.

As for the Government, it continues to oppose direct intervention to build more houses. But perhaps the biggest challenge will be overcoming Aucklanders' preference for a standalone house.