New homes no cheaper in rule change

New builds will be exempt from the recent lending restrictions. Photo / File

The cost of land and house packages in Northland won't come down despite changes to the new low deposit lending rules, most builders say.

Low deposit lending will fall outside the banks' 10 per cent limit if it is financing the construction of a new house or apartment.

The cheapest section in Whangarei is being advertised by Ray White for $75,000 in Amy Kate St in Tikipunga but it would cost around $250,000 to build a house on it.

Land covenants put in place by the developer means a transportable house cannot be shifted on to the section.

However, a modest three-bedroom transportable house on a section is possible on the fringes of towns in Northland, such as Waipu and One Tree Pt, for $250,000.

Although builders say it's too early to say whether the Reserve Bank's decision to exclude construction lending from low deposit restrictions will have an impact in the region, they expect some families to make a move into the housing market.

Home builders in Northland haven't yet experienced a surge in calls from people inquiring about affordable houses but said they would when the new rule was better understood.

Commentators believe the new rules were introduced to cool off the Auckland and Christchurch housing markets by increasing the housing stock.

There were 1756 homes of all types in Whangarei listed for sale on Trade Me as of yesterday, 3024 in the Far North and 1217 in Kaipara.

Among rental properties, 276 were available in Whangarei, 123 in the Far North and 25 in Kaipara.

Whangarei-based Sunshine Homes' owner Stuart Ross said it was difficult to buy sections under $100,000 and most were selling for between $100,000 and $200,000.

He said if a purchaser secured land for $100,000, a three-bedroom transportable home could be built and delivered on site for $100,000 and a further $50,000 would be needed to finish it off with utilities such as carpet and plumbing works.

A reduction in the sale of land or house packages was unlikely, he said.

"Our rates have already been hammered with the recession. Materials cost what it costs."

Peter Butler, owner of GJ Gardner in Whangarei, echoed similar sentiments, saying prices in Northland were already reasonable compared to other areas like Auckland.

He said people could get cheapest sections in Totara Parklands in Tikipunga, Ruakaka and One Tree Pt areas at about $155,000, with house and land packages hitting the $400,000 mark.

Since buying the business a year ago, he said the number of homes built or to be built by the franchise had increased 150 per cent - from six between November 2012 and 2013 to 21 from last month until November 2014.

Mark Dobbs of MD Construction said the new rules meant more houses and work for builders as well as opportunities for people to buy new properties. He said franchise builders had recently seen inquiries increasing not specifically related to the low-value-ratio announcement.