$11.3m spent on homes - but there's a problem

Good sections sell fast in Rotorua, according to Rotorua G J Gardner sales consultant Trevor Newbrook. Photo / Ben Fraser

Residential building consents in Rotorua topped $11m in the first quarter of the year, but there’s a problem. Experts reveal what’s causing headaches when it comes to building new homes.

More than $11 million worth of residential building consents have been granted in Rotorua in the first quarter of this year, nearly half of which were in March alone.

From January to March the value was up 38 per cent on the same time last year, with $11.3 million of residential consents issued. The number of residential consents was also up with 209 issued, compared to 164 in the first quarter of 2015.

Of the 106 residential building consents granted by Rotorua Lakes Council last month, 13 were for new dwellings - with experts in the building industry saying there are obstacles, such as lack of quality, buildable land, preventing people building homes from the ground up.

During a recent council meeting councillor Charles Sturt said there was still "two years' supply of sections on the market", but others say many of the sections have issues that significantly increase the cost of building.

Rotorua G J Gardner sales consultant Trevor Newbrook said there was a definite shortage of quality building sites in Rotorua.

"We are seeing a general shortage but on top of that some sections have geotechnical issues that create a lot of extra cost for people wanting to build.

"We know of several people in Rotorua wanting to build but there are these obstacles in the way stopping progress - the biggest issue being finding quality, suitable land to build on."

Mr Newbrook said it seemed like the number of houses being built was stagnating.

"When you compare it to the number of inquiries to build in places like Tauranga, our growth is minimal. It's a shame because we have all these people wanting to move to Rotorua but they have nowhere to live.

"With all the work going in to attracting people to the city, more needs to be done to ensure we can accommodate them."

Rotorua Master Builders Association spokesman Bill Clement said it was a combination of a whole raft of obstacles stopping people from building in Rotorua.

"Additional health and safety precautions get added to the cost of building along with a lot more requirements that need to be met before a buyer can get suitable land to build on.

"Each property requires a geotechnical report which is quite costly and that puts a lot of people off. Often people are having to shell out between $5000 and $10,000 before they even get the go-ahead to start building.

"We are getting more renovation jobs which are keeping us busy - I guess people would rather upgrade their current homes than build from the bottom up."

Mr Clement said he knew of people wanting to build who could not justify it "because of a whole raft of obstacles pushing the cost up".

Councillor Mike McVicker said the number of issued building consents "had turned a corner" but there was a long way to go.

"We are recording some growth but we are way behind and a major roadblock in Rotorua is good quality residential land.

"There may be a number of plots up for sale but many are not quality and would require a lot of extra work and money to make suitable for building. It's one of the major issues in Rotorua and as a result we are missing the boat."

Rotorua Chamber of Commerce chief executive Darrin Walsh said it was time for people who owned quality building land to either sell or build.

"People who are land-banking need to release the land or subdivide. Building is not everyone's cup of tea but with the real estate market going gang busters, building would help ease the pressure of people moving to Rotorua to buy."

Rotorua consents issued:

* March 2016: 106 residential consents worth $5.6m

* March 2015: 100 residential consents worth $4.2m

* Jan-March 2016: 209 residential consents worth $11.3m

* Jan-March 2015: 164 residential consents worth $8.2m