Rotorua's subdivision consents booming

Builder Matthew McGovern (left) and Urbo Homes co-owner Martin Dobbe are working on a home in Holden's Bay. Photo/Stephen Parker

Subdivision consents in Rotorua are booming, meaning there could soon be more land on the market for those looking to build.

However one local builder says it is still a long way from there to houses, while real estate agents are hoping developers will take precautions against flooding the market.

According to a report to this week's Rotorua Lakes Council operations and monitoring committee the number of subdivision consents issued for the financial year to date is 29 per cent higher than at the same time last year.

This financial year, through to October 25, 91 lots had been consented.

Council consent solutions planning lead Simon Bell said the main reason for the increase was an uptake in the market but also a willingness from the council to work with land developers.

When he started in 2013 the number of subdivisions being consented was low.

"I think we had consented, in the last two years, 12 lots.

"[Now] the value of the land enables them to get a return, a few years ago it just didn't make sense."

So far this calendar year 193 lots have been consented.

Bell said the council was trying to create an "easier pathway to a good outcome" by being proactive in creating relationships with its consultants.

"[Developers] risk everything, and if we can help make our bit a little bit easier for them and give them the certainty they need that's our job done.

"It's not all us, but we are making a difference too, I am proud of that."

Bell said he hoped this was only the start of something that was going to be "bigger and better".

"It's a town on the up. The key is those lots that are consented go to title and have homes built on them."

At 9am on Monday there were 48 new potential sections being sold on Trade Me as part of larger land blocks.

Bell said the council had four to five additional greenfield residential developments in the pre-application phase.

A greenfield residential development is a larger block of sections in an open environment.

Traditionally Rotorua has seen a lot of infill subdivision.

"Greenfield subdivision is like creating new communities," Bell said.

Council group manager operations Henry Weston said he was seeing the consenting team working proactively.

"Traditionally council staff would sit at their desks and wait for an application to come in."

He said due to Rotorua's population growth the council was under a "new pressure" to address housing.

"We are starting to see interest in affordable housing, how good affordable housing can be enabled and that's quite exciting."

Steve Lovegrove, Professionals McDowell Real Estate co-owner and principal, said the change in consent numbers was "massive".

"From 10-20 a year to nearly 200 is a real sign of confidence in our real estate market and in Rotorua itself."

He said developers needed to be aware that the market was a little softer now.

"If these all come on the market at the same time there will be supply beyond demand.

"There is a surprising amount of demand out there, if only a few sections are offered up at a time they will be snapped up."

Lovegrove said the Baxendale subdivision was the only recent example of a greenfield subdivision.

"There is a lot of risk and uncertainty in that space in general.

"The Rotorua market is difficult to understand. One suburb can have every end of the spectrum.

"Personally I'd love to see lots of dynamic new styles of development."

Urbo Homes Rotorua co-owner Martin Dobbe was "really guarded" about Rotorua and didn't want to see "unencumbered development".

"We just have to be careful. I'd hate to see it if we were oversupplied."

Dobbe said he didn't want to see Rotorua become like Hamilton or Tauranga where there was a boom of "similar houses one after the other".

"I think it's a pretty special place.

"These consents which have gone out sound like great figures and the developer going out to spend the money is a huge commitment from them."

He said it could be a long while before houses go up on each of those sections.

Realty Group chief executive Simon Anderson said it was exciting to see growth in Rotorua but he also had concerns about a potential oversupply.

"We haven't seen this kind of development in Rotorua for years.

"By the time the consents come through it could be two years before we see the houses built."

Anderson said it was good to see more lifestyle properties coming on to the market.

"People always want their own bit of land to build their dream home."

Rotorua-based developer Holmes Group spokesman Ryan Holmes said they used to do a lot of subdivisions but the price expectations had pushed them out of the market.

"The trouble is a lot of the land that's out there is held by farmers who have had it for a long time.

"That raw land is going for so much money, it's actually not worth the risk."

He said this led to more expensive sections coming to market which was "realistically not what people are looking for".