Report shows Auckland land supply policy plays minimal role in property prices
This report was prepared by David Norman, Auckland Council Chief Economist.
Auckland’s Unitary Plan, the biggest change in rules about what and where you can build in New Zealand’s history, was introduced in November 2016. Until now, no studies had been done on whether the Unitary Plan and the Rural Urban Boundary (RUB) it introduced affected land prices.
Studies on the now-obsolete Metropolitan Urban Limit, using data from before the Unitary Plan was introduced, suggested the old planning rules have pushed up land prices by limiting how many new homes could be built inside the boundary.
The new study: An evidence-based approach: Does the Rural Urban Boundary impose a price premium on land inside it? shows the new planning policies have little to no impact on property prices.
The research analysed almost 37,000 property sales across Auckland since the Unitary Plan and RUB were introduced, and shows that the impact of the RUB is at most between 0.6% and 5.2% of the price of an average property with land that is inside the RUB.
This study provides a reliable evidence base for a grown-up conversation about whether the relatively small premium the RUB may place on property prices is justified given the considerable social costs of more expansive development that are not captured in property prices.