Unlock Your Hidden Treasure
How it affects the value of your property
Auckland has a huge shortfall in houses, at one stage the estimated dwellings needed was 80,000. The UP released in November 2016 was developed to help solve this problem. It allows a lot of land in the established suburbs to be filled in. From 65m2 Minor Dwelling Units (MDU) to high-rise apartment buildings. These opportunities are not exclusive to big building companies; now even small investors including Mum and Dad family projects can make use of the new rules. Residual land on many existing properties can be improved to create an additional dwelling at for a good return on the cost, especially if you can get a loan on current interest rates.
Adding value to your asset
Infill housing allows the use of land within a built-up area for construction. The UP has relaxed the density rules, height to boundary angles and living courts. If you have land that meets these new rules then you can get a resource consent to use the land. Sometimes you may have to move the existing house or make minor modifications to get the best use. It’s easy to calculate if it’s worth doing before you even start to apply. It may only be a concept, but by getting the consent approved, the value of your property increases. You then have up to 5 years to start the project before the consent expires. In many cases the cost of the consent will return over 5 times what you spent to the value of the property. You can even sell the property with the consent approval if you don’t want to complete it yourself.
Financing your project.
The cost to obtain a resource consent depends on the size of each project. For example a Minor Dwelling (MDU) application could cost between $10-14,000. A house for land use and subdivision would be between $20-24,000. You’ll need a budget of the expected cost, especially if you’re requiring a loan from the bank. On current interest rates this loan may only cost $20-35.00 per week. Once you obtain the consent the investment will return tens of thousand dollars in value.
Expert advice and where to get it.
A good place to start is the help desk at Auckland City Council. They also have ample information on their website. Understanding the rules within rules can be a bit tricky so you may be advised by Council to seek more comprehensive information from professional consultants. Surveying companies, town planners and building consultants can give you a written report. This can cost you anywhere between $500 -1500 plus GST. Some building companies offer free reports to fit one of their houses on your land. This may limit you to their designs and cost. There are also some consultants that will do a short form report with a budget analysis on your property for free, and this could be tailored to suit your personal needs.
There’s probably been no better time to check out what you might have in the value of your extra lawn that you’ve been mowing. Interest rates are still affordable and the demand for housing is high. If you think you might have infill housing potential, then find out what the Auckland Unitary Plan offers you.
M.A. Real Estate & Construction Management
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