Take note of urban change drivers

Knowing what drives urban change and how that impacts on housing can pay off for investors.

Tuesday, December 15th 2015, 4:00AM

by Miriam Bell

A new report which explores the drivers of urban change in New Zealand should be useful for investors, according to one of the authors.

The report looks at issues like compact versus dispersed urban development, infrastructure renewal, transport patterns and healthy, affordable housing.

It focuses on Auckland, Hamilton, the Wellington region, Dunedin and Christchurch.

University of Otago Professor Philippa Howden-Chapman said the report would help investors see what the urban development trends in these centres are.

“This enables them to make better decisions when buying or building housing in these areas.”

For example, it paid for investors to know that, despite New Zealanders’ cultural preference for stand-alone houses, there is strong and growing demand for alternative options, particularly in Auckland and Wellington.

This demand comes from both younger people and older people – both groups which fit into New Zealand’s increasing number of non-family households who don’t want multi-bedroom houses.

Howden-Chapman said many in these demographic groups want to live in well-built townhouses and apartments which are situated near public transport hubs and amenities.

“Given a major generational shift which has seen a big drop in home ownership, this indicates the townhouse/apartment market presents a still untapped market for landlords.”

It makes sense for investors to look at drivers of urban change when doing their research, Auckland Property Investors Association president Andrew Bruce agreed.

For example, he likes to invest in areas which he knows are going to see infrastructure spending – like significant road widening, which equates to improved traffic flow, or public hospital improvements.

Bruce said investors should note there is a huge amount of infrastructure spending planned for Auckland at the moment.

The Commercial Bay development in the downtown CBD, the Convention Centre, the City Rail Link tunnel and the Wynyard Quarter are just some of the big ticket projects in the works.

The planned spending and development means these areas will change for the better over the long term, he said.

“As an investor, I am happy to wait for the benefits infrastructure changes will bring to such areas over the long term.”

Some of the benefits of infrastructure spending are improved transport gateways and the creation of jobs.

Both of these, in turn, attract more people to the area and those people need somewhere to live, said Bruce.

“The Waterview Tunnel is a good example of this. You just need to look at the impact it is having on surrounding areas like Te Atatu Peninsula.”

To this end, Auckland investors also need to know about the Unitary Plan and what happens with it, he added.

“It is in the best interests of the city that we intensify and develop round major transport nodes. Investors should be aware of this and keep an eye on what is happening in areas they are interested in.”

*Howden-Chapman said there will be a series of public presentations on the “Drivers for Urban Change” report around the country next year.

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