Case Studies

Auckland "RUB effect" (Rural Urban Boundary) 

If you had to pick one reason New Zealand house prices are so high it would be the imposition of a tight development boundary around Auckland.  Auckland prices feed right around the country as buyers and investors seek lower prices or better returns.  Check out this comparison of land on each side of the roadwhere the RUB is located in Beachlands. The price of bare land in the residential area is a staggering 35 times the price of the farmland.  The 860m2 section that is $670K in the residential zone would be $116K in the rural zone including $100K for services. This is a $550K premium for the land inside the RUB. There is your problem right there!

The Auckland Council is committed to protecting this boundary to the bitter end to force all development to be inside the city limits. Check out the comments by the head of the Planning Committee in this article https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12065709   Councillor Chris Darby stated "This decision is further evidence that we will defend the rural-urban boundary to ensure that there is good breathing space around the city limits of Auckland for people and nature." But at a cost of adding $550K per section it is complete madness. And because Chris Darby and his fellow Auckland Councillors stopped the Long Bay developers from creating more supply they just put up the prices of what they did have - check out this which makes the Beachlands example look like a bargain.

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  • Graeme Farr
    published this page 2020-01-21 15:25:46 +1300