The Indicators

More Industrial Land in Auckland to be Converted into Mixed-Use

High rise residential buildingLand surveyors in Auckland could soon become busier if the new Unitary Plan allows developers to build mixed-use properties such as apartments in land strictly designated for industrial purposes.

Factories and warehouses comprise some of the properties that may only be built in these lots, yet a housing shortage in the city has led local officials to reconsider the rule.

Balanced development

The prospects of converting more industrial land into residential communities increase the risk of disrupting the balance between employment and housing requirements. A result of rezoning land for more homes will likely lead to longer commuting time for workers.

Still, it appears that the momentum for building more apartments will not slow anytime soon, amid the Auckland Council’s incentives for developers’ mixed-use projects. The impact of this apparent priority on housing over non-residential properties has increased prices for industrial tenants, whether they plan to rent or buy warehouses in mixed-use sites. For instance, you will need to pay up to $5,000 per square metre if you plan to buy small industrial units in these areas, while rent may cost $165 per square metre.

Auckland prices

The Auckland Council said that rates for residential properties in outlying suburbs could increase more than average by 2018. Homes in the entire region have increased by 45 per cent on average, while growth in cheaper suburbs in the south and northwest grew by over 60 per cent.

The Unitary Plan partly served as one reason for the increase in higher rates, particularly properties that have popped up due to the plan.

While Auckland’s efforts to solve the housing crisis are good news, it should not come at the expense of industrial land. If the current pace of rezoning activity continues, some businesses may have no other choice and decide to leave the city and set up business elsewhere.