The city is catching up with other major centres as it moves towards higher-density housing
Tauranga “was on the cusp of significant change” as it makes a big move towards higher-density housing, according to a property expert.
According to Stats NZ data, there were 74 multi-unit residential dwellings consented in the Bay of Plenty in November, that’s up 196% from 25 in the same month the prior year. Over the same period, building consents for houses plunged 51.8% from 195 to 94.
The number of multi-unit dwelling has continued its upward trend, rising from 477 in 2019 to 873 at the end of 2021 in the Bay of Plenty, with Tauranga, in particular, having six building consents issued by the council for 13 dwellings in November 2021 and eight for 74 dwellings in November 2022, NZ Herald reported.
The majority of the consents in Tauranga were in Gate Pā, Parkvale, and Pāpāmoa.
Morgan Jones, managing director of property services company Veros, said Tauranga was “on the cusp of pretty big significant change” and expected the trend of building upwards rather than outwards to continue.
“Auckland, Wellington, and Christchurch dominate the townhouse, flat, and apartment types of housing across New Zealand,” Jones said. “Hamilton in the last decade has started to provide a lot of one, two and three-storey duplexes, townhouses, and terraced homes, and Tauranga has always been a step behind those four cities.
“I think now we’re catching up, and with all the planning and everything that’s gone on locally over the next decade, if you look ahead for Tauranga as a city, our proportion of medium-density housing typologies that we’ll deliver will grow significantly as a proportion of our new housing supply.”
Tauranga being one of the most constrained land markets in the country was the biggest factor driving the upwards trend, Jones said, as this meant development blocks were rising in price due to competitiveness.
A “significant” amount of planning and infrastructure was required, however, to open up the city’s greenfield areas, particularly Te Tumu and Tauriko West, and “meaningful housing supply” was “still years away.”
The council has made it easier to construct multi-unit dwelling, Jones said, which he noted coincided with central government reforms which allow for three dwellings of up to three storeys in height without resource consent on most residential sections, NZ Herald reported.
Called Plan Change 33 in Tauranga, the policy also aimed to make it easier to develop apartments from up to four to six storeys high within a five to 10-minute walk of some commercial centres, with heights of eight storeys allowed along Cameron Rd.
Submissions on the plan were sent to the council last year, with an independent hearings panel set to consider them all and make recommendations to the council at a hearing scheduled for July.
“It’s going to be a massive change from what we’ve had in the past and in the history of Tauranga,” Jones said.
He pointed to the “worst market conditions” there have been for a decade as the biggest issue facing multi-unit dwelling development.
“We have the right planning framework, infrastructure planning and so on in place, largely across the city,” Jones said. “That happens to have coincided with the worst market conditions that we’ve had for delivering new housing in probably 10 years.
“We’ve got a whole lot of the pieces of the puzzle in place, but then we’ve got a market where development finances are hard, mortgage rates have gone up [and] construction prices, materials and labour force [costs] have gone up in a really constrained market. The actual ability to deliver new housing is really challenging.”
This shifting typology towards multi-unit dwellings in Tauranga, The Veros leader noted, was driving the housing market in places like Ōmokoroa, Te Puke, Rotorua, Whakatāne, Kawarau, Matamata, and Morrinsville.
“We’ve got a constrained market here to provide new housing, but a lot of people still want to live in the Bay,” Jones said. “The reality is, [Tauranga] is in a constrained land environment, [and] if you want a quarter-acre section with a standalone house, you actually need, these days, to look elsewhere, and that’s where you can pick up a different housing typology that’s probably more traditional for a different price point as well, in those different markets.
“Rotorua is one of those areas where the market’s still providing the standalone on medium-to-large sections that you probably can’t get at a comparable price point in Tauranga.”
Of the 74 dwellings issued in November, four were in Pāpāmoa, 10 in Parkvale and Brookfield, 48 in Gate Pā, and two in Mount Maunganui.
Anne Tolley, Tauranga City Council commission chair, said the rising number of applications for multi-units was “a step in the right direction.”
“Tauranga, like other major cities across New Zealand, is in the midst of a housing crisis, and we desperately need more housing choices for our community,” Tolley said. “We need to grow up as well as out to provide enough housing for our growing populations and to create a vibrant, thriving city.”
Iain White, environmental planning professor at University of Waikato, said Kiwis traditionally did not have to make “hard choices” about housing and space, except for the likes of Wellington, with its hilly topography and coast.
One main reason why New Zealand cities grew outwards rather than up was due to them expanding around the same time cars became popular, as compared to denser cities overseas which started before cars existed.
White said the consenting figures were “really positive” and could be great for the city centre, adding that more multi-unit dwellings meant more diversification in the housing stock.
“We have a lot of the same kind of house in New Zealand – having a diverse housing stock is good because it allows people to have different styles of living at different times of their life,” he told NZ Herald.
“If you’re in your 20s, you might want to live in a townhouse in the city centre; if you’re bringing up a family, you might want to be elsewhere, and if you’ve sold up and want [something] low maintenance, you might want an apartment in the city.
“[More] people living within walking distance of the city centre stimulates the local economy - when you get more hospitality, more retail, you see land values rise. One of the best things you can do to economically regenerate a city centre is to have more people living closer to it.”
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