Infrastructure New Zealand have prepared a proposal investigating the build of a new Auckland satellite city around Paerata, north of Pukehohe.

Property Institute of New Zealand chief executive, Ashley Church, is “applauding” the suggestion, saying it represents “the sort of big picture thinking that will ultimately resolve the Auckland Housing crisis”.

Housing Minister Phil Twyford has showed interest in the concept, possibly as part of Labour’s new $2 billion Kiwibuild programme to construct 10,000 new homes a year for 10 years.

Church says that the plan ticks most of the boxes required to solve Auckland’s housing shortage:

“It envisages getting a very large number of homes built relatively quickly, it focuses on Auckland but proposes developing in an area where land prices are still reasonably priced, and it has a strong focus on providing lower cost housing for first home buyers”.

The report suggests around 30,000 homes could be built in Paerata, making use of prefab construction, at an average cost of about $450,00 each. This contrasts with median prices around Auckland of about $825,000 at the moment.

“Paerata’s land is still cheap, but rising quickly,” the report says.

“If bought at today’s prices, an average section of raw land would cost $17,000. Three years ago, it cost $10,000…If authorities can move before the market in Paerata, land value can be captured and used to offset infrastructure costs.”

“We estimate regional road and water investment as low as $700 million could be sufficient to add 30,000 dwellings to current Paerata plans. This is less than the estimated $1 billion of development contributions the city would generate. All other locations we examine [in the report] would likely cost more to service than the Auckland Council would receive in funding. Growth can pay for itself, if it is well planned.”

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