SIGNIFICANT PLANNING UPDATES – URBAN RESIDENTIAL ZONES

We have some significant updates regarding Plan Change 78 (PC78) that will affect urban residential zones in Auckland. The Independent Hearing Panel and the Minister for the Environment have now until March 31, 2025, to make a decision on PC78.Plan Change 78 aims to rewrite the planning controls that govern urban residential zones and introduces the terms “MDRS” (Medium Density Residential Standards) and “Walkable Catchments” as anticipated outcomes. However, until the council reaches a decision on PC78, individuals interested in utilising these controls on their sites will not be able to apply to the council.

This delay is likely to lead to two possible scenarios:

• Developers may choose to wait it out until the decision is made.
• Alternatively, developers can act now and either utilise the existing Auckland Unitary Plan (AUP) rules or consider implementing the MDRS rules in areas where they have immediate legal effect.

In light of these circumstances, Sentinel Planning, in collaboration with Berry Simons Environmental Law, has initiated a legal case against Auckland Council. This case challenges the council’s interpretation and use of qualifying matters, particularly regarding Volcanic viewshafts, Auckland Airport Designations, and overland flow paths. These qualifying matters currently prevent the immediate legal effect of MDRS controls on sites with three or fewer dwellings.

Our legal case argues that all these matters are already designated or regulated by the existing AUP and, according to legislation, only new qualifying matters should not have immediate legal effect. Given the recent one-year delay, this case has become even more crucial in addressing the concerns surrounding the interpretation of qualifying matters by the council.

What we are seeing with regard to the property cycle is that the well-heeled developers are actively acquiring sites, both residential and commercial, and appear to be of the view that now is the best time to buy.  We agree with those sentiments and consider that there are two types of property cycles going on at the moment.  The developers’ cycle in terms of a clock is at 6:30 or even 7:00, which means that it is considered to be on the way back up.  The developer’s clock is always ahead of the Mum and Dad’s clock, which is at around 5:30 now.  The developer’s view is that land is as cheap as it will get at the moment, and they are looking to secure land for their next project in the anticipation that with rents rising, interest rates (coming down shortly) and construction prices flattening that this will result in more positive yields when selling their completed projects.  The main reason that there are not more developers doing this right now is the lack of pre-sale demand.  As such, it is only the more established developers who are taking this current opportunity.

The types of developments coming forward have also changed.  The two-story 75m2 terraced option around a central carpark which had proved to be very popular since the inception of the AUP, has partly made way for developments on slightly smaller sites of three to four dwellings comprising 3-4 bedrooms and a single internal garage.  This is due to the yields being generated and also with respect to taking advantage of the new planning rules that can apply to some sites right now.

Please don’t hesitate to contact Sentinel Planning regarding any development needs that you may have https://www.sentinelplanning.co.nz/

Simon O’Connor
Managing Director