The opportunities and the limitations.
Property Subdivision in a nut shell is the process of dividing land or sections of it into smaller parts that make them easier to sell or carryout development work on. The land thus divided and worked upon is more often called a development, or project or sometimes even a gated community with a charming name. They are all subdivisions none the less.Subdividing land works at various levels. A private land owner could decide that his or her land is big enough to be parcelled into smaller bits. The said land owner could then sell part or parts of it, build new premises on it or divide it up among the kids. Such New Home Subdivisions then become separate entities with their own title, address, unique access point, utility services and taxes.
Subdivisions happen on a far grander scale too. The Auckland Council’s recent report on available land for residential purposes states that there are just about 1900 vacant plots of land already subdivided and ready for building on right now. Subdividing can only take place when the city council has provided bulk utility supplies (clean water, waste water) to the border of the land. To develop the land the investor must have a subdivision plan that includes infrastructure development like roads, and water supply to individual lots. The Auckland Council reckons that it has enough Greenfield land ready to be subdivided into 15,000 new dwelling plots.
http://www.dbh.govt.nz/UserFiles/File/Publications/Sector/pdf/residential-land-available-in-auckland-report.pdf
For a city that foresees a need for 400,000 new dwellings over the next 30 years, these figures don’t add up. And for land owners this is indeed a great opportunity with demand set to sore to dizzy heights. However, what owners can do with their land will come under various restrictions depending on Auckland’s strict zoning parameters as well as the Auckland Council’s Unitary Plan.
Among Auckland’s various zoning restrictions is the Metropolitan Urban Limit (MUL). It defines the border between urban and rural Auckland. By some estimates, land just within the MUL is up to 10 times more expensive than just outside it (Grimes and Liang 2009). The Current price for the most desirable sized plots (350-650m2) within the established urban limit has more than tripled during the decade ending in 2012, A typical plot would go for something like NZ$ 325,000 or so. Land now accounts for around 60% of the cost of an Auckland house, compared to 40% in the rest of the country.
(http://www.productivity.govt.nz/sites/default/files/research-note-mar-13-auckland-mul.pdf)
Even a relatively small plot of land can be subdivided for a healthy sum. Enlist the services of a property subdivision company to find out if your land is feasible.
The rural zones of Auckland come with building restrictions too. New subdivisions in Auckland, especially in the rural regions, will have to comply with the Auckland Council’s Unitary Plan. The restrictions are basically about what kind of dwelling, how many, their size, height and intended population density. Rural Auckland is zoned into five distinct categories.
Rural Production Zone.
Most of Auckland’s rural production and industry is within this zone. With the focus on maintaining this productive capacity, the rural production zone will be the principal zone for donor and receiver sites for transferable rural site subdivisions. Together with boundary adjustments and relocations, this will form the basis of methods to be employed in rural subdivision.
Mixed Rural Zone
Similar to Rural Production Zones, Mixed Rural Zones are however smaller and more contained. These zones are expected to foster rural lifestyle, tourism and production practices on a small scale. Subdivision activities in these areas should focus on widening the diversity of rural uses.
Rural Coastal Zones
For their value to ecology and the beauty of the landscape, the Rural Coastal Zones will have certain restrictions on further development. However the opportunities lay in supporting the coastal environment through recreational activities. Appropriate rural activities are encouraged throughout this zone.
Countryside Living Zone
The principal receiver zone for transferable rural site subdivisions and the only receiving area for transfers created by the protection of ecologically significant or environmentally sensitive areas. Countryside living zones present rural residential lifestyle development opportunities and are typically situated close to urban Auckland or rural and coastal towns. The subdivision process may prove complicated in these areas because of the variety in topography, landscape character and the size of the sites.
Rural Conservation Zone
While this zone will encourage established rural activities, new developments are unlikely to find any support. These zones have been designed and designated to protect and maintain the unique characteristics of rural life. Land owners in these areas will find the scope for subdivision to be narrow and painful.
Apart from these restrictions, land owners would also want to consider limits to the type of activities permitted and building restrictions both for the number of dwelling per site as well as their size.
Refer http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/plansstrategies/unitaryplan/Documents/Key%20topics%20in%20detail/upkeytopicsrurallanduses.PDF for the complete list.
Herein lie the opportunities as well as the limits. However it is plain that the property market in Auckland will maintain a healthy state of demand over the coming years. For people with land, a trip to the property subdivider’s office is well worth the trip.