Brought to you by the Valocity Research Team: Wayne Shum and James Wilson
Last year, the highest ever number of new homes were consented in New Zealand (48,899 to be exact), breaking 1974’s 47-year long record, which sat at 40,025. This focus on new builds is not surprising given the government’s National Policy Statement on Urban Development that enables greater housing density in major cities, and you only have to scan a news site to see the challenges the construction industry is facing with materials shortages to understand the extreme pressure this sector is under.
So, this got us thinking. With such significant surges in new builds, how has this impacted our ratio of urban vs rural land? Is Aotearoa still a nation predominantly of vast green fields and farms, or is the urban spread taking hold?
Firstly, we know that New Zealand has experienced strong population growth over the past two decades – an average of 1.3 per cent per annum. This is a large contributor to the drive for new builds. We also know that Covid is bringing Kiwis back home and they too have put upward pressure on the property market. Interestingly though, even with all the residential construction taking place, the proportion of land used for urban/residental homes in New Zealand sits at just 4.3 per cent, with 77 per cent of land being rural and farming, and 18 per cent of our land is utilised for parks, reserves and public amenities.
If we compare this to other countries; England has 5.9 per cent urban/residential and 62.8 per cent rural/farming. However, we are both a ways from Japan, which sits at 9 per cent urban/residential. So perhaps New Zealand can hang onto its green fields status yet.
A dive into the regions
Given New Zealand is a diverse country with densely populated urban centres and vast expanses of rural land, we thought we would see how the urban vs rural split looks by region.
No surprises that Auckland is the most urban region at 34.3 per cent, which reflects the demand from its growing population. Even still, Auckland’s scale remains tipped towards rural/farming at 45.5 per cent. This, compared to the least urban district being Gisborne at 1.4 per cent due to its 81 per cent rural/farming land.
Nelson is the second most urban region at 19.7 per cent, Whanganui is the most rural at 91.9 per cent, and Tasman wins the amenities prize by a long way at 55.9 per cent (think of all the national parks in that region).
Drilling further into Auckland, commercial and industrial makes up the majority of land use in Auckland and Manukau cities, both being the employment bases of the Auckland region. The proportion of commercial and industrial use land in other parts of Auckland are considerably lower.
Waitakere and North Shore both enjoy the highest proportion of urban/residential land at over 50 per cent, and Rodney and Franklin has the largest green belt. About 18 per cent of Auckland is used for resident amenities such as parks and schools.
We’re just like the rest of the western world, really
While some urban councils have plans to expand their urban fringes, there is (and will probably always be) strong pressure to maintain a green belt around our urban centres. Plus, extending infrastructure into these areas is not simple or cheap, so it’s unlikely that New Zealand’s urban land will suddenly increase to Japan’s proportions.
What we are seeing already, and will continue to see is an intensification of density within the urban limit – more townhouses and multi-level complexes being built as encouraged by the National Policy Statement on Urban Development. The reality is, New Zealand is no different to any other western nation, albeit we’ve had the luxury of enjoying more space for longer – this level of urban intensification is in line with international norms. If executed correctly, we can expect to see greater expansion along growth corridors that is supported by transport infrastructure such as mass transit. Watch this space!
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