2 million new homes for Auckland? Don’t hold your breath

Sunday, 14 September 2025

Tension has filled the suburbs of New Zealand’s biggest city over recent weeks. There’s been fiery public meetings, “finger gun” threats, and feuding councillors, and generational battlelines have been drawn.

The cause? Auckland Council’s latest proposed planning rules. They are intended to increase the city’s build capacity, and help ease its well-documented housing affordability problem.

That should not be controversial, but as with the passage of the Auckland Unitary Plan 10 years ago it has become so, and very similar claims are being made about what is proposed.

In order to withdraw from the Medium Density Residential Standards (MDRS), introduced by the previous Government back in 2021, Auckland Council agreed to provide a replacement plan to “Plan Change 78”.

It is the replacement plan which has triggered the latest round of outrage. The plan allows for capacity for up to 2 million homes over the next 30 years - as required by the Government.

It does that by allowing taller buildings (of 10 or 15 storeys) in new catchment areas that are within 10 minutes walk of a train station or town centre, and six storey buildings on either side of the road on major bus routes.

Those new catchment areas zoned for 10 to 15 storey apartment towers include inner city “character” suburbs from Remuera to Mt Albert, and lots of homeowners in those suburbs don’t like that idea.

Housing Minister Chris Bishop and Auckland Council have each released rebuttals to the claims that have emerged from the furore.

So the Star-Times asked developers for their views on the plan, and found they were more circumspect about the likely impact of the plan than most, although all said it would help boost supply.

Leonie Freeman is chief executive of the Property Council, which has more than 550 member companies, including some of the largest commercial and residential developers in the country. She says greater density around trains and buses is a smart move as it cuts emissions, uses infrastructure more efficiently, and helps address the housing shortage.

Building up makes sense as more homes in the city mean more people can live, work, and play in a thriving CBD, she says. “The overall direction of Auckland Council is sound. But success will depend on how well the standards are implemented, and they won’t happen overnight,” she says.

“Red tape, funding constraints, and complex consenting processes mean progress could still take years. Developers take on significant risk with large-scale projects, and they won’t proceed unless the policy settings are clear and consistent. Frequent flip-flopping of planning rules only adds uncertainty.”

Successful intensification requires more than just zoning changes, and planning rules, consenting, feasibility, financing, and infrastructure investment all have to work in concert, she says.

“Infrastructure is the elephant in the room. Housing can’t go up if pipes, power and transport don’t keep up. Right now, we don’t have the level of infrastructure investment required to match Auckland’s growth.

“Developers are willing to pay their fair share, but it’s crucial to make sure those contributions actually deliver the pipes, roads and connections communities need.

“Councils and central government must prioritise investment and coordination, otherwise intensification risks becoming just lines on a map, not homes on the ground.”

Freeman says housing is not a tap that can just be turned on, so even with new rules, it takes years to secure land, arrange funding, navigate consents, and build.

“Change will be gradual, not a tidal wave. And the real risk isn’t too many homes at once, it’s not enough homes, fast enough. Auckland is already short of housing, and without faster delivery mechanisms we risk falling further behind.”

Auckland property developer David Whitburn, a former president of the Auckland Property Investors Association, agrees. He says just because an area is zoned for intensification it does not mean multi-storey blocks will be built on it.

“Developers need to get the finance for a big project, and even if they get finance the planned homes might not sell well off the plan so the development doesn’t progress as it is not financially feasible.”

Building up around walkable transit catchment areas is sensible, and much of the critique from the plans’ opponents is not realistic, and the opponents just do not accept that things need to change, he says.

“The reality is that they want to enable urban sprawl because they don’t want intensification to impact their quarter acre inner city dreams. But we have to provide affordable housing choices for future generations, and that means providing more decent, well-located places to live in future.”

Whitburn says at the height of the recent boom there was a record 21,688 new home consents in Auckland in the year to May 2022 and about 90% of them were built, and as Mayor Wayne Brown has said, at that rate it would take about 100 years to hit 2 million.

“The latest consents data puts them at 14,347 in the year to July, so a sudden massive surge in intensified building is unlikely - even when the construction industry ramps up again. It’s scare-mongering to suggest the plan will lead to rapid unmanageable growth in certain suburbs.”

It is more cost-effective to invest in improving existing infrastructure than in putting in new infrastructure in greenfield areas, he adds.

“And with Watercare, Auckland City, where most of the walkable catchment areas are, generally has capacity for growth as opposed to some outer areas out west and on the North Shore which have limitations.”

Simplicity Living managing director Shane Brealey says zoning to boost supply in intensified areas around transit hubs makes sense, and will increase the number of homes developers can offer.

“For example, we have an application with Auckland Council to vary the existing consent on our Morningside development in Auckland to add a couple of floors. We are looking at going from 7-8 storeys to 9-10 storeys.

“It will add another 60 new homes to the 264 homes already coming in that development, which is 150 metres from the Morningside train station.”

But it is hard to do these types of large-scale builds as the bigger the project the stronger the balance sheet has to be, and that is why there are not many of these developments in New Zealand, he says.

“Simplicity is in a funding space where it can do these large-scale build-to-rent developments, but most developments on this scale are build-to-sell, and pre-sales of about 70% of the total number are needed to get banks over the line to cover the development costs.

“It’s not easy to get those pre-sales, especially in the current environment, and that is why townhouse developments are so popular. It is much easier to pre-sell seven townhouses than it is 200 apartments.”

The reality is there are only a few large development companies in New Zealand who can do these types of builds, and that is why Auckland will not be hit by an immediate, huge surge in supply due to the plan, Brealey says.

“Hopefully, we will see an increase in supply but Auckland will be waiting a long time before it sees 2 million new homes.

“The intensification won’t happen at the scale or rate those concerned about it believe - because who is going to do it, and how will they stack up the finances to proceed? The limitations in New Zealand are very real.”

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