Property Law

Residential subdivision, site aggregation and higher density development

One of the real pressure points in the current urban real estate market is demand from downsizing owners for fewer bedroom, lower maintenance, smaller garden, centrally located properties. In many areas, where we act for buyers and sellers, demand well and truly exceeds supply. This is reflected in the apparently disproportionately higher prices that are being paid for properties that tick the boxes.

The cause of the shortage of supply is historic. Larger existing section sizes and high minimum lot area constraints in District Plans. Times change. Local authorities are now openly embracing, through plan changes, less restrictive minimum lot areas and site coverage requirements. Where non-complying subdivisions may previously have required resource consent now they may not. The site aggregation exercise includes preparing a new plan of subdivision with new lot boundaries, creating any new easements, cancellation of existing titles and issue of new ones.

The problem is that the existing house location on a particular lot may require that it is either moved or demolished to permit more intensive development. In some cases, one lot may not accommodate two new dwellings but two lots may, through site aggregation, accommodate three dwellings. We act for a number of residential property developers. They are, of course, alert to these methods and are actively seeking to identify prospective properties to purchase.

On its face it may seem like an opportunity for the desperate purchaser failing time and again to secure a property against fierce competition. A note of caution. Do not underestimate the skills, expertise, capital, debt funding, development cost, time and stress that can be involved. It can be done by individuals but many lack the advantages of full time property developers. Apart from experience, developers have a familiarity with Council District Plan and Building Code requirements, the cost of development including survey, design, professional fees, Council consent fees and construction costs. They have access to preferential supplier rates. They have established relationships with professional advisors including architects, contractors and subcontractors.

If, despite the barriers, you are considering doing your own development then talk to us first. We can help you level the playing field by giving you a lot of the assistance you will need as you embark on the process. This will include advice on funding structure options, District Plan constraints, aggregation strategies (where two or more lots are involved) and suggesting service providers. Contact Sam Walker to discuss your situation.