National Policy Statement likely to impact the market for lifestyle property
November 2022

National Policy Statement likely to impact the market for lifestyle property

New tabled regulations to restrict the conversion of agriculture or horticulture land for subdivision to residential or lifestyle property are likely to impact the real estate market.

Aiming to ensure that highly productive land remains in primary production, both now and for future generations, the changes have been in development since 2019. If implemented, they will require councils to identify, map and manage such land to ensure it remains in primary production.

Announced in September, the new National Policy Statement for Highly Productive Land (NPS-HPL) was prepared to retain New Zealand’s most favourable soils for food and fibre production, providing direction to improve the way the most productive land is managed under the Resource Management Act 1991 (RMA).

Under the Policy Statement, councils will receive clear and consistent guidance on how to map and zone highly productive land, and manage the subdivision, use and development of this non-renewable resource. Most localities with such land are close to major urban areas and in limited supply.

Generally the soils have developed from river silts, based on years of flooding, augmented by the gradual addition of organic matter from plants. Pukekohe soils, where much of Auckland’s food is sourced, are a notable exception, developed initially from volcanic ash falls up to 25,000 years ago, plus the subsequent addition of organic matter.

While these soils extend into the Waikato, Pukekohe soils, which are closer to Auckland and enjoy milder winters, achieve more lucrative production, are considered more valuable, and are under greater threat due to their desirability for subdivision.

Areas of highly productive and suitable lands around most other major urban centres are under similar pressure for development.

On the face of it, the Policy Statement appears to make the development of lifestyle subdivisions more challenging, at least in those localities, which by their proximity to the cities their land has traditionally served, tend to be heavily sought after.

Policies in the statement include: that highly productive land is recognised as a resource with finite characteristics and long-term values for land-based primary production; that the identification and management of highly productive land is undertaken in an integrated way that considers the interactions with freshwater management and urban development; and that the use of highly productive land for land-based primary production is prioritised and supported.

In some localities impact on the lifestyle property market is likely to include reducing, if not completely eliminating, the potential for land banking, as well as restricting the development of new lifestyle properties.

Anyone seeking to buy or sell such land needs to understand how to manage these changing environmental regulations, and how regional councils propose to administer any consequential changes.

Expert professional advice, particularly from a suitably qualified urban planner or surveyor, is recommended.

David Henderson is the Business Manager for PGG Wrightson Real Estate Limited

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