NPS-UDC Monitoring market indicators
NPS-UDC policy PB6 by 1 June 2017: local authorities shall monitor a range of indicators on a quarterly basis including: Prices and rents for housing residential land and business land by location and types, and changes in these prices and rents over time The number of resource consents and building consents granted for urban development relative to growth in population Indicators of housing affordability
NPS-UDC Policy PB7 by 31 December 2017: Local authorities shall use information provided by indicators of price efficiency in their land and development market, such as price differentials between zones, to understand how well the market is functioning and how planning may affect this and when additional development capacity might be needed.
We will support you By providing indicators and guidance throughout 2017 Developed with a technical advisory group And forum of high and medium growth councils
OVERVIEW OF INDICATORS AND DATA SUPPLY james.hogan@mbie.govt.nz
PB6 (Simpler) indicators Price trends Home price trends Trends in land values Trends in rents CoreLogic and MBIE Tenancy Bond Data Low Levels of Geographic Disaggregation Publish in End of January 2017
PB6 (Simpler) indicators Housing Affordability Measure Under Development within Statistics New Zealand s Data Lab Measure of Housing Difficulty for First Home Buyers Measure of Housing Difficulty for Renters Building Consents to Population Growth
PB7 (Price efficiency) indicators Price differentials: Rural/Urban Business/Residential Residential zones Land ownership concentration More complicated and less intuitive Developed in conjunction with the Treasury Published by end of June Extensive consultation process
Support Online Data in Open Source Formats Methodology Documents, Open Source Code, Guidance/Usage Materials Focus is on usability and understandability
INTERPRETING AND RESPONDING TO MARKET INDICATORS pnunns@mrcagney.com
Price indicators framework
Simple price indicators (Policy PB6) Measures of price trends and consenting activity provide a first cut view on local housing and business floorspace markets Prices Consents Narrative Rising demand for housing Possible supply constraint Falling demand for housing Development reducing prices
Sophisticated indicators (Policy PB7) Provide more targeted information about market functioning and the impact of planning policies For instance: Investigating the impact of concentrated land ownership More clearly linking price outcomes to planning policies excluding the effects of other factors like interest rates
Market concentration indicator Info on concentrated land ownership can aid plan-making by: Understanding where land-banking may hold up development Identifying areas for rezoning where there may be more competition
Efficient price indicators Local prices can provide focused, relevant evidence on where rules are too tight Example: Sudden jumps in prices across zone boundaries
BUT HOW SHOULD WE RESPOND?
Prices as an input to H/B Assessments To better understand: Demands in different locations, and for houses vs apartments Commercial feasibility of development capacity Unmet needs for housing or business space The costs and benefits of regulations and S32 reports
Release of development capacity Councils are not tied to a single response to price indicators If indicators indicate a shortfall in capacity, councils can choose whether to: Release greenfield land for development Rezone existing urban areas to increase capacity Change specific regulations Choices can take into account local circumstances
For further information