25 Aug 2016

'Insidious' land banking boom - Labour

10:36 am on 25 August 2016

Hundreds of properties advertised on Trade Me as being 'good for land banking' highlights the need to crackdown on speculators, the Labour Party says.

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Photo: RNZ / Todd Niall

A Trade Me search shows more than 300 properties around the country being promoted as great for land banking - more than a third of them in Auckland.

The practice of buying up land with the intention to sell or develop it in the future when it has increased in value is legal, but Labour Party leader Andrew Little said it was insidious.

22082016 Photo: Rebekah Parsons-King. Caucas run. Andrew Little

Labour Party leader Andrew Little Photo: RNZ / Rebekah Parsons-King

"It's happening even in the Special Housing Areas that the government said were subject to agreements to set aside land for development [for] getting houses on urgently.

"So we've got a silly situation where more and more land, it seems, is just being held for land banking.

"People are just riding the speculative wave and the government is doing nothing about getting that speculation out of the market and free it up to get people into homes."

Minister of Housing Nick Smith said land-banking has been around since "Adam was a cowboy".

Nick Smith outside one of the Special Housing Areas in Auckland

Minister of Housing Nick Smith. Photo: RNZ / Claire Eastham-Farrelly

"Buying up land on the fringes of towns with the potential for it to have development potential in [the] future is not a new phenomena, it's been around for a very long time.

"The solution to land banking is the National Policy Statement on urban development that requires freeing up more land so there is not monopoly rents and you don't get the sort of appreciation in capital value of land that has distorted markets like Auckland."

Dr Smith said as long as there were urban centres there would be land banking.

But he said what needed to happen was for the the regulatory environment to be set so there was not the continuing enormous increases in land value.

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