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Urban development report helps prepare for future growth

In a first for Marlborough, the Council has released its National Policy Statement on Urban Development Capacity quarterly monitoring report. The report measures housing and business development market indicators for the quarter October to December 2017 and provides historic trends for the last 10 years.

Council is required to monitor these indicators quarterly under the National Policy Statement for Urban Development Capacity because Blenheim is experiencing a ‘medium level’ of urban growth, based on its current population growth and projected level of urban development.

Mayor John Leggett says the report measures trends in demographics, house prices and rents, affordability, and demand and supply for residential and business development, including seasonal worker accommodation.

“The information in the report will help us monitor trends over time and inform Council’s planning for growth in the housing and commercial market, and identify how much land is needed to meet that growth.”

“We need to ensure that our planning regulations are not unintentionally constraining urban development,” Mayor Leggett said.

Council’s Strategic Planning and Economic Development Manager Neil Henry says it’s important Council is up to speed on urban development activity so we can provide sufficient zoned land to meet housing and business market demand.”

“Going forward, the quarterly reports and other information will inform a more comprehensive three-yearly housing and business development capacity assessment, the first of which is due by 31 December 2018.”

Quarterly report key findings

Population: In the year to June 2017 Marlborough’s resident population grew by 1.5% to an estimated 46,200, and is projected to grow by 2,500 over the next 25 years.

Labour demand: Marlborough has the highest forecast growth in labour demand - anticipating an extra 3,600 employees in the period June 2017 to May 2020. The wine industry estimates a 35% increase in demand for RSE workers over the next two years.

House prices and rents: House prices have increased at a similar rate as other regions over the past ten years, with steep increases between 2002 and 2007, and again in 2016/17. House sale prices rose more than 10% in Blenheim, and 8% in Marlborough in the year to December 2017, but prices leveled off in the last quarter of 2017. Rents have also risen over the past ten years, but at a slightly slower rate.

Affordability: Housing affordability is an issue nationwide. MBIE’s housing affordability measure shows 77% of potential first home buyer households nationwide would have below average income after meeting housing costs. Marlborough is just below the national average at 74%. Comparisons indicate that fewer first home buyer and renting households in Marlborough have a below average income after meeting housing costs than in many other regions in New Zealand. This could be reflective of a combination of Marlborough’s reasonable house prices and very low rate of unemployment.

Demand and supply for residential: A recent review of residential section availability estimated that with the current supply of residential zoned (or proposed) land Blenheim has 26.5 years of supply available (based on medium population growth projections). Building consents appear to be mostly keeping pace with household growth, and a price-cost ratio indicator provided by MBIE suggests that the supply of sections is responsive to demand overall, although both indicators show increased pressure on supply in the past three years, and particularly in 2017. Council issued 188 building consents for new dwellings in the Blenheim urban area in 2017, and 130 in 2016 - a significant increase on previous years.

Seasonal Work: Marlborough’s demand for seasonal workers is expected to grow in the next two years. Those seasonal workers not housed in RSE approved accommodation stay in approved backpacker beds, backpacker hostels, motels and in private suburban rentals. The direct impact of this on the rental and housing market is unknown, but should be investigated further. The supply of specific worker accommodation is increasing. There have recently been resource consents approved that will increase capacity by over 750 beds in central Blenheim and Seddon.

Information contained in the report has been sourced from the Ministry for Business, Innovation and Employment, Statistics NZ, CoreLogic, and Marlborough District Council.

A copy of the its National Policy Statement on Urban Development Capacity quarterly monitoring report is attached to this email.



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