News and Publications

Property News - 22 May 2017

Construction costs concern

Auckland commercial property developers are being hit the hardest by increasing construction costs and capacity constraints, according to a new market commentary released by Colliers International’s latest monthly New Zealand Research Report.

Research Manager, Leo Lee, says developers and consultants have reported higher than indexed cost inflation on some projects, particularly in Auckland.

He says there are indications that the annual growth in commercial construction costs is at 5.6% – higher than the 26 year average.

Lee notes that the NZIER has forecast non-residential construction cost inflation will peak at 7.4% by September, before easing back to 4% by the end of next year.

(Commercial Property NZ newsletter, Wednesday 17 May 2017)

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High level of pollution at Springs’ creek

High E-coli levels have been found in a creek that flows into the reserve that holds the country’s largest freshwater springs.

The monitoring of Fish Creek, which flows into Te Waikoropupu Springs Reserve in Golden Bay, revealed the water is subject to severe levels of pollution from dairy farm runoff during rain events.

Te Waikoropupu Springs is the southern hemisphere’s largest coldwater springs and has some of the clearest waters ever measured on earth.

Levels as high as 20,000 E-coli per 100 ml were discovered at the boundary where the creek runs into the reserve after testing by by Friends of Golden Bay at four different sites from November 2016 – April, 2017.

The new National Policy Statement for Freshwater Management states that safe swimmable levels should not exceed 540 E-coli per 100 ml and for drinking it is less than 1 E-coli per 100 ml.

(The Nelson Mail, Monday 15 May 2017)

Little vows to close tax loophole

Labour is lining up property speculators by clamping down on tax loopholes to even the playing field in favour of first-home buyers.

In a hard-hitting speech to Labour’s election year congress, leader Andrew Little said the loophole that let property speculators offset losses from their rentals against other income for tax purposes would be closed.

Under the proposed change so called ‘‘mum and dad’’ investors who bought rentals as a long-term investment would not be affected as most of them did not use the loophole, Little said. Those that did would have time to adjust.

New Zealand could not defend handing out subsidies to property speculators when most young couples could not afford to buy their first home, Little said.

The change would save about $150 million a year once fully implemented, with the money being diverted to Labour’s healthy homes policy.

Homeowners and landlords would be able to get up to $2000 towards the cost of upgrading insulation to modern standards or installing heating. Over a decade, that would add up to 600,000 homes, costing $1.2 billion.

Property Institute of New Zealand chief executive Ashley Church labelled the tax crackdown a cynical electoral ploy that risked slowing housing supply.

Church also strongly rejected Little’s claim that Labour’s policy would ‘‘create a level playing field for home buyers and help families get a fair shot at buying a place of their own’’.

(The Nelson Mail, Monday 15 May 2017)

Contracts awarded for airport terminal

Nelson firm Gibbons Construction is one of the main firms to have been awarded the $32 million Nelson Airport new terminal contract.

National construction firm Naylor Love will work with Gibbons and Fulton Hogan on the build, which is scheduled to take 18 months. Work is scheduled to start in the ‘‘coming weeks’’.

Nelson Airport’s board chairman Paul Steer said the board was pleased the process selecting the contractors was complete.

Nelson Airport CEO Rob Evans said the team was excited to be getting on with the job after a long design period.

The need for the new terminal was spurred by the huge growth in passenger numbers the terminal was seeing.

Domestic tourism growth had been at 25 per cent a year since 2015. A record 986,000 passengers used the airport in 12-months to April, and this figure was expected to reach one million by the end of the year.

The airport’s growth was the highest of any regional airport in the country.

The building will use and showcase Nelson grown and processed Nelson Pine Laminated Veneer Lumber (LVL).

The new building will be twice the size of the existing one and the number of car parks will increase from 600 to 900.

Gibbons Construction chief operating officer Shane Trench said the redesign was a ‘‘once-in-a-generation’’ opportunity which had huge significance as the gateway to the Nelson region.

In 2014, the Nelson City Council deemed the existing 1974 Nelson airport terminal earthquake-prone and gave the airport 10 years to strengthen it.

No ratepayer money will be sought for the project.

(The Nelson Mail, Tuesday 16 May 2017)

Crack down on illegal wastewater use

Illegal connections from the stormwater to the wastewater system at Mapua are in part to blame for sewage overflows in the growing seaside village, according to Tasman District Council.

Mapua School had to close on Thursday for the second time in about six months after the wastewater system overflowed following a heavy downpour.

TDC utilities manager Mike Schruer told councillors that about a month ago, after heavy rain, staff investigated the nearly completed nearby Mapua Rise subdivision. It found that at one building site, the wastewater cap had been removed while at another site there was evidence of a pump being used to drain water off the site into the wastewater network.

A number of gully traps had pipes that were not sealed properly and a manhole was leaking when the groundwater was raised.

Chief executive Lindsay McKenzie said it was ‘‘an incredibly frustrating situation, especially as we’re dealing with a new subdivision and my message to the staff is that we should be contemplating compliance action’’.

(The Nelson Mail, Tuesday 16 May 2017)

Pakawau rock wall could cost $350,000

A proposed rock wall to help hold back erosion that threatens homes at Pakawau in Golden Bay is tipped to have a $350,000 price tag.

The cost per ratepayer in the tiny seaside settlement is estimated to be $1500 to $2000 a year, assuming the capital is borrowed over 20 years.

Anxious homeowners at Pakawau have pleaded with Tasman District Council for years to help them protect their properties from the serious coastal erosion that has eaten away the reserve in front of their homes.

The council funded sand pushups in December 2014 and December 2015 but the 17 affected residents have called for a more permanent solution: a rock revetment.

In a report on the matter, TDC chief executive Lindsay McKenzie says the direct construction cost of the wall has been estimated by Sollys to be $240,000, based on a design obtained by the residents from OCEL Consultants.

After the meeting, McKenzie confirmed the ‘‘rough’’ cost estimate of $1500 to $2000 per ratepayer was based on the council raising the capital for the project and covering operating costs.

About $22,000 had been spent on the project so far, funded by the residents.

(The Nelson Mail, Wednesday 17 May 2017)

Group airs airport noise concerns

The $32 million expansion of Nelson Airport might bring more visitors, jobs and money to the region.

But a group of residents who live near the airport are concerned that it might also bring more noise.

The Nelson Airport Noise Action Council (NANAC) is calling on the airport company and the city council to consider its concerns regarding noise as the new terminal building and car park take shape.

The group is taking aim at noise rules in the Nelson Regional Management Plan (RMP), which is under review.

NANAC has made submissions to the council in an attempt to tighten up noise regulations at the airport.

Former NANAC chairman David Brathwaite said the group was not so concerned about regular airplane noise, rather the increase in ‘‘industrial noise’’ from aircraft maintenance during the night and compass configuration.

He also said the noise from helicopters and smaller aircraft weren’t taken into account under the RMP.

NANAC was calling on the airport company to use a new noise shield to help contain the racket made from aircraft maintenance.

(The Nelson Mail, Thursday 18 May 2017)

Centre of ocean excellence

Nestled among fishing giants, the Nelson Plant and Food Research Centre has opened its doors with an aim to maintain Nelson’s foothold as the seafood capital of New Zealand.

The picturesque setting of the new science establishment on Akersten St in Nelson Port provides an outlook over waters now home to 50 scientists who are thoroughly exploring below sea level.

The building is a modern glass and wood structure with laboratories designed for scientists to analyse and explore the effects of marine molecules on living cells, design better technologies for the fishing industry like nets.

(The Nelson Mail, Saturday 20 May 2017)

1100 Tasman homes proposed

A further 800 sections and 1100 homes are proposed under a new Tasman housing accord aimed to cope with demand in the fastgrowing district.

Building and Construction Minister Nick Smith and Tasman Mayor Richard Kempthorne signed the new deal yesterday.

The accord sets annual targets for the Tasman District Council for consenting new residential dwellings and allows it to recommend Special Housing Areas (SHAs) to the minister. The new targets for the next three years are for 800 sections and 1100 homes.

The previous accord from May 2015 had a goal of 260 additional sections and 620 new homes over two years.

Smith said those objectives have been exceeded with 457 new sections and 693 new homes.

Nelson and Tasman enjoyed a record building boom with $350 million of work consented in the past year.

Significant population growth was forecast in Richmond, Mapua, Motueka, Brightwater and Wakefield in the next 10 to 20 years.

(The Nelson Mail, Saturday 20 May 2017)

Thought for the Week

Time is long -
but life is short.

Stevie Wonder