Developer Cites Red Tape for Rising Costs of New Subdivision

Classic Group director Peter Cooney has announced that the first release of ten house and land packages within a new 271-home development, located between Hanley’s Farm and Park Ridge, is set to launch later this month. The initial homes are expected to be completed and handed over to buyers next year, marking the beginning of a significant residential project.

Rising Costs and Regulatory Challenges

The first stage of the development will comprise fifty homes, primarily featuring three- and four-bedroom options, along with a few three-plus-one home and income packages. The ten initial builds, all three-bedroom, two-bathroom homes with land sizes ranging from 300 square meters to 500 square meters, will start at $1,095,000. Cooney previously expressed hopes of offering packages below $900,000, but he now attributes the price increase to prolonged delays in the consenting processes, which have extended over the past three years.

According to Cooney, the primary hindrance stems from the Resource Management Act and the extensive layers of red tape imposed by the local council in Queenstown. This situation has resulted in substantial holding costs, preventing Classic Group from delivering homes at the originally intended price points. Additionally, construction expenses have surged by up to 40% since the onset of the COVID-19 pandemic, with little relief observed in the current market.

Market Strategy and Future Developments

Despite these challenges, Classic Group is focusing on offering house and land packages rather than just sections. This strategy aims to provide more affordable housing options, ensuring that speculators do not drive up costs and first-time buyers do not miss out on opportunities. Interest in the Woolbrae development has been robust, with a database of prospective buyers already established. Those who pre-registered their interest will receive priority when purchasing the initial homes.

The rollout of homes will continue steadily following the first ten, with the subdivision planned to be developed in six stages over the next two to three years. A variety of two-, three-, and four-bedroom homes will be available on sections ranging from 250 square meters to 700 square meters. Unlike the neighboring Park Ridge, this development will not impose a covenant banning residential visitor accommodation options, such as Airbnb rentals.

Access to the subdivision will initially be through the internal road network of Hanley’s Farm, with plans for a northern connection to either Park Ridge or directly to the highway as part of future stages. Infrastructure and roadwork on the 14.5-hectare site is expected to be completed by next month, paving the way for the upcoming housing releases.