In the words of legendary Australian homeowner Darryl Kerrigan from cult-comedy movie The Castle, “A property is built with more than bricks and mortar – it’s built with memories and love.” That’s the reason he gives the court when his local council attempts to compulsorily acquire his property to expand their local airport.
While it works out in the end for Darryl Kerrigan, local and central government do have the power to compulsorily acquire land to expand roads, airports, power stations, sewerage or stormwater drains. What are your rights, what could this mean for you, and how will it affect the value of your property?
If you’re considering investing in property, check the easements on the property title. There might be a sewerage or storm water pipe running underneath your backyard. Council may not need to acquire your land, but if repairs or maintenance are needed they might need access to your property while they fix the pipes. Waking up to diggers and construction workers in your backyard each morning for a few months might be a fantasy for some, but it’s unlikely to raise the value of your property overall.
There’s already a lot to check and consider when buying property, so visiting the New Zealand Government’s National Infrastructure Unit’s website won’t rank highly on your to-do list. The government makes their Thirty Year Plans public, setting out their objectives for growing and maintaining New Zealand’s infrastructure.
The Thirty Year Plan outlines what major projects are being planned where, which are the roads of national significance, and which cities and regions are growing and need more supporting infrastructure. As it is dealing with future events, the Plan may be hazy on specifics. It could state a new by-way or highway is being planned for a certain area, and will wait until closer to the time before mapping out exactly where the new road will go.
Read more: Why are the number of building consents issued in an area important?
Using the Thirty Year Plan as a guideline, you can avoid your property value plummeting when a major motorway runs right next to your property. If your land is where the new highway needs to be, the government can acquire your land compulsorily. While you will be compensated, it’s unlikely to be around the full market value.
Infrastructure keeps a city moving, especially a major city like Auckland where public transport is essential. A revamped train station or bus route might make your rental property more accessible or closer to amenities. Commercial consents for new malls or shopping centres will definitely raise the value of surrounding properties. By thinking and planning ahead, you could pick up a property before the big plans are widely announced and sell when the new neighbourhood comes into demand.
The Ministry of Transport, Department of Internal Affairs, the National Infrastructure Unit and your local city council all release plans announcing their intentions for areas of land each year. With a bit of due diligence and background checking you can avoid buying a dud, or find a property gem that Darryl Kerrigan might say “is going straight to the pool room!”
Download our A-Z guide is a handy guide to help you navigate the property investment world, and make buying, leasing, and selling homes that much easier:
