The Effect of Upzoning on House Prices and Redevelopment Premiums in Auckland, New Zealand

39 Pages Posted: 3 Mar 2020

See all articles by Ryan Greenaway-McGrevy

Ryan Greenaway-McGrevy

University of Auckland Business School

Gail Pacheco

Auckland University of Technology - School of Business and Economics

Kade Sorensen

University of Auckland Business School

Date Written: October 1, 2019

Abstract

We study the effects of a large-scale upzoning on house prices and redevelopment premiums in Auckland, New Zealand. Upzoning significantly increases the redevelopment premium, but the overall effect on house prices depends on the economic potential for site redevelopment, with underdeveloped properties appreciating relative to intensively-developed properties. Notably, intensively-developed properties decrease in value relative to similar dwellings that were not upzoned, showing that the large-scale upzoning had an immediate depreciative effect on pre-existing intensive housing. Our results show that the economic potential for site redevelopment is fundamental to understanding how changes in land use regulations affect property values and housing affordability.

Keywords: Upzoning, Land Use Regulations, House Pirces, Redevelopment Premium

JEL Classification: R14, R21, R31, R52

Suggested Citation

Greenaway-McGrevy, Ryan and Pacheco, Gail and Sorensen, Kade, The Effect of Upzoning on House Prices and Redevelopment Premiums in Auckland, New Zealand (October 1, 2019). Available at SSRN: https://ssrn.com/abstract=3532027 or http://dx.doi.org/10.2139/ssrn.3532027

Ryan Greenaway-McGrevy (Contact Author)

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Gail Pacheco

Auckland University of Technology - School of Business and Economics ( email )

3 Wakefield Street
Private Bag 92006
Auckland Central 1020, Auckland 1010
New Zealand
+64 9 917-9999 Ext. 5708 (Phone)
+64 9 917-9990 (Fax)

Kade Sorensen

University of Auckland Business School ( email )

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

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