Urban land prices – a progress report

Between 2010 and 2021, the difference between urban and rural land prices roughly doubled in nearly every large New Zealand city – Auckland, Hamilton, Tauranga, Wellington and Queenstown.

About this report

The report examines trends in urban land values between 2010/11 and 2020/21. The report finds that infrastructure and planning costs are factors in the increased difference between urban and rural land prices. The exception is Christchurch, where land has remained more affordable most likely due to changes to housing development and infrastructure following the 2011 Canterbury earthquake.

Key points

  • Between 2010/11 and 2020/21, nearly every large New Zealand city, with the exception of Christchurch, experienced significant increases in the value of urban land relative to nearby rural land. For instance, in 2010, Auckland’s urban land values were 2.1 times higher than the value of adjacent rural land. By 2021, this ratio had risen to 4.4.
  • In dollar terms this has been a significant increase. In Auckland, urban-zoned land was valued at a premium of nearly $1,300 per square metre relative to nearby rural-zoned land in 2020/21. This is up from a premium of less than $200 per square metre in 2010/11. Tauranga has a difference of $1,100 per square metre, while Wellington, Hamilton, and Queenstown have differences in the range of $400 to $500 per square metre.
  • Christchurch is the only city to experience declining rural-urban land value differences. In 2020/21 Christchurch had the lowest price premium for urban land – around $200 per square metre. While the reasons for this weren’t examined specifically, this is likely due to the impacts of the Canterbury earthquakes and subsequent rebuilding.
  • These findings do not reflect the impact of the 2020 National Policy Statement on Urban Development and the 2021 Medium Density Residential Standards, which are expected to reduce pressure on land prices but which were not fully implemented by councils until after the end of our analysis period.