Are Restrictive Covenants Making Kerikeri Land Harder to Sell?

Kerikeri currently has an oversupply of residential sections. Buyers have more choice than they have enjoyed for several years, which means every subdivision is competing for attention.

While price and location remain important, another factor is increasingly influencing buyer decisions — restrictive land covenants.

Many sections come with requirements such as:

• Minimum dwelling sizes of 180–200m² or more.
• New building materials only.
• No relocated homes.
• Restrictions on secondary dwellings.
• Controls over garages, sheds, fencing, roofing, colours and landscaping.
• Architectural approval before construction can begin.

These covenants are often created with good intentions. They help protect the appearance of a subdivision, preserve property values and create a consistent neighbourhood. For premium developments, this is exactly what many buyers are looking for.

However, not every subdivision is targeting the premium market.

One of the biggest challenges facing New Zealand is housing affordability. We regularly hear calls for more affordable housing, yet many sections available today can only be developed with relatively large, expensive homes.

If a covenant requires a minimum floor area of 200m², the total cost of buying the land and building a compliant home can easily exceed $1 million. That immediately removes many first-home buyers and young families from the market.

The reality is that many buyers don't need a large home.

For decades, the classic Kiwi dream was a modest three-bedroom home of around 100m² (approximately 1,000 square feet), with one bathroom, a carport or single garage, sitting on a generous section. Many families started with a simple home and improved it over time through hard work, renovations and landscaping. Others purchased older homes and relocated them onto new sections, creating value while keeping costs manageable.

That pathway into home ownership is becoming increasingly difficult.

According to national housing statistics, first-home buyers continue to make up around one-third of property purchases in New Zealand. They remain an important part of the market, but many simply cannot compete for sections that require large, high-specification homes from day one.

Allowing smaller dwellings, modest designs, or even quality relocated homes in suitable subdivisions could significantly broaden the pool of potential buyers.

Affordable housing should not be confused with poor-quality housing. Most first-home buyers simply want an opportunity to get started, build equity, and create a better future for themselves and their families. Given the chance, many will improve and add value to their homes over time.

If you're considering subdividing land, one of the most important questions to ask is:

Who is your target market?

Before finalising covenant restrictions, consider:

• Who is most likely to buy your sections?
• How much competing land is already available?
• What price point is currently experiencing the strongest demand?
• Are your covenants helping your sections stand out, or unintentionally limiting your buyer pool?

Every development is different. Premium lifestyle subdivisions will always have a place in the market, and carefully designed covenants are often appropriate. But there is also room for subdivisions that provide flexibility, encourage affordability and give more New Zealanders the opportunity to own their first home.

In today's market, successful developments aren't just about creating sections—they're about creating opportunities that match the needs of today's buyers.