Concern over Premature Real Estate Adverts

 Wellington City Council has raised concerns with the Fair Trading Branch of the Commerce Commission over a growing tendency for some local developers and real estate agents to advertise housing developments before they have received planning consent.


Councillor Andy Foster, the Council's Urban Development and Transport Portfolio Leader, says two recent examples of advertising have prompted complaints to the Council. Both directly or indirectly give the impression that the Council has approved developments when that is not the case.

Cr Foster says the effect of the advertisements is to give potential buyers the impression that the developments are ‘ready to go' and therefore a risk-free purchase.

The two most recent cases are:

A property for sale at 74 Salford Street, Newlands, advertised by Harcourts as having ‘provisional resource consent for 6 executive quality detached town houses'. The Council has not even received a consent application for this development.

A controversial townhouse development in Agra Crescent, Khandallah, advertised prominently by Leaders in the Dominion Post despite the fact that it does not meet town planning requirements.

Cr Foster says the Council has received a number of complaints from Khandallah residents under the impression that retrospective resource consent has been given to the development. However the Council has required the developer to apply for the consent and has only just received the application.

"We fully appreciate the maxim ‘let the buyer beware' – but we believe these real estate firms are irresponsible because they are leaving out information hugely important to prospective purchasers.

In the case of the Salford Street advertisement, says Cr Foster, there is no such thing as ‘provisional resource consent'.

Council Development Guidance Manager Dougal List says the Council has raised these concerns with the Commerce Commission – which is to investigate the matter.

"There's been considerable anger and controversy in Wellington this year over the issue of infill housing and non-complying developments – and the Council has been wearing much of the blame. The advertisements are doing nothing to assuage a feeling among some in the community that the Council and developers ignore the rules.

"Of course there's been a long tradition of developments being sold ‘off-plan' – but some recent marketing is seriously misleading due to incorrect or missing information."