A building boom in the Western Bay of Plenty is going to be a direct result of two housing accords, signed this week between the government and local councils.

Housing Minister Dr Nick Smith signed both Tauranga City and Western Bay of Plenty District councils to an accord requiring construction of 1175 houses during the next two years.

'That target of 1175 new houses over the next two years will stretch the region up to the peak of house build that is achieved in the last 20 years,” says Nick.

'But frankly that is what is going to be required if we are going to have that supply increase and the affordability improve in the Bay of Plenty.”

The housing accord forces the councils to accelerate the freeing up of land for housing.

The Housing Minister says while he supports councils working together, as with the SmartGrowth strategy, the Government is opposing restrictive policies on land supply.

'I am saying that councils nationwide have not taken enough cognisance of their land planning policies and the effect it has on affordability,” says Nick.

'What we have to do is ensure that restrictive policies of land supply are not adversely affecting affordability.

'That is why the Government has been putting pressure on the councils to free up more land that is effectively being implemented with these two accords with Tauranga City Council and the Western Bay of Plenty Council.

The Housing Minister says through these accords they are wanting to inject into strategies, like SmartGrowth and the individual planning policies of the councils, a real understanding of how councils' decisions about freeing up land or restricting it has a very direct impact on individual families, 'particularly those families that are aspiring to buy their first house”.

When the land supply is restricted, section prices become very expensive, says the Minister.

'You are not going to put a $200,000 house on a $300,000 section, and so that just lifts all of the houses out of the range for young families,” says Nick.

He's confident the accords and the constructive engagement the Government has with councils will result in more sections at a more affordable price, and during the longer term improve affordability for Bay of Plenty families.

The driver is not the economic benefits expected to result from the building boom, but population growth, says Nick

Population figures released by Statistics NZ show the population is growing at its fastest rate in a decade.

'What's happened is that where there was a large migration to Australia that has halted. As a consequence the New Zealand population has grown about 60,000 in the last year,” says Nick.

'It's not that we want houses built as a stimulus to the economy. We want houses built because there are families that need them.”

House building under the National Government has lifted from 1000 houses a year to about 2000 houses a year nationwide, says Nick.

The construction boom resulting from the accords will still be shy of the construction rate of about 2600 at the top of the 2004/5 peak, says Nick.

'There is a definite drift of kiwi builders; plumbers, electricians, roofers, and the like that are returning to New Zealand to support the Christchurch rebuild.

'My hope is in an area like the Bay of Plenty where we do have a strong expectation of an increased build rate, is that too will bring employment and we may well see some of those skilled tradespeople that left the Bay of Plenty and went to Australia, returning to support these targets that we have set with the Tauranga and Western Bay of Plenty councils.

Attempts to contact SmartGrowth independent chairman Bill Wasley on Friday were unsuccessful.