It may come as a surprise and even a shock, but Labour and National have agreed sweeping changes to housing density rules in a rare show of unity.

Landowners in our biggest cities will be allowed to build up to three storeys without requiring resource consent.

It’s an unprecedented and bold move designed to help fix the longstanding problem of housing supply. But what does it all mean in practice? Here we answer some of your questions as we take you through the detail of the proposals.

What areas are affected by the new proposals?

The new rules only apply to landowners in Auckland, Hamilton, Tauranga, Wellington and Christchurch. These cities have been identified as tier 1 councils. In these areas, three homes of up to three storeys can be built on up to 50% of the site without needing resource consent.

There are, however, some exceptions. Sites with heritage value, a high risk of natural hazards or where intensification is inappropriate will be exempt.

New homes will still need to meet the building code and satisfy all the durability, weatherproofing, and safety standards.

What about other New Zealand cities?

At the moment, other cities are not covered by the rule changes. However, several areas have been identified as tier 2 councils where the proposals could be introduced in the future if they have an acute need for more housing. Tier 2 areas include Whangārei, Rotorua, New Plymouth, Napier Hastings, Palmerston North, Nelson Tasman, Queenstown and Dunedin.

Will the changes fix housing supply issues?

Consultants PwC have estimated that the changed density rules, together with other proposals in the National Policy Statement on Urban Development, could result in an extra 48,000 to 105,000 Kiwi homes over the next 5-8 years.

However, the construction industry's current labour and materials supply issues could well impact the total number. Plus, there will be some big infrastructure challenges to navigate, especially in Auckland, where many of these homes will be built.

One thing for sure is new homes built will be a lot smaller than many Kiwis are accustomed to. And outdoor space is also likely to be limited.

When do the new rules come into effect?

Councils have until August 2022 to implement the new changes.

Where can I find out more information?

Get in touch with your Loan Market adviser for a chat about your situation. Or check out this fact sheet for all the details.