Questions about a boundary adjustment to create a shared driveway

[jdwatson]

My neighbour wants to buy some of my land to increase his land size and create access to the end of his property so he can subdivide and build. He needs about 40 sqm's and he can achieve this by taking around half the width of my driveway, all the way to the end of our adjoining properties, adding it to his side path to create a new driveway. We're in Mt Albert, Auckland, zone 6A but earmarked for Terrace Housing if the unitary plan goes ahead. He is suggesting around $1,500psm which is based on what the property on the other side of me sold for earlier this month.

I am considering doing this as the money I get could contribute to the cost of building a one bedroom sleep out / granny flat (50sqm costing approx $150,000 plus council fees) in my backyard. Of course it would be without oven and other things that would make it a second dwelling as the land size is 746 sqm now and would be smaller with the land sale, so not 375sqm needed for an official 2nd dwelling.

I have a few questions;
- what do I need to think about when considering selling off a strip of my land and is the price being offered adequate considering the loss in value of my property as it would then have a shared cross-lease driveway.

- is there any way that it could be done where we both calculate the shared driveway as part of our land and we both end up with a larger property size? Seems crazy I know but if we're sharing the driveway part of it is made up of land from his property as well as mine. If I can capture less than 10sqm's I could make my sleep out an official second dwelling, adding value. I don't want to sub-divide as I want to manage the outlook from my house and sense of space around it.

[Grundy]

A quick read has me wondering if the $ offer might be a bit light.
Just witnessed a similar negotiation by a new NZ'er with his neighbour. The neighbour needed land to allow another dwelling.
I was quite surprised to see how someone not used to the old kiwi way calculated a price which was an expectation of land value, legal costs, PLUS a share (10%) of the theoretical profit from the new build. It was explained to me that its all business...if the neighbour wants to go into the business of developing then my pal had something he needs and other cultures negotiate on the basis of a profit percentage.
I'll be interested to read other opinions likely to follow.

[jimO]

i would want more than that PLUS he pays all costs

[Wayne]

i would want more than that

Why?
At 1500/sqm the 745sqm section would be valued a bit over $1mil - is that a reasonable price to pay in the inflated Auckland market?

[elguapo]

Why?
At 1500/sqm the 745sqm section would be valued a bit over $1mil - is that a reasonable price to pay in the inflated Auckland market?

I imagine for the very simple reason he might get it! The price isn't based on a sqm land price, but rather a 'what's it worth to you' basis.

[Wayne]

My Q was why jimO thought $1500/sqm was light.
I understand the concept of 'what's it worth to you'.
Also the concept of what's it worth to me.

[Wayne]

Bear in mind that the op is talking about getting access to the land back again - sell the land but still use it as a shared drive.

[elguapo]

I would generally expect a small piece like this to sell for a significant premium to the usual land sqm rate. Access to land of course adjusts that calculation.

I've been involved in something similar a number of times, but in the context of industrial plants expanding to adjacent sites. Every time the land owner has started at 'astronomical' and worked down to 'daylight robbery'. The actual value of the land has very little relevance in those cases.