In search of apartments
Spacious flats are changing the way many people live in the city, reports Catherine Harris.
Auckland CBD apartments are flying off the shelves as off-the-plan sales reach fever pitch. Data from real estate consultancy CBRE shows in the September quarter, 82 per cent of all the units in the city centre apartment pipeline had been snapped up, leaving just 18 per cent still for sale.
CBRE expects some 3,750 CBD apartments to be completed by late 2019, and says demand this year is ‘‘well in excess’’ of previous years, with just over 1000 apartments being pre-sold so far.
Over the entire city, CBRE is forecasting 9000 units to be built in the next three years, of which only 1700 are still for sale.
That kind of demand shows there has been a cultural shift towards inner-city living, Auckland Council’s design office general manager Ludo Campbell-Reid says.
‘‘The apartment lifestyle offers, in essence, a new way of living for Kiwis ... We are urbanising: for me there is an emerging Kiwi urbanism.
‘‘Apartments are now considered a viable way to live for typical citizens, not simply an investment for someone else to live in.
‘‘It signals to me that we are growing up as a city, becoming more urbane and becoming more aware of the benefits of this way of living,’’ he said.
CBRE’s director of residential projects Gavin Lloyd said the improved quality of inner city apartments had been a big factor in their rise.
Demand was now sufficient to warrant boutique apartment blocks like Library 27, a downtown luxury project being built by recently arrived Belgian developer Eaglestone.
Lloyd said that during the last apartment building boom of 2003 to 2006, about 90 per cent of the stock was considered ‘‘investment grade’’.
Now about 42 per cent were aimed at owner-occupiers, who demanded a higher quality.
‘‘Generally speaking, apartment complexes aimed at investors have a high number of units, typically more than 100, and they tend to be of a lower quality and smaller size,’’ he said.
‘‘Projects aimed at owneroccupiers have a smaller number of units ... in order to provide more spacious living spaces.’’
Specialist real estate agent Martin Dunn, of City Sales, agreed that new apartments were getting harder to come by.
He believes 3700 apartments will definitely go ahead in the next three years, tailing away quickly after that because of a lack of bank finance.
‘‘There’s not going to be much on offer. What there is will go over the next six months and until the banks ... turn around, supply is going to dwindle down to nothing.
‘‘None of those affected want this. We need a steady supply of new apartments being built and the banks always get it wrong. They’re pulling out of funding new developments at a time we most need them.’’
Dunn said the Australian-owned banks were heavily influenced by the Melbourne experience, where there were few pre-sales and an apartment glut.
He was also critical, however, of apartment contracts which allowed the developer to renegotiate the purchase price if prices escalated.
Cost overruns were often blamed for apartment projects being cancelled although sometimes it was a simple case of the market having changed.
The flush of new apartments will further boost the population of Auckland’s CBD.
CBRE says the current estimated population is 43,000 – a marked increase on 17,937 in 2006.
Apartments are now considered a viable way to live for typical citizens, not simply an investment.