Urban development takes over suburbia
Apartments in Auckland suburbs are attractively more affordable options, yet the price per square metre has been on a steep rise, industry research shows.
New research from Colliers International found that the average median house price was 27 per cent higher than new apartments in the ‘‘sought-after growth areas’’ of Albany, Onehunga and Hobsonville.
The average price for a house in the three suburbs was $966,783, almost $200,000 more than the average sale price for new apartments at $770,138.
The research included complexes that were selling off the plans or were nearing completion.
Martin Dunn, of apartment specialist real estate agency City Sales, said he tends to be cautious in selling off-the-plans options.
‘‘We are very careful … There are three or four developers we won’t go near.’’
Though Dunn would not name names, he said many developers whose plans fall through are victims of tightened restrictions on bank lending.
‘‘It’s banks who ultimately decide what’s going to be built.’’
Dunn predicted a shortfall of new builds would mean a total absence of new stock would hit the market by 2022.
He said even though apartments were a more affordable option in Auckland, but they were not as cheap as they used to be.
‘‘It used to be any apartment we sold over $600,000 the whole office would celebrate with drinks, but now we’re doing that everyday.’’
In the past two weeks Dunn said he had sold six apartments, five of which cost more than $1 million, the most expensive being $1.7m.
City Sales’ March apartment report, which looked at the Auckland central apartment market, found the average price per sqm had risen from $5000 in April 2005 to almost $9000 in March 2017.
Suburban prices range from $525,000 for a new one-bedroom apartment to $735,000 for two bedrooms and two bathrooms, and $950,000 for three bedrooms, according to Colliers’ research.
Colliers’ national director of residential project marketing, Pete Evans, said the amenities and walkability available to apartment owners was potentially far superior to a suburban home.
‘‘In an area such as Onehunga, people are able to buy an apartment within a short walk from Onehunga Mall with over 100 retail outlets, boutique eateries and bars, and the train station,’’ Evans said.
New Government projects, especially Labour’s KiwiBuild programme, could see further apartment developments in these areas.
A master-planned development, Hobsonville Point, is expected to house 11,000 Aucklanders within the next decade, while Albany has been earmarked as one of 10 metropolitan centres where much of the growth will occur as part of the 30-year Auckland Plan.
The Northwest Transformation, which includes the development of a new town centre at Westgate, a village and employment park at Hobsonville, and development of Hobsonville Point, will be the largest urbanisation project in New Zealand, according to Auckland Transport.
Infrastructure spending of $110m has been confirmed for the project, with another $215m to be invested over the next 10 years.