Apartment builds to reach decade record
4000 units to be completed won’t meet demand, warns expert
Apartment towers are rising across Auckland, delivering nearly 4000 new units to a city grappling with a housing shortage, but it is only one year’s supply and not enough to meet demand, warns a real estate expert.
Some of Auckland’s biggest new apartment projects have been mapped, showing 49 blocks with 3795 new units being marketed or under construction.
Colliers International tallied up the projects, and to show the spread of some of the larger schemes the Herald has mapped the five biggest projects in the central business district ( CBD), city fringe and suburbia.
Colliers identified 1391 new units in the CBD, 961 on the city fringe and 1443 in suburban areas. Half of those units are under construction, while building work on the other half is yet to start and the projects are now only being marketed or pre- sold, Colliers said.
Pete Evans, Colliers’ residential project marketing national director, said next year would see the highest number of Auckland apartments completed in more than a decade.
Even with that level of development work, it was not enough to meet demand and was only a year’s supply.
“In major cities with population growth we would expect supply to be anywhere between 12 to 24 months,” Evans said.
“Most apartment projects take two to three years to build so the current undersupply will remain in the foreseeable future. Auckland’s population growth, as well as banks restricting funding, is not assisting the needed supply of new apartments.”
Deposits have been taken on most of the 3795 new units, which sold for an average of $ 1.12 million, up 12 per cent from a year ago, he said.
Last month, a study of more than 200 New Zealand industries conducted by market researchers at IBIS World picked the top sectors set to flourish, and those forecast to decline in the next year.
Apartment construction topped the list. The multi- unit apartment and townhouse industry was forecast to grow to $ 1.42 billion in the 2017- 18 financial year, up from $ 1.3b.
However, not all apartment buyers settle. In July, nine Sugartree apartments valued at about $ 6 million were being quietly promoted for sale, after buyers who put down deposits had either died, had a change in per- sonal circumstances or did not have enough money.
Zoltan Moricz, senior director and head of research at real estate agents and consultants CBRE New Zealand, said in July that a record 1216 new apartments worth more than $ 600m would be completed this year in Auckland’s CBD — the most this decade.
Moricz said 343 new CBD units were completed between January and July, not counting suburban pro- jects. A further 873 CBD units were under construction and due to be finished this year, Moricz said. That gives a total 1216 new units, his data showed. In 2012 and 2014, not a single apartment was completed in Auckland, he noted.
Many new apartment blocks are being built with no, or limited, car parking due to the Unitary Plan’s drive for intensification and encouraging more use of public transport.