$150m of residential land snapped up during lockdown
More than $150 million worth of residential land sales were conducted during the Covid-19 lockdown period, OneRoof can reveal.
Developers and investors snapped up 28ha of residential and mixed-use development land in Auckland.
The sales included the former Caughey Preston Rest Home site, on 3.1 ha of valuable Remuera land, along with Auckland Council’s O¯ rewa Service Centre, two CBD apartment sites, a greenfield site in Drury, and consented townhouse sites.
All nine sales occurred during the Level 3 and 4 coronavirus lockdown period and were brokered by Colliers International.
Josh Coburn, site sales director for Colliers, says: “We saw a big influx in the amount of enquiry for residential development land throughout lockdown. Developers are betting the Covid effect will be short-lived and will therefore continue putting sites into the development pipeline.
“Driving this sentiment is the wellfounded assumption that we are about to see the return en masse of residential investors.”
Coburn adds: “Land is seen as particularly stable right now, as are houses. By contrast, commercial investors remain cautious about commercial tenant covenants and in some cases their ability to pay rent in the current environment.”
Two categories of residential buyers are likely to dominate the market in the coming months, Coburn predicts.
First home buyers taking advantage of record low interest rates and investors seeking quality properties that are easy to maintain.
“In the previous cycle, many investors were speculators who might only paint the walls and put in a new kitchen before on-selling the property for a capital gain,” he says.
“The new residential investor is likely to be buying modern, lowmaintenance, well master-planned investment stock. They will also be buying for rental returns, rather than specifically for capital gains.”
Coburn says when Covid-19 hit, many expected land sales to drop but the opposite happened. “Unlike the GFC, today’s economic environment is driven by sentiment. Land continues to be viewed positively.”