APARTMENTS SPREAD ACROSS AUCKLAND CITY
Wednesday September 16th, 2015
Thousands of apartments are being built across Auckland — but many have already sold and supply is not expected to meet demand.
Many of these apartments are being sold off the plans. Where are they? Are they selling well? And who is buying them?
Around 6,000 new individual Auckland apartments are expected to be completed over the next three years.
This boom will produce about 3,200 apartments next year (approaching 2005's peak 3,700 completed) and then keep on producing.
Previous apartment booms were dominated by CBD construction, however next year's supply will be more evenly spread throughout the CBD, fringe and suburban precincts.
Colliers International's first Auckland Apartment Research Report calculates in the next 18 months the increase in total number of apartments will be 17 per cent in the CBD, 45 per cent in the city fringe, and 57 per cent in the suburbs.
Apartments planned for the city fringe and suburbs average five levels, says Lloyd. The CBD still attracts the 200-plus apartment pipeline.
Typical pipeline CBD apartments' internal areas at 45-60sqm for one-bedroom units, 70-90sqm for two bedrooms and 90-120sqm for three bedrooms.
Lloyd says pipeline trends include natural outlooks with greenery and "flexi" layouts. These one-bedrooms accompanied by a multi-purpose "flexi" room are smaller than minimum two-bedroom sizing.
Real estate commentators agree apartments bought off-the-plans command a premium over existing apartments as buyers will shell out more for new over "second-hand".
Most developments are seeking GST-inclusive prices which, when applied to internal area, work out at least $8,000/sqm and often $10,000/sqm.
Apartment Specialists director Andrew Murray says apartments he considers "liveable" in desirable city-fringe locations tend to sell off-the-plans for about $500,000 for a one-bedroom, $800,000 for a two-bedroom and $1 million for a three-bedroom.
As traditional property prices skyrocket, traffic congestion worsens and inner-city facilities improve, Auckland apartments are selling well, many as off-the-plans' purchases.
The 847 Auckland apartments pre-sold in the first quarter of this year exceeded the number of existing Auckland apartments sold in the same period for the first time this decade.
Most big pipeline apartment developments attribute around half their sales to investors. And plenty of baby boomers have hit "downsizing age" wanting premium apartments.
EFFECT ON THE MARKET
The apartment development pipeline will meet only a tiny portion of Auckland's growing property requirements.
Of the 6,400 planned apartments only 1,100 will be student accommodation and 500 held by developers to rent out.
Nearly 75 per cent of the 4,800 remaining yet-to-be-built units have pre-sold leaving only around 1300 apartments currently for sale off-the-plan.
Compare that to the nearly 30,000 people Auckland region swelled by in the year to July 2015, which was about half of the country's national net migration.
The current apartment pipeline will barely cover last decade's growth, let alone the growth we are seeing now with record net migration into Auckland
- NZ Herald