Robust market sprouts apartments

By Anne Gibson

Auckland developers will finish more than 5000 apartments worth around $1.5 billion by the end of next year, according to a market analysis by one developer.

Princes Wharf apartment specialist Kitchener Group has pinpointed the largest projects in the CBD and identified 5064 units either under construction or about to be built by the end of next year.

Other experts estimate more than 7000 new units are on the way.

Kitchener has studied the supply and demand scenario to gauge how many and what type of apartments developers are offering.

Ian Mitchell of consultants DTZ in Wellington said he had calculated about the same number.

His analysis showed 200 fewer units than Kitchener calculated being built.

Martin Dunn, of specialist apartment real estate agency City Sales, has reached a higher estimate of coming apartments.

"We have calculated that between January this year to the middle of next year, about 6250 units will be completed across 40 complexes. But the figure to the end of next year could be 7558 units," Dunn said.

"The market through this winter has been remarkably robust, so I am expecting a pretty strong spring."

Kitchener has identified 26 projects around the CBD, and chief executive Chris Aiken said developers were building more upmarket apartments, which could mean more demand for less expensive units in the longer term.

"Those apartments are going to go up in price because of the rule changes which stipulate we can't build any more," Aiken said of the more affordable units.

He cited Kitchener's units at 490 Queen St as examples of these types of apartments - sold for $135,000 to $250,000.

Many of the blocks under construction have units selling for $140,000 to $250,000, he found.

A few of the projects have units that will sell for $250,000 to $500,000. Kitchener classified these two categories as "grade B and C".

Then the apartment building boom leaps to a high level of luxury, particularly around the waterfront, where units sell for $800,000 to more than $2 million, Aiken said, classifying this group as grade A.

But Aiken has identified a category of units priced between $500,000 to $800,000 that he says will be popular but not in great supply.

"These are apartments in a category which I call affordable luxury, and they might be scarce in the future," he said.

Kitchener has tenders in for the sale of its former Hewlett-Packard House at the entrance to Princes Wharf.

The group this year sold around $80 million of retail and commercial property on the wharf, including two-thirds of the Hilton Hotel.

Some of the city's most active apartment builders:

* Nigel McKenna of Melview Developments: 477 units at The Grand on Waterloo Quadrant alongside The Connaught; 113 units to be finished this year at Lighter Quay in Viaduct Harbour; and UniLodge student accommodation block on Beach Rd.
* David Henderson's Kitchener Group: Precinct apartments on Lorne St; soon to start an Albert St apartment/office block.
* Tony Gapes' Redwood Group starting his third Scene block on the waterfront.
* Estimates are that 5000 to 7558 Auckland apartments are rising

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