Property editor of the NZ Herald

Plans for nearly 2000 of Auckland apartments ditched

New apartment buildings are going up quickly in Auckland - but plans for 28 blocks with 1900 units have been abandoned over the past year. Photo / NZ Herald
New apartment buildings are going up quickly in Auckland - but plans for 28 blocks with 1900 units have been abandoned over the past year. Photo / NZ Herald

Plans for 28 new Auckland apartment blocks containing 1900 units have not gone ahead as originally planned, a real estate expert says.

Zoltan Moricz, CBRE research head and senior director, said changes had been made to schemes for about 15 per cent of planned new stock.

Some of the new apartments might never be built, but plans could also be on-sold to other developers or perhaps the projects would be down-scaled, he said.

Some of the planned projects were badly located, too expensive or not what the market wanted, he said.

Moricz said people should not see the trend as indicating Auckland's apartment market was heading for the doldrums as most new Auckland apartment schemes were proceeding as planned, bringing thousands of new units to the city.

"We don't see a 15 per cent abandonment rate for project launches as a materially adverse outcome given the diversity of active developers, apartment product and locations. A prominent theme behind abandonment has been the wrong product, at the wrong location, at the wrong price.

"The market is discerning. Success requires a careful balance of having the right specification and type of product for a given location at a price that the market will accept while still allowing development profit.

Moricz would not name any 'abandoned' projects.

Abandonment is classified as a project where marketing commenced but no work started within the original timeframe, he said.

"We track them and try to get some comment from the developer or marketing agent. But it can be a bit of a grey area," he said.

A CBRE apartment supply chart showed that in 2013, fewer than 500 new Auckland apartments were rising but that jumped to around 600 by 2014 and more than 1000 by last year. If all projects being marketed and now rising are completed, a little under 2500 new units could be finished this year.

Next year, nearly 4000 units are planned, under construction or being marketed, but this drops to 2500 units by 2018, CBRE's chart showed.

- NZ Herald

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