Plans for a 14-unit multi-million dollar Hobsonville Point apartment block have been cancelled and depositers refunded, according to New Zealand's largest group house-building business.
Tony Houston, managing director of Team West which owns the west Auckland franchise for the country's biggest group house builder G.J. Gardner, said the block would not be developed.
"The main reason we didn't go ahead was due to the living areas facing north on to Hobsonville Point Rd. We only sold three units and I made the commercial decision not to go ahead for this reason. We have never cancelled a project like this before, and hope to never again," Houston said.
"The block of 14 apartments - we pre-sold only three units. We met individually with all the clients and gave them first pick of our next-to-be-released stage," Houston said.
"One has chosen not to go with those units. We have refunded all the clients their deposits."
Grant Porteous, managing director of Deacon, which holds the New Zealand master franchise for G.J. Gardner, supported Houston's decision.
"As Tony noted, there are a lot of things in the mix with projects like this - timing, market receptiveness, other opportunities etc. Tony's recent experience shows that units like this have not been very popular and with the living areas facing north and on the main road, combined with limited pre-sales plus more time until resource consent was through. He simply made the commercial decision not to proceed," Porteous said.
"After discussing this with Tony, I support his decision," Porteous said.
The cancellation comes after plans to build the much larger 91-unit Flo apartments in Avondale were axed this month. Colliers International was marketing those units and deposits were paid on 81 units.
Pete Evans of Colliers International said this month that research from that business showed more than 30 Auckland apartment projects had been cancelled in the last year alone.
Zoltan Moricz and Tamba Carleton, in the Auckland office of CBRE Research New Zealand, this week released the report Apartment Launches and Abandonments examining the apartment supply pipeline.
"Thirty one projects totalling 2044 units have been abandoned over the past four years. This equates to 15 and 16 per cent respectively of the total number of projects and apartments launched," their research, out on Tuesday, said.
Places would be built on a number of the sites where a project has been shelved.
"Abandonment refers to a specific active pipeline project being abandoned.
Porteous said he was not familiar with Flo but understood why such projects were cancelled and why developers made such decisions.
"If they did so due to rising construction costs or funding issues because the product is not wanted by the market at the price they would need to achieve for it to be viable and profitable, then they have made a sound commercial decision and should be applauded for that," Porteous said.
That was preferable to projects beginning, hitting financial issues and parties being left unpaid for work done, he said.
A Herald reader expressed frustration at the Hobsonville Point block's cancellation.
"G.J. Gardner pulled a block at Hobsonville Point after it had been all pre-sold for months. I know someone that was devastated. They at least hadn't sold their house," the reader said.