China Construction Bank (New Zealand) has called for the mortgagee sale of 33 luxurious apartments in a multimillion-dollar Auckland block.
In a clear sign of distress in the apartment market, the financier has instructed agents to sell those 33 places in the new 64-unit block, The Victor, in Bute Rd, Browns Bay.
Auckland agents at global real estate business JLL said the mortgagee appointed them.
The apartments are being sold by tender and come with car parking.
“The Victor apartments are located in the heart of Browns Bay Village. It is footsteps to humming eateries, boutique shops, supermarkets, library, sports clubs, excellent school zones and a short stroll to beautiful Browns Bay Beach,” advertising from JLL’s John Davies and Tommy Zhang said.
Davies said he was still finding out more about the sale and couldn’t talk about it.
Because it’s a mortgagee sale by tender, all offers will be presented to the bank. Tenancy and vacancy details are to be confirmed.
The upmarket units have been finished in a palette of patterned concrete, black metal, grooved timber and frameless glass. GMC Architects and Archi_ON designed the building, which has ground-floor retail and a central atrium.
The block has 56 units and eight penthouses. Units are a mix of studio, one, two and three-bedroom apartments.
The interiors were by Nicola Manning Design.
A title check showed many units in the block are owned by East Tamaki No 70, whose directors include Yang Liu, who is also a shareholder.
It’s not the only trouble in the apartment sector.
Ockham Residential repaid deposits on one huge new Auckland block it planned recently. Mark Todd of that business said buyers in the 165-unit The Feynman would be repaid.
Auckland’s apartment market has declined sharply, with some projects abandoned partway through and an 83 per cent pre-sale drop in the past six years.
Tamba Carleton of CBRE prepared a chart which showed the recent peak in apartment pre-sales was in 2016 when more than 3000 units across the city were pre-sold. She is an associate director within CBRE’s New Zealand research department, specialising in high-density residential research with a focus on the apartment market.
She said 2016′s figure fell 83 per cent to just 500 Auckland apartment pre-sales last year. And the situation is not improving.
High interest rates and the recession are driving down the numbers, as developers plan fewer new units due to indications they won’t be able to sell those off the plans. They need those off-the-plan deposits as one of the funding mechanisms to build. Usually, pre-sales and either mainstream bank or non-bank lending funds construction and apartment project completion.
“Low pre-sales, low launches alongside abandonments and completions are all interrelated, overlaid with changing household structures and priorities,” Carleton said.
“Launches have been low for a while now and lately the supply pipeline has been getting smaller and smaller. I am expecting fewer than 1500 apartments to be completed in 2025,” she said, referring to projects which are under construction now or about to start.
The Government’s gazette notices are filled daily with liquidations of builders and subcontractors, in growing numbers.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.