KEY POINTS:
Applications for building consents have slumped as Auckland feels the grip of the global financial crisis.
Council figures show the number of building consents lodged have fallen 7 per cent during the July-to-September quarter compared to the same period last year.
The figures come as it emerges a
$600 million development of Rhubarb Lane has collapsed. That project is the latest in a series of stalled developments blamed on the ailing global economy.
Auckland City Mayor John Banks said he was worried about the impact of the financial crisis on the commercial property market, particularly in central Auckland.
"Much of the property values in the CBD have been built on sand and consequently it was only a matter of time before there was a collapse," he said.
The council figures show applications for LIM (land information memorandum) reports, typically sought by people looking to buy property, were down by 37 per cent for the same July-to-September period. QV Valuations has reported a 6.8 per cent fall in house prices in the year to October.
In Manukau, city council environment director Ree Anderson said resource and building consents had fallen sharply since the start of October, mostly for residential applications.
Auckland City staff have reported being contacted by developers who held resource consents and told they would be postponing construction work indefinitely because of the economic situation.
In the past month, developer Cooper and Company has said the world economic turmoil made it impractical to design, finance and build a 21-storey hotel at Britomart. The company has also delayed plans to start work this year on a low-rise building on the former Oriental Markets site in Quay St.
The big hole in the ground at the $250 million Soho Square development in Ponsonby has been mostly idle all year.
Other large projects expected to start by now but that are dormant include Kitchener Group's Victoria Park Markets redevelopment, Dae Ju's Elliott Tower apartment skyscraper on the old Royal Hotel site fronting Elliott St and its Auckland Star site redevelopment between Fort St and Shortland St.
Mr Banks said he believed the economic climate would push back the $1 billion-plus Tank Farm development on the western edge of the city by five years; it would be irresponsible to fund the proposed $51.2 million Te Wero bridge across the Viaduct Harbour to the Tank Farm at this stage.
He said it was not all doom and gloom for the property sector and was confident Auckland would come out of the recession stronger.
One of Auckland's most experienced commercial real estate agents, who did not want to be named, said vacant development land was virtually in freefall, with no funding or confidence to buy or lease property off the plans. There was still plenty of cash for anything with an income stream or a lease profile and good inquiries for commercial property in the $5 million to $25 million market