Apartment living is becoming more popular, especially in desirable suburbs. Image / Jasmax
As debate swirls around the impact of mid-rise and high-rise living on Auckland suburbs, new research shows demand for apartments is growing fast.
The research was carried out by Tamba Carleton and Zoltan Moricz of the commercial real estate company CBRE. Their focus was on two price points: $1.6 million and $600,000.
They found that demand at the upper price point is greatest in Remuera and then, in ranking order, Mt Eden, St Heliers, Takapuna, Epsom, Parnell and Milford.
Demand for $600,000 apartments is greatest in “centrally located parts of the isthmus, desirable coastal suburbs and in suburbs with older singles”.
But the research also serves as a reminder that apartment dwellings are not about to change the character of most Auckland suburbs any time soon.
It reveals that from 2001 to 2023, there was a 367% increase in apartments in the city.
There are now 48,924 dwellings classified as apartments, with another 2851 in the construction pipeline. That will take the number of apartments past 50,000 sometime next year.
Carleton said apartments are defined as “vertically attached” units, usually five or six storeys high, sometimes 10 or 11 storeys and sometimes, especially in the central city, higher than that.
“Horizontally attached” units, such as terraced housing and townhouses, are not classified as apartments.
But while the growth has been high, it’s come off a low base. In 2001, only 2.1% of the city’s dwellings were apartments. Now, it’s 7.7%. Those 50,000 apartments account for only 11% of the total housing stock.
Recent public meetings hosted by Epsom MP David Seymour and the Character Coalition have highlighted popular concern about housing density in Remuera, Mt Eden and Parnell. While these figures show that demand for apartments is high in those suburbs, they also provide a larger context to the debate.
Auckland Council currently has two residential zoning proposals under review, both of which create the capacity for about two million homes. They provide all property owners – home owners and developers – with options about what to build and where.
But they don’t mean two million homes will be built. Nor do they mean all the new homes will be in apartment blocks.
The council’s chief economist, Gary Blick, reported in July that Auckland has built 100,000 more homes since the Auckland Unitary Plan made density more possible in 2016. The annual construction number peaked at 18,100 in 2023 but fell back to 14,000 last year.
The “pipeline” number of 2851 identified by CBRE is a rough indicator of annual apartment construction. All these figures reveal that the overwhelming majority of new homes in Auckland are single houses, terraced housing and townhouses, all of which are typically between one and three storeys tall.
Still, as CBRE says, its research shows there is growing and unmet demand for apartments. Stats NZ reports that more than half of all new apartments in New Zealand are in Auckland.
CBRE analysed apartment demand using a statistical model based on a detailed dataset of households drawn from the 2023 Census. The model considered three factors:
The company said the third factor declines at higher price points, because “other options in the housing market become more competitive”.
“It is important for developers to know where buyer demand can be sourced from,” the company said. It identified three drivers: families having fewer children, people living longer and household financial constraints.
The household type leading the demand is “couple only”, with people living alone the second-largest group. Only 12% of singles can afford a $1.6m apartment, CBRE said, whereas 22% of couples can buy in that bracket.
The predominant age bracket is 60-74.
“At the $600,000 price point, demand from the 60-74 year old age group is 49% higher than the 20-34 year old age group, but at the $1.6m price point, it is 565% higher.”
Lawyers, accountants and other “higher professionals” choose apartment living more than any other occupation group. They’re followed by the “not employed” group, which consists almost entirely of retirees.
In addition to Remuera and the eastern suburbs, the areas with the greatest demand for apartments include Ōrewa, Takapuna and other East Coast Bays suburbs, Pt Chevalier, Sandringham, Pakūranga and Howick.
Simon Wilson is an award-winning senior writer covering politics, the climate crisis, transport, housing, urban design and social issues, with a focus on Auckland. He joined the Herald in 2018.