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Apartment development set for third highest record

Tracking by Colliers International research shows over the first nine months of this year 1,159 apartment units were completed in Auckland. A further 1,963 are should be finished  before the end of the year.

Friday, November 25th 2022, 10:12AM

If achieved, 3,122 new apartments will be added to the city’s inventory making it only the third time since 2000 that more than 3,000 new apartments have been completed in a calendar year.

The development acceleration has been underpinned by the growing appeal of apartment living in the suburbs. This year 22 suburban apartment developments will make up 75% of the regional total, up from 19% in 2016.

Colliers International research associate director Ian Little says development intentions remain positive as illustrated by building consents which have reached a record 50,653 in the year to August. “The influence of multi-unit developments has continued to increase. On a national basis the total number of apartment and townhouse consents made up 49% of total consents. In Auckland the influence of multi-unit development is greater still accounting for 73% of consents. “

The development sector’s ability to maintain momentum is, however, facing increasing constraints, including the cost and availability of credit to both developers and buyers, rising building costs putting pressure on margins and the general softness of the overall housing market.

Little says as a result, it is likely that an increasing number of proposed development projects will be kept on the drawing board or, in some cases, abandoned. “Although, the pipeline for 2023 remains robust with just over 2,500 units under construction, it is likely the rate at which new projects are delivered will decline over the medium term.”

New apartments have continued to command premium values in comparison with that of older existing stock. The higher values reflect not only the appeal of new apartments but also the impact of rapidly increasing building costs. Analysis by Colliers research found the average asking price for new build apartments stood at $1,560,595 over the six-months to June, an increase of 29.8% on the June figure last year. Over the same time the median sales value of all Auckland apartments dropped by 5% to sit at $665,000.

Help for developers

To help developers who might have to might have to abandon projects due to the rising costs of materials and labour and a drop in house prices the Government has introduced the Build-ready Development Pathway.

For eligible build-ready developments, where construction hasn’t started, government assistance can take two possible forms:

  • purchasing the developer’s land under a government land acquisition programme; or
  • pre-purchasing or underwriting homes ‘off the plans’ to reduce risk for developers and their financiers

The government has committed $75 million of the $350 million Affordable Housing Fund for prepurchase commitments and underwrite agreements, to support consented developments where construction hasn’t started, and developers haven’t been able to secure enough presales to satisfy development finance.

Tags: Apartments

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 ▼6.39 ▼6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.17 5.79 5.69

Last updated: 30 October 2024 9:36am

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