The Merchant Quarter apartments in New Lynn. Photo / Doug Sherring
Nearly 6000 new apartments are set to be built across Auckland over the next three years, with most planned for suburban and city fringe areas rather than the CBD, new research reveals.
The new housing stock includes developments that are currently being marketed, have building consent or are under construction.
Thousands of other properties are still in the pre-planning stages or envisaged on surplus land being freed up for private developers by Auckland Council and the Crown.
The new apartment stock will help address a drastic housing shortage that has seen house prices soar across the city by 20 per cent in the past year to a new record median of $749,000 last month, according to Real Estate Institute data.
Commercial real estate agency CBRE has released figures on the Auckland apartment market.
They show the city has 26,500 apartments in 393 buildings, 68 per cent of which are in the CBD.
Another 5723 apartments in 87 buildings are in the "active development pipeline" and set to be completed by late 2018. This represents a 20 per cent increase in apartment stock - to 32,000 apartments in 480 buildings.
While apartments have traditionally been built mainly in the CBD, the number constructed in fringe suburbs and suburban areas is forecast to reach an all-time high next year, with 1170 units due for completion in fringe areas, 960 in suburban zones and 790 in the CBD.
The new housing is planned right across the city, from Orewa to Pukekohe, and Beachlands to Henderson.
CBRE senior managing director Brent McGregor said 530 apartments in 12 buildings had already been completed this year, and a further 1486 added to the pipeline - more than half of them outside the CBD.
"What this research shows us is that the time of the fringe city and suburban apartment has come. Developers are responding to demand from people looking for affordable and attractive places to live, and apartment living is on the list all over the city." Additional developments still in pre-planning stages included CBD towers, under-utilised fringe sites, building conversions, wider estate developments and new low-rise buildings in greenfield suburban areas.
Real Estate Institute chief executive Colleen Milne said affordability and supply were the main catalysts for Auckland's housing problems.
"Apartments make excellent use of the land and often provide extra facilities, off street parking and location."
The research follows warnings that an over-supply of low-quality apartments could send prices plummeting.
At 56, Paul Slattery has just sold his Auckland house for $180,000 over its CV and is now looking to buy a mortgage-free apartment.
"Why spend $500 a week paying a mortgage and having a million dollars' equity when you can might as well have no mortgage and a smaller house?"
The West Auckland carpet cleaner bought his "standard three-bedroom nappy valley" Massey West home 25 years ago for $87,000. But after suffering ill-health and having several stints in hospital, he decided to downsize and put his home on the market.
It has a CV of $620,000 but sold at auction last week for $800,000.
"I'm 56, I'm getting old. I don't really want to have a whole house to maintain. I was thinking an apartment would be quite good," said Mr Slattery, who shares the house with his daughter.
"If I could get into a complex I could meet other people and there's no maintenance involved.
"I just pay the body corporate fee."
Mr Slattery has made about $520,000 after paying off his mortgage and expenses.
He wants an apartment with sea views and is prepared to pay up to $400,000, which in some new developments would only get him "one bedroom with no view".
Of the apartments available within his budget, many of those with sea views were leasehold properties, came with hotel leases or had weather tightness problems, he said.
He was also considering beachfront apartments in Paihia or Mt Maunganui which were on the market for between $300,000 and $400,000.
Mr Slattery said he had cleaned many inner city apartments over the years and seen the best and the worst on offer in the Auckland apartment market.
We can't say 'peak to trough' because we don't yet know if we have hit rock bottom.