$1m apartment shock: Buyer left stunned after $224k price jump

Marketing material shows how the St James Suites apartment block will look on completion.

An Auckland apartment buyer got a $224,000 price shock when the unit he had agreed to buy for $775,000 became $999,000.

The price rise is for a St James Suites unit, planned to be built in a tower on Queen St, where the New Zealander wanted to live but the price shock means he will not go ahead.

Tower developer Relianz sent letters to buyers this week telling of funding issues which had resulted in bigger deposits being required.

The 39-level 309-unit tower is planned to be built beside the historic St James Theatre where Auckland Council struck a deal to lend $15 million, although it said this week no money had yet been advanced and certain conditions had to be met before it was.

The shocked St James buyer said that at $999,000, the place had become too expensive, would take too long to build and he had doubts about the project.

The man, who travels in Asia, said he was keen back in 2014 when he bought via an agent.

"Because I have lived in Auckland for a long time and I know the location is probably the best out of all developments in the market, we decided to sign the sales contract on the same day in 2014.

"The price agreed originally was $775,000 for a two-bedroom unit with a car park, expected completion date late 2018.

"Being a Kiwi, we only had to deposit $20,000 initially and top up to 10 per cent later on. Inside the contract, the developer has to satisfy the financial conditions by end of 2015, proving that they meet the criteria from the lenders to show the feasibility of the project before they confirmed and proceeded with the construction and restoration of St James Theatre. This criteria was actually met in late 2015 and developer confirmed to all buyers on this," he said.

However, he had followed publicity on apartment price rises on other projects and on Monday, his solicitor was told of the changes to the contract for his unit.

The options were unpalatable: "Either agree with the new price of $999,000 or a refund of deposit plus interest. We will most probably take the refund plus interest. This is quite frustrating from our point of view because we were actually going to move back to Auckland with my family," he said.

His agent in Asia has also told him the project time line has changed and the tower will now not be completed till 2020.

"This is still three more years to go and there are just too many uncertainties," he said.