The Business Herald’s new column offers insight into what those on the inside of the property industry are talking about, what worries them, what they’re celebrating, the rises, the falls and who’s doing what.
From Hobsonville and Auckland’s civic heart to Asia, Singaporean buyers are being tempted to buy units in two of our prominent new apartment blocks, with an entry point into one of $1.05 million.
The under-construction Catalina Bay Apartments in northwest Auckland are being promoted to prospective buyers via Knight Frank, marketing the waterfront block being developed by Willis Bond, headed by Mark McGuinness.
Interested buyers were able to see the block showcased at an event in Singapore on October 18, where they were told they’ll be buying freehold without stamp duty and “no explicit capital gains tax”.
Knight Frank didn’t say it, but Singaporeans and Australians are exempt from our foreign buyer ban, and allowed to buy, trade and rent out our property. Prices of homes at Catalina Bay Apartments start from $1.05m (SGD$860,000).
McGuinness said deposits were already taken on 80 per cent of the places, mostly to local owner-occupiers.
“Interestingly we have seen an uptick in inquiries and sales over the last week with two sales under way. The trip to Singapore [was] primarily to attend a conference. We thought that while we were there, we would use the opportunity to meet some Singaporeans who are potentially interested in buying an apartment. We have sold a small number of apartments over the years to people from Singapore. Construction at Catalina Bay is progressing well too with the roof planned to go on any day now,” he said.
Nicholas Keong, Knight Frank Singapore’s head of residential and private office, says the agency’s The Wealth Report 2023 shows New Zealand ranking in the top seven countries of choice among Singaporean home buyers, who are especially drawn to Auckland.
“Not only are they attracted by the lifestyle on offer, education options and long-term migration plans, they also recognise the long-term investment appeal of the city, which has a strong track record of capital appreciation and rental growth.”
So will the buyers move here? Unlikely because Knight Frank then went on to say: “Rents for Auckland properties have seen a 28 per cent y-o-y increase over the last six years. Meanwhile, New Zealand’s interest rate has also shown signs of peaking, with the cash rate holding steady at 5.5 per cent over the last two quarters.”
And it seems Knight Frank isn’t the only apartment seller looking to Singapore.
John Love, of Love & Co, promoted unsold units from his Civic Administration Building (catchily named The CAB) apartment project in the ex-Auckland Council offices at Singapore hotel Raffles last month. “A pleasure to be able to present last night in conjunction with Bayleys Real Estate at the Great Room at Raffles. We had a great turnout to hear about The CAB at Civic Quarter, and also provide a general update on the NZ market,” Love said a month ago.
Asked this week how he fared, Love said of his CAB: “We have contracts conditional on approximately $3m of stock from Singapore. Australia and Singapore are getting focus due to the citizens still being able to purchase NZ property. Singapore also has seen increased capital gains tax and stamp duty, meaning buyers from there are being forced to look offshore compared to paying massive extra taxes on additional properties there.”
Could supermarket exit barriers - no-scan, no-leave - help challenge thefts in this country, so folk like National Business Review owner and publisher Todd Scott don’t feel they have to attempt a citizen’s arrest?
A Kiwi who’s moved to London recently joined the ranks of those shopping at barrier-barred Sainsbury’s, where customers must scan receipts at self-checkouts to be able to leave.
Yes, we’re talking physical obstacles here. Britain’s Daily Mail in May reported outrage from shoppers, “slamming” the giant for the new gates which bar their exit till they’ve scanned.
Could Woolworths, New World, Pak’nSave and others install those here to stop thieves?
“The subject matter experts who would look into this are not available at this time,” Foodstuffs told Property Insider.
Woolworths gave a longer reply: “We’re not looking at introducing this measure in our stores at the moment. We are currently rolling out a number of other security measures.” It’s ploughing $45 million in over the next three years to add further security and train staff to deal with conflict.
In the past six years, Woolworths New Zealand suffered a 303 per cent increase in physical assaults, an 806 per cent rise in security incidents and a 326 per cent increase in thefts. New measures being introduced in the coming months include 30 additional trolley lock systems, new camera technology at self-checkouts in more stores, and double entry gates at 12 stores.
New camera technology at self-checkouts was live in four stores by August with a further 16 stores to have the technology by the end of 2023.
Costco Wholesale, headed Downunder by Patrick Noone, has probably come closest to this so far in New Zealand.
You can’t leave the Westgate mega warehouse without an anti-theft check. Its debut store has two “checkers” at the exit. They view receipts and can be seen counting the number of items on the receipt and numbers in the vast trollies.
Talking of Noone, Costco’s country manager for New Zealand and Australia retires soon but he’s not letting the grass grow. Work has started on the new A$50m ($54m) Ardeer Costco in Melbourne’s northwest, demolishing an older building on the site for the new warehouse.
Noone is an Australian with a North American accent, from working years in Canada. He is a retail pioneer, opening the first Costco warehouse in Australia in 2009, which then led it to become a huge force with 15 outlets there.
He’s done 33 years with the American business and visited New Zealand many times to eventually open our maiden outlet, even taking then Prime Minister Jacinda Ardern on a tour down the aisles.
How’s it doing here? Costco will never reveal its numbers. But insiders say it has around 170,000 paid-up Kiwi members, each forking out $60/year. If true, that’s $10.2m annually - not even taking into account store revenue or profits.
“I understand your interest in the numbers, but unfortunately, it is our global policy not to share them,” a spokeswoman told Property Insider recently.
We know for sure that Costco had 150,000 members earlier this year (they told us when they iced their cake with that number), so 170k makes some sense. The person who told Property Insider would certainly know because they’re very close to operations.
But back to Noone, who in talking retirement disclosed to the Australian on August 27 that the chain struggled somewhat with its Aotearoa debut last September 28. He recalled how in Australia in the early days, Costco had difficulty sourcing products, some suppliers saying they weren’t able to produce products in bulk sizes to meet the chain’s needs.
“That happens all the time when Costco enters a new market, and we had a similar problem in New Zealand, but not as bad as it was in the early days in Australia,” Noone recalled.
No one could ever really replace Noone for his popularity, skills, experience or knowledge. But Chris Tingman from Seattle will step into those big shoes later this year.
Mind you, Noone didn’t get everything right. He told Property Insider that the new West Auckland store would have everything from Deutz to diamond rings. No booze in this Kirkland-stocked store. It’s the trust area, Pat!
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
It was a lifestyle of flashy opulence - until the money ran out.