Apartment living set to multiply

Inner-city Auckland's apartment numbers have ballooned by almost 20 per cent, from 11,500 units where 20,700 people lived late last year, to 13,500 apartments occupied by around 25,000 people.

But not all units are full.

The brisk apartment rise has forced rents and vacancy levels down as tenants get a wider choice of units, leaving many landlords struggling to fill their places.

Other debt-laden landlords, hit by sinking rents and high interest rates, are facing much higher outgoings.

Developers are now busy putting up an extra 2060 units, helping to expand the inner-city population as CBD residents get a head for heights.

The country's most qualified apartment data specialist, analyst Ian Mitchell of consultants DTZ in Wellington, has tallied the city's apartment numbers and found the sector is far from running out of steam. The latest data shows apartment numbers rose 17 per cent between his survey last year and data compilations just completed.

This is despite predictions from specialists like property-market analyst Kieran Trass of Hybrid Group who late last year predicted an apartment crash, saying 13 per cent of units were vacant.

The planning department at Auckland City Council has noticed far fewer resource consent applications for tower blocks which became popular at the start of this century.

But Mitchell has found many big blocks far from finished and developers in the throes of putting up a further 2060 units. He cited examples of work under construction, such as Fort St's 38-level Residences@Harbour City, blocking views from the Vero Centre standing to the south and spanning Shortland and Fort Sts. Multiplex (NZ) Constructions is almost finished that new block and tenants will soon move into its teeming 378 units.

Vero's highbrow lawyer and business services tenants fear their new neighbours' balconies will soon offer less- than-appealing views. The spectre of smoking residents and their laundry polluting vistas - which were once uninterrupted of the harbour and the North Shore - had resulted in some Vero tenants scrambling to move higher up that 40-level tower and escape Residences.

Mitchell calculated that average apartment occupancy rates were equivalent to 1.8 people, so when all the units now being built are finished, the inner-city area will have a total population of 28,000.

Working on the assumption of a $300,000 average unit price, the city's $3.2 billion stock of units will soon inflate to $4.4 billion.

And that is far from the end of it either.

Mitchell found a further 2340 units proposed and a further 3300 mooted and said that, by 2009, the city could have 21,200 units.

CBD apartments were commanding rents of around $450 a week in 2003, he found. This fell to $425 in 2004, $360 last year and around Christmas was $345 a week.

Martin Dunn of City Sales concurs, calculating average rents of $410 in 2003, $355 by 2004, $344 by last year and now $331.