Living the high-density life

By GRAHAM REID

If you are an Auckland property developer, you could adopt the line from Kevin Costner's Field of Dreams as your motto: Build it and they will come.

Just who "they" might be is open to speculation, but there will be a lot of them. An Auckland Region Growth Forum report predicts 500,000 people will be living in high-density or unit-title housing - townhouses, apartments, high-rise flats - by 2050.

That would be a quarter of Auckland's expected population, compared with the 12 to 13 per cent who now live in unit-titles. It is ordained that 70 per cent of the future population growth will be within present boundaries. We are going up rather than out.

Demographers can offer clues from trends as to who will be living in the apartments, but trends can change and what Auckland's population might look like in 47 years is impossible to know with certainty.

Simply go back the same amount of time.

In 1956, Auckland's population was around 400,000 and at the Parade of Homes in Auckland the big news was the design feature called "a carport".

Migrants were mostly white and predominantly British.

Few forecasters then would have suggested that in 2003 the world's largest Polynesian city would also be home to many thousands from India, Southeast Asia, China, Korea and Taiwan.

What they knew for certain is we would all be wearing identical one-piece space suits and getting around in flying cars. There is the folly of predicting.

Cautious demographers look at trends mindful that something unexpected - the Sars virus, a rapidly rising dollar or a change in immigration laws - can change projections rapidly. But the remoteness we once felt from the world is now perceived as a virtue.

Graham Crews, senior lecturer in real estate with Massey University, says the fundamental dynamic of the property market has been changed by the globalisation of New Zealand.

"The tyranny of distance is something economists in New Zealand have talked about since we started trading ... but that has suddenly become an asset rather than a liability, because people are looking for somewhere safe and secure, and clean and green. When you add stable government, lack of corruption, robust property and contract law, and the low value of the dollar, we are very attractive."

Add to that the bulge of baby boomers going through the national demographic and a young Polynesian population.

While demand for stand-alone homes in Auckland will remain high - in 2050 three-quarters of the population is expected to be in traditional housing - there will be different expectations of lifestyle options.

David Lindsay, a strategic analyst with the Auckland Regional Council and a representative of the Growth Forum team (made up of representatives from each of the councils), says unit-title dwellings such as townhouses, apartments, and low- and high-rise flats have increasing appeal across a wide demographic.

There are young singles who prefer a lifestyle that doesn't require lawnmowing on weekends, through to transient foreign students, and older people trading down from their homes to live in intensive housing.

The advantages are security and proximity to amenities in many instances, which includes entertainment options, medical services and shops, and the more modest capital outlay as opposed to that required for a stand-alone home on a section. A townhouse or flat is a foot into the property market for young couples.

There is also evidence women in their 20s and 30s are buying into unit-title dwellings for financial and physical security. Because many are not entering long-term relationships or having children, or having them later, their purchase becomes an investment property.

"A big part is privacy," says Martin Dunn of City Sales, which specialises in apartment sales. "If you take a 28-year-old telephone executive, her alternative was to buy a townhouse in Glenfield and have a couple of flatmates, whereas she could now buy a pretty smart apartment on High St or Princes Wharf that is one bedroom, but quite spacious and glamorous, and have a more private lifestyle. That sort of person is often frenetically busy and has no interest in a garden."

Dunn says since he set up City Sales in '97 - he has 30 agents working for him, including six Chinese, four Korean, and a Japanese and Russian - he has seen rapid changes in the market.

The group he calls "lifestylers" - aged 50 and up with a beach home and a modest but comfortable inner-city apartment - has grown significantly. The capital value of their family home was so high, they sold up to buy into the other options. As baby boomers realise the value of their suburban homes, they too may look to options like inner-city apartments when the kids leave home, for the security and economies of the lifestyle, and because of traffic problems.

Within the Asian market, he has noticed an internal movement into larger or better apartments as they become more established.

Drive around Auckland - or better, be patient and take a train to look at developments around the rail corridors - and the pattern is evident: low-rise boxes of variable quality and usually modest but comfortable size.

But soon Auckland will enjoy the range of housing stock seen in the more prosperous international cities. More sophisticated blocks are on the horizon to meet a more sophisticated and moneyed market.

Brian Sutton is executive director of the Starline Group, which had interests in Quay Park on the waterfront, but is now concentrating on its Gulf Harbour holdings. "What you are seeing is a market coming of age. If you look at any overseas major city it has a range of housing stock immediately available to the city. We haven't seen the top-end product yet. We'll continue to see a more discerning market."

While there will be internal market movement - Sutton says we are becoming more comfortable with apartment-style living - there will also be an impact of expatriates returning. Those who haven't come back to embrace a quarter acre and a lawnmower will want top-quality apartments.

But one large sector of the potential market isn't being catered for: those with children.

Dunn: "I don't think the New Zealand Kiwi family culturally accepts apartment living for littlies. The other side to that is most of the apartment market is studio ones and twos. There really isn't a great proportion of three-bedroom, and virtually no four-bedroom, apartments. A three-bedroom apartment now starts at about $400,000 so people probably don't see any great advantage in going from a similarly priced house in Glendowie to a small, $400,000 three-bedroom in the city."

There is also a ceiling at the top end because of a lack of available options, which may also change as the developments around Britomart and the Viaduct open.

"The apartment market stops at the moment at $600,000," says Dunn, "and that's an expensive apartment. There isn't a real market in that $600,000 to million-dollar bracket. There are apartments that sell in that, but they are more of a rarity at the moment."

But if the top end is coming, the bottom is already here. There is concern some areas, especially those on the periphery of the city and not close to transport routes, will become high-density ghettos, often providing meagre accommodation for lower-income workers who have migrated to the city from the provinces.

So who will be among the half million people living in unit-title properties in the middle of the century? A cross-section covering all social, cultural and financial demographics, as far as we can guess.

Lindsay: "There are trends coming that we haven't seen yet. There is social evolution and things which aren't even on the horizon. A lot of it is out of our hands and that is the tightrope we walk, between providing for who's here at the moment and flexibility for who might come down the track. I think there's going to be continuing diversity of ethnicities and demand for these buildings, but the demand will be for good quality environments and neighbourhood communities."

Sutton of Starline Group concurs: "It's going to keep growing. If nothing else changed, the pressures on the transportation infrastructure are going to drive it that way.

"Unless technology helps to solve that," he laughs sceptically.

And cars might fly.