"New build prices per square metre have increased since our last report. For a new apartment the average price in individual projects ranges from $9222 per sq m to $13,435 per sq m and for a new terraced and detached dwelling the prices range from $5787 per sq m to $10,773 per sq m, depending on typology and location.
"A key driver is the Auckland public's wariness of poor quality home environments and sometimes poor quality construction.
The apartments being built or planned tend to be larger and of higher quality than those built around the 2005 peak - the era of smaller, typically lower-quality 'shoebox' apartments."
McMahon says Auckland's rapidly maturing infrastructure has also made many new projects more desirable.
"In the period since our last residential report, we've seen good progress on City Rail Link construction, and the opening of the Waterview Tunnel.
"Once completed, the rail project will increase the desirability of apartments near train stations in areas such as Mt Eden and Onehunga, while the Waterview Tunnel makes it easier to travel to and from northwestern suburbs like Hobsonville Point."
McMahon says slowing sales do not indicate reduced demand, with population growth continuing apace and immigration policy changes unlikely to significantly reduce demand from buyers.
"The residential slowdown is less about base demand than pricing. We do think the median house price will reduce eventually, but by building less expensive homes at scale, not by price reduction of existing properties.
"How to increase that supply significantly is the problem, when funding is tight, materials and other costs of construction are high, and all the larger builders are at capacity already.
"New construction firms and techniques as well as new institutional private renters will be required, along with some imaginative thinking around policy, tenure and finance."ß
