Archive | Market

Accor to run Chows’ Rotorua hotel

NZAX-listed property company Chow Group Ltd’s management company, CGML Ltd, has awarded the management contract for its Rotorua hotel to AccorHotels.

CGML bought the 30-year-old, 10-storey, 8000m² office Zens Centre at 1135 Arawa St in 2015 and is converting it into a 130-room hotel.

Director John Chow (pictured in front of the building with mayor Steve Chadwick) said it would carry a 5-star brand. Work on architectural plans has started and the conversion should start in July. It’s expected to open at the end of 2018 or early 2019.

AccorHotels already operates a Novotel in Rotorua and the ibis Rotorua Lakeside.

Ms Chadwick said the retail & tourism sectors were doing extremely well in Rotorua and its economy was performing above the national average: “Rotorua is growing & thriving. Our population now exceeds 70,000 and continues to grow, and unemployment is dropping. It’s important that we continue to build on these positive achievements, and projects such as the Chow Group’s new upscale hotel are critical to our success, improving our tourism infrastructure and creating work opportunities.”

Attribution: Company release.

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7 leases around Shore

Bayleys agents on the North Shore have completed 7 lease transactions in Albany, Browns Bay, Rosedale, Takapuna & the Wairau Valley. They were also involved in 5 sales at Bayleys’ Total Property auction on Wednesday (reported separately, link below).

Leases:

North-east

Albany

28 Corinthian Drive:
Features: 256m² retail, 10 parking spaces
Rent: leased in May for $135,960, parking $35/space/week, net excluding parking $117,760/year, premises rental $460/m²
Agents: Alex Strever, Eddie Zhong & Dean Gilbert-Smith

3 William Laurie Place, level 1:
Features: 378.05m² office, 11 parking spaces
Rent: leased in May for $111,672.50/year et + gst, parking $$30/space/week, net excluding parking $94,512.50/year, premises rental $250/m²
Agents: Dean Gilbert-Smith/Jane Sims & Ryan Dannhauser

Browns Bay

76 Clyde Rd:
Features: 89.1m² retail
Rent: leased in April for $34,000/year net + gst, premises rental $382/m²
Agent: Steven Liu

Rosedale

9 Beatrice Tinsley Crescent, unit A:
Features: 408m² industrial unit – warehouse 266m², showroom 64m², office 78m², 7 parking spaces (not separately charged for)
Rent: leased in May for $66,000/year net + gst, premises rental $162/m²
Agents: Laurie Burt, Ranjan Unka & Ashton Geissler

Takapuna

433 Lake Rd, level 3:
Features: 48.4m² office, parking space
Rent: leased in May for $12,468/year net + gst, parking $35/space/week, net excluding parking $10,648/year, premises rental $220/m²
Agents: Jane Sims & Chris White

Smales Farm, B-Hive, level 1, suite 114B:
Features: 27m² office, no parking
Rent: leased in May for $32,560/year net, premises rental $1206/m²
Agents: Dean Gilbert-Smith

Wairau Valley

18 Link Drive, unit 15:
Features: 498m² industrial unit – warehouse 434m², other area 64m², 13 parking spaces (not separately charged for)
Rent: leased in April for $100,000/year net + gst, premises rental $201/m²
Agents: Steven Liu, Trevor Duffin, Alex Strever & Eddie Zhong

Related story: Updated: Wairau Valley car yard sells at over $2000/m² at Bayleys auction

Attribution: Agency release.

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12 Total Property auction sales south of Auckland

All 6 properties in Bayleys’ third Wellington Total Property auction for the year were sold under the hammer on Thursday, and another 6 on the Coromandel, Waikato & Rotorua were sold.

South of the Bombays

Coromandel

243 Colville Rd (pictured above):
Features: Shelly Beach campground, 5.0627ha beachfront site operating under Top 10 Holiday Park brand, 5km from Coromandel township, comprising a variety of camping facilities plus manager’s accommodation & house
Outcome: sold as freehold going concern for $3 million
Agents: Josh Smith & Belinda Sammons

Thames

458 Pollen St:
Features: 2836m2 mainstreet site, Mitre 10 the anchor occupant, 1659m2 of buildings earthquake strengthened to over 67% of new building standard, various lease terms to Mitre 10 running to 2021 with renewal rights, plus small upstairs office lease to Home IT Solutions
Rent: $145,500/year net + gst
Outcome: sold for $2.165 million at a 6.7% yield.
Agents: Josh Smith & Mary Walker

Rotorua

Mangakakahi

81 Pururu St:
Features: 1012m2 industrial site, large yard area, 471m2 high-stud warehouse & office building previously split into 2 tenancies
Outcome: sold vacant for $401,000
Agents: Mark Slade & Brei Gudsell

Waikato

Paeroa

56 Grey St:
Features: 9800m² site, 1150m² ex-bulk petfood-processing facility
Outcome: sold vacant for $1.2 million
Agent: Josh Smith

7 Station Rd:
Features: High-exposure 1062m2 corner site with 900m2 warehouse/factory, ex Lemon & Paeroa bottling plant
Outcome: sold vacant for $420,000
Agent: Josh Smith

Te Awamutu

355 Rickit Rd:
Features: 653m2 road-frontage site, 410m2 building, fully leased to 2 established electrical tenants
Rent: $56,000/year net + gst
Outcome: sold for $760,000 at a 7.4% yield
Agents: Alex ten Hove & Mike Swanson

Wairarapa

Masterton

5 Albert St:
Features: strengthened & refurbished 1356m² commercial building, 1006m² of mostly office space leased to Department of Corrections for 9 years from October 2015, 350m² at the front of the building is vacant
Rent: $118,216/year net + gst
Outcome: sold for $1.275 million
Agents: Andrew Smith, John Pritchard & Dave Wish

Wellington

Lower Hutt

444 Cuba St, Lower Hutt.

444 Cuba St:
Features: 1295m² corner site, 300m² rear parking & yard area, high-stud 1100m² refurbished retail building, Hunting & Fishing in occupation for over 20 years, current 6-year lease from October 2014 plus one 4-year right of renewal
Rent: $86,800/year net + gst
Outcome: sold for $975,000 at an 8.9% yield
Agent: Mark Sherlock

MacKay House, 92 Queens Drive, level 2:
Features: 326m² office floor needing renovation, in 1960s building adjacent to Queensgate Mall, part leased to 2 tenants, two-thirds vacant
Rent: $31,500/year gross + gst
Outcome: sold for $50,000
Agents: Paul Cudby & Andrew Smith

Ngauranga

17 Glover St:
Features: 603m2 business 2-zoned narrow, bare site, 300m2 flat usable area, excavation required for greater footprint, concept plans for 270m2 warehouse
Outcome: sold for $280,000 at $464/m2
Agents: Matt Gibbs & Fraser Press

2 Hartham Place South, Porirua.

Porirua

2 Hartham Place South:
Features: 380m², 2-level cbd commercial building, tenant parking at rear, ground floor leased to Pacific Radiology, first floor occupied by law firm & physiotherapist with leases until 2019 & 2020 plus rights of renewal
Rent: $50,350/year net + gst
Outcome: sold for $712,000 at a 7.1% yield
Agent: Jon Pottinger

Waikanae

108 Main Rd:
Features: 161m² purpose-built dental surgery on 1019m² residentially zoned site with large parking area, 5-year lease to Lumino the Dentist from October 2016, with one 5-year right of renewal
Rent: $33,280/year net + gst
Outcome: sold for $582,000 at a 5.72% yield
Agents: Jon Pottinger & Stephen Lange

Attribution: Agency release.

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Updated: Wairau Valley car yard sells at over $2000/m² at Bayleys auction

11 of the 21 commercial properties auctioned by Bayleys on Wednesday in its third Total Property portfolio for the year were sold under the hammer. One more – 100 Hinemoa St, Birkenhead – has been sold post-auction.

The first were sold, followed by a lull, but 2 of the most expensive offerings were well down the auction list.

One was a Wairau Valley car sales yard, set among a line of lowrise buildings jammed between the Northern Motorway & Wairau Rd on the North Shore, a stretch where the height limit is now 20m under the unitary plan.

The car yard was sold at $2365/m², which means it’s destined for multi-level development.

2 properties were sold for $4 million, both in Henderson. The first was a bank branch on Great North Rd, sold on a 5.5% yield, and the second, a Supercheap Auto outlet in the Lincoln North shopping centre, sold on a 5.3% yield.

CBD

Victoria Quarter

166 Hobson St:
Outcome: sold prior
Agents: Sarah Boles & Terry Kim
Story, 11 May 2017: 12 years after demolition order scrapped, Hobson St building sells

Isthmus east

Panmure

63 Queens Rd:
Features: 97m² retail unit on 2 levels occupied by Willow Hair Design, parking space
Rent: $24,000/year net + gst on new 3-year lease with 2 2-year renewals
Outcome: passed in
Agents: Ken Hu

Parnell

385 Parnell Rd, unit E:
Features: 54m², retail fully leased on month-to-month basis, 2 secure parking spaces
Rent: $32,760/year net + gst
Outcome: sold for $505,000
Agents: Andrew Wallace & Cameron Melhuish

Remuera

563 Remuera Rd:
Features: 144m² cafe, Upland Rd shopping village
Rent: $76,104/year net + gst
Outcome: sold for $1.6 million
Agents: Cameron Melhuish & Andrew Wallace

Isthmus west

Freemans Bay

42 College Hill:
Features: 511m² section, house with 124m² floor area, onsite parking
Rent: $44,500/year net + gst
Outcome: passed in at $1.5 million
Agents: James Were & Scott Kirk

44 College Hill:
Features: 389m² section, house, onsite parking
Rent: $44,000/year net + gst
Outcome: passed in
Agents: James Were & Scott Kirk

Mt Roskill

74 Carr Rd:
Features: 835m² site, 697m² single-level building
Outcome: withdrawn from auction, changed to sale by deadline private treaty
Agents: Tony Chaudhary & Sunil Bhana

North

Kaikohe

39 Station Rd:
Features: 7199m² commercial property in 2 titles
Outcome: withdrawn from auction
Agents: John Greenwood & Paul Dixon

Warkworth

The Grange, 67 Auckland Rd, unit 11:
Features: 59m², Fish Nets fish & chips shop on 10-year lease in new retail development
Rent: $30,975/year net + gst
Outcome: passed in at $480,000
Agents: Matt Lee, Jan Hutcheson & James Chan

North-east

Albany

75 Corinthian Drive, unit L1:
Features: 197m² first-floor office, new 6-year lease in place with renewal rights, 5 parking spaces
Rent: $58,800/year net + gst + outgoings
Outcome: sold for $1.095 million
Agents: Jane Sims & Tonia Robertson

Birkenhead

Updated: 100 Hinemoa St:
Features: 757m² corner site, 421m² 2-storey building
Rent: $103,907/year net + gst from 6 tenancies
Outcome: passed in at $2.7 million, sold post-auction for $2.7 million
Agents: Simon Aldridge & David Huang

27-33 Mokoia Rd, units 4, 5 & 7:
Features: 59m² total, 3 strata units next to Highbury mall, tenants are a dry cleaner & kebab shop, third unit vacant
Agents for all 3: Michael Nees, Owen Ding & Oscar Kuang
Unit 4, vacant:
Outcome: passed in at $300,000
Unit 5, kebab shop:
Rent: $24,000/year net + gst, lease running to 2030
Outcome: passed in at $470,000
Unit 7, dry cleaners:
Rent: $18,942/year net + gst, lease 6 years from last October
Outcome: passed in at $300,000

225 Onewa Rd:
Features: cross-lease, 1/3 share in 913m², vacant ex-surgery, 5 parking spaces
Outcome: sold for $650,000
Agents: Michael Nees, Owen Ding & Oscar Kuang

Rosedale

7 Vega Place, unit E:
Features: 272m² industrial unit,
Rent: $52,000/year net + gst from established tenants on new leases
Outcome: sold for $980,000
Agents: James Kidd & Matt Mimmack

Silverdale

1 Polarity Rise, ground floor:
Features: 145m², 2 shops on 2 titles for sale as one
Rent: $61,966.70/year net + gst + opex
Outcome: passed in
Agents: Ashton Geissler, Eddie Zhong & Mustan Bagasra

Takapuna

424 Lake Rd:
Features: 3 tenancies
Rent: $61,950/year net + gst, rising to $63,383 in November,
Outcome: sold for $1.5 million
Agents: Michael Nees & David Huang

Wairau Valley

107 Wairau Rd:
Features: 1184m² site, 13-year-old car dealership Car7, 40m² office 
Rent: $63,600/year net + gst, redevelopment potential up to 20m height limit
Outcome: sold for $2.8 million at $2365/m²
Agents: Brian Caldwell & Ranjan Unka

North-west

Henderson

Lincoln North Shopping Centre, 192 Lincoln Rd, unit A1:
Features: 756m² retail unit, 7-year lease to Supercheap Auto from July 2016
Rent: $212,292.82/year net + gst
Outcome: sold for $4 million at a 5.3% yield
Agents: Matt Lee, Tony Chaudhary & James Chan

373 Great North Rd:
Features: 808m² corner site, 1240m² floor area, BNZ as tenant on lease to 2020 with further renewal rights, basement parking
Rent: $219,360/year net + gst + opex, rent review in December
Outcome: sold for $4 million
Agents: Mike Adams & Laurie Burt

South

East Tamaki

44D Andromeda Crescent:
Features: 400m² industrial unit – high stud, clearspan warehouse 300m², office/amenities 40m², mezzanine 60m²
Outcome: sold for $735,000
Agents: Nelson Raines

Mangere Bridge

19 Coronation Rd:
Features: 273m² town centre site, 160m² bank branch, seismic rating 67% of new building standard
Rent: $34,000/year net + gst
Outcome: sold for $973,000
Agents: Nicolas Ching & Beterly Pan

South of the Bombays

Hawke’s Bay

Napier, Onekawa

Deco City Motor Lodge, 308 Kennedy Rd:
Features: 2682m² site, 30 studios and 1- & 2-bedroom units, conference suite, manager’s quarters, freehold going concern, Qualmark 4.5 stars, in Host Accommodation Group, seismic rating 80% of new building standard
Outcome: no bid
Agents: Paul Dixon, Daniel Moffitt & Carolyn Hanson

Attribution: Company release.

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5 intensive residentials & 2 warehouses sell at Barfoots

Barfoot & Thompson sold 5 intensive residential properties – apartments, townhouses, suburban units, cross-leases – at its city auctions on Wednesday-Thursday, leaving 9 unsold, and sold both commercial properties on offer.

After some long silences during the residential auction yesterday, one of the warehouses was brought back and sold after some spirited bidding. The other warehouse was sold shortly after auction.

Apartments

CBD

Queen St

Queen’s Residences, 8 Airedale St, unit 1104:
Features: one-bedroom apartment, study, balcony
Outgoings: body corp levy $1858/year
Outcome: sold for $470,000 at auction brought forward
Agents: Simon Cai & Terry Kim

Uptown

Amora, 100 Greys Avenue, unit 7D:
Features: one-bedroom apartment, management contracted to the hotel until 2020, hotel pays body corporate & council levies, annual CPI increases for income
Outgoings (paid by hotel): body corp levy $4531/year + one-off $1628 special levy to install common area air-conditioning
Income assessment: exceeding $9800/year + gst
Outcome: sold for $215,000
Agents: Mike Campbell

Victoria Quarter

Harbour Green, 11 Union St, unit 1110:
Features: refurbished 2-bedroom apartment, balcony, carport
Outgoings: rates $1316/year including gst; body corp levy $5185/year
Income assessment: $520-540/week
Outcome: no bid
Agents: Selina Zheng

SugarTree, 27 Union St, unit 809:
Features: 2-bedroom apartment, 2 bathrooms, study, 2 balconies, storage locker, parking space
Outgoings: body corp levy $6999/year
Outcome: passed in at $870,000, back on market at $890,000
Agents: Livia Li & Alan Guo

Isthmus east

Epsom

1 Epsom Avenue, unit 1:
Features: cross-lease, 1/10 share in 1438m², 3-bedroom unit, balcony, carport
Outcome: no bid, back on market at $765,000
Agents: George Fong & Paul Sun

614C Manukau Rd:
Features: cross-lease, 1/4 share in 800m², 3 levels, 4 bedrooms, 4 bathrooms, 2 living areas, double internal-access garage
Outcome: no bid
Agents: Diana & Peter West

Mission Bay

Garden Court, 105 Tamaki Drive, unit 12:
Features: 2-bedroom apartment, parking space; the asset offered was 6500 shares in Garden Court Flats Ltd & the right to vacant possession of this flat
Outcome: passed in at $1 million
Agents: Andy Dye

Parnell

Farnham Terraces, 8 Farnham St, unit 2A:
Features: 140m², 2-bedroom terrace, 2 bathrooms, storage locker, tandem parking
Outgoings: body corp levy $6278/year
Outcome: passed in at $931,000
Agents: Selina Zheng & Jason Li

Royal Oak

16 Beckenham Avenue, unit 1:
Features: cross-lease, half share in 817m², 3 bedrooms, 2 bathrooms, internal-access garage
Outcome: sold for $1.301 million
Agents: Leonie Stabler & Di Lynds

St Johns

23 Strong St, unit 1:
Features: cross-lease, quarter share in 622m², 2-bedroom unit, deck, parking space
Outcome: passed in, back on market at $610,000
Agents: Cristina Casares & Jacqui Freeman

Isthmus west

Eden Terrace

10 Flower St, unit 105:
Features: 2-bedroom apartment, parking space
Outgoings: body corp levy $3912/year
Outcome: no bid
Agents: Jason Buckwell

Herne Bay

37 Sentinel Rd, unit 2:
Features: cross-lease, 1/3 share in 1442m², 3-bedroom freestanding townhouse, 2 bathrooms, attic, double garage
Outcome: sold for $1.56 million
Agents: Jack Atherton & Sherryl Jones

Mt Albert

21 Burch St, unit 6:
Features: 86m², 2-bedroom unit, balcony, garage
Outgoings: body corp levy $1040/year
Outcome: sold for $795,000
Agents: Lisa Redgrove & George Damiris

Mt Eden

69 View Rd, unit 4:
Features: cross-lease, 1/6 share in 769m², 2-bedroom apartment, offstreet parking
Outcome: passed in, back on market at $745,000
Income assessment: $540/week current
Agents: Frank Excell & Ketiesha Elliott

Commercial

Isthmus east

Onehunga

154 Captain Springs Rd:
Features: 1793m² site, 1321m² warehouse with small office, 300m² front yard, 250m from Te Papapa Station
Rent: $122,000/year net + gst + outgoings on monthly arrangement
Outcome: passed in at $2.275 million, sold for $2.476 million after further negotiation
Agents: James Marshall & Nick Wilson

Penrose

922 Great South Rd:
Features: vacant 1163m² site, 482m² warehouse, showroom & office, 450m² yard, 21 parking spaces
Outcome: passed in with no bid, sold for $1.302 million after auction reopened
Agents: Nick Wilson & James Marshall

Attribution: Auctions.

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Updated: 2 more sold; apartment sales take hefty discounting

Published & updated 19 May 2017
Update: 2 more apartments were sold shortly after yesterday’s auction at Ray White City Apartments, taking sales to 5 out of 7. The post-auction sales were at HarbourCity & The Wakefield, details below.

Under the hammer

3 apartments were sold under the hammer out of 7 auctioned at Ray White City Apartments yesterday, but the road to a sale demonstrated the slide in pricing in Auckland’s residential markets.

A unit in the Aura on Cook St was knocked down after the vendor’s bottom price was revealed, followed by a long pause before it was taken up.

That was followed by the sale of leasehold units in Q City at the top of Queen St and Scene 3 in Quay Park. The unit in Q City (pictured) went for $13,000 under the declared reserve.

2 small units in Winsun Heights – real shoeboxes – were passed in.

Updated details:

CBD

Commerce/Gore

Updated: HarbourCity, 16 Gore St, unit 37A:
Features: 38m², one bedroom
Outgoings: rates $3077/year including gst; body corp levy $2479/year (excluding water & gas); $5099 levy for remediation investigation & legal fees, of which first instalment $1283 paid
Income assessment: $430-460/week furnished
Outcome: passed in at $300,000, sold shortly after the auction for $315,000
Agents: May Ma & Mark Li

Learning Quarter

Updated: Wakefield, 18 Wakefield St, unit 2C:
Features: 98m² including 4m² deck, 2 bedrooms, 2 bathrooms, parking space, renovations completed
Outgoings: rates $1671/year including gst; body corp levy $4012/year
Outcome: passed in at $750,000, shortly after the auction for $805,000
Agent: Dominic Worthington

Quay Park

Scene 3, 30 Beach Rd, unit 1408:
Features: leasehold, 77m², one bedroom, study, parking space
Outgoings: rates $1810/year including gst; body corp levy $5496/year, ground rent $11,867/year
Outcome: sold for $151,000
Agent: Andrew Bond

Uptown

Q City, 15 City Rd, unit 10H:
Features: leasehold, 40m², fully furnished one bedroom, balcony
Outgoings: rates $1050/year including gst; body corp levy $3985/year, ground rent $5642/year
Income assessment: $450-480/week furnished
Outcome: declared reserve $99,000, sold for $86,000
Agent: Liz McCarthy

Winsun Heights, 113 Vincent St, unit 12A:
Features: 17m² top-floor studio
Outgoings: rates $1008/year including gst; body corp levy $2774/year
Income assessment: $280/week current, appraised estimate $350/week
Outcome: passed in at $125,000
Agent: Ann Bennett

Winsun Heights, 113 Vincent St, unit 12B:
Features: 14m² top-floor studio
Outgoings: rates $996/year including gst; body corp levy $2774/year
Income assessment: $280/week current, appraised estimate $320/week
Outcome: passed in at $130,000
Agent: Ann Bennett

Victoria Quarter

Aura, 53 Cook St, unit 713:
Features: 49m², refurbished 2 bedrooms, parking space
Outgoings: rates $1287/year including gst; body corp levy $4949/year
Income assessment: $560-600/week furnished
Outcome: sold for $440,000
Agents: Ron Yang, Damian Piggin & Daniel Horrobin

Attribution: Auction.

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2 Shore commercial properties sell at auction

2 North Shore properties were sold under the hammer at Colliers’ commercial auction yesterday – a Milford property near North Shore Hospital with 2 buildings on it, long occupied by medical sector tenants but more likely a development prospect, and a Wairau Valley mechanic’s workshop.

North-east

Milford

193 Shakespeare Rd:
Features: 1148m² site zoned mixed use, 2 buildings, floor area 348m², 16 parking spaces
Rent: $40,608/year net + gst holding income
Outcome: sold for $3.1 million
Agents: Euan Stratton & Deborah Dowling

Wairau Valley

114 Sunnybrae Rd:
Features: 951m² site zoned business light industry under unitary plan, floor area 519m² – warehouse 366m², office 153m², seismic rating 100% of new building standard; generic structure developed as a car parts & repair workshop
Rent: $85,000/year net + gst from new 3-year lease
Outcome: sold for $1.84 million
Agents: Euan Stratton & Matt Prentice

Attribution: Auction documents.

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National promise of 34,000 houses/decade for Auckland may add 2000/year

The headline is what matters in an election campaign, and the headline is that National is promising that, as the government, it will build 34,000 new houses on Crown land in Auckland over the next 10 years.

New Zealand has a record of not electing governments beyond 3 terms and National is ending its third term as the majority in a coalition, which jeopardises the chances of it being in a position to carry out the promise.

Social Housing Minister Amy Adams.

Amy Adams, Social Housing Minister and Minister Responsible for Housing NZ, revealed the figure in a speech at the Property Institute in Auckland yesterday. And then she proceeded to whittle it down.

The 34,000 is made up of 13,500 new social houses & 20,600 affordable & market homes.

Under the Crown Building Project, the Government will take down 8300 old, rundown houses.

Ms Adams said Housing NZ alone had over 50 housing developments under way in Auckland. The forward programme includes other housing projects already announced & underway:

  • Northcote, where 300 state houses will be replaced by 1200 new homes
  • Hobsonville Point, where the Government-owned Hobsonville Land Co Ltd (now HLC (2017) Ltd) is about to deliver the 1000th house in a programme to deliver 4500 homes
  • Tamaki, where the government-council regeneration project has a programme to develop 7500 new homes over the next 15 years, replacing the houses on 2800 Housing NZ properties
  • Other existing projects include 2700 new homes already announced under the Crown land programme, 580 houses under the Ministry of Social Development’s social housing reform programmes, and new homes for emergency & transitional housing.

By Ms Adams’ calculation, the Government would add 24,000 new – not previously announced – houses over a decade, though on the figures above the actual total might be less, perhaps down at 20,000, or an average 2000/year.

Comparing promises

Andrew Little.

That compares with Labour leader Andrew Little’s proposal last year for 100,000 new affordable houses nationally over 10 years, half of them in Auckland, which would include partnerships with private developers.

So, on top of existing projects, Labour has promised 5000 and National 2400 extra houses/year for Auckland.

Labour also promoted a dole for apprenticeships policy which would subsidise employers to take on around 4000 young people for on-the-job training in fields including building & construction.

Phase one of National’s Auckland housing programme, which covers the next 4 years, would cost $2.23 billion and be funded through Housing NZ’s balance sheet and $1.1 billion of new borrowing that the Government has approved as part of the business case.

Phase 2 in the latter years would be funded through the market housing development part of the programme & rental returns.

Ms Adams said ministers had also agreed that Housing NZ would retain dividends & proceeds from state house transfers, to help fund the building programme.

A glance at reality

The promises come after a period of extremely high immigration – a net inflow of 228,000 nationally over the last 4 years, 108,000 of those in Auckland, requiring 40,000 homes at an average 2.7 persons/household.

Building consents in Auckland over those 4 years started low, 6500 for the March 2014 year as the country was still gradually easing out of the global financial crisis, and totalled 34,200 for the 4 years.

Assuming 100% construction of consented homes (which is not normal, but I don’t have the exact figure), Auckland fell short of housing the net migrant inflow by almost 6000 homes over those 4 years. That housing requirement ignores, completely, the net flow of people within the country.

The National proposal might fill the gap if immigration eases, but on the slim information from the minister it would encourage pricing to stay high. On my calculation in February, consents for new homes nationally (excluding land) have risen 34% in value over the last 5 years – after a slow shift from the bottom of the market, between 6-7.7%/year for the last 4 years.

The land price equation in Auckland can be partly met by intensification throughout suburbia, land prices falling because of the freer availability of sites under the new unitary plan, and section sizes being reduced.

That doesn’t require tampering with rural:urban boundaries, which Labour has said it will eliminate. Those boundaries have a role in protecting non-urban land and in directing development into more efficient parcels.

Auckland also needs more infrastructure for housing development, but it needs to be in well devised communities with a supply of jobs nearby, not on the basis of rural carpetlaying. The local job requirement is fundamental but has been ignored as Auckland has spilled out along motorway corridors.

To catch up, New Zealand needs more builders with a longer future in the trade than the typical construction cycle allows. To do that, either the Government or some other industry supporter needs to ensure trade skills are being taught to enough people before a boom gets underway, and it makes sense to reduce booms, and therefore busts, with some smoothing of economic cycles (but not the total smoothing the US tragically & farcically tried in its attempt to avoid what became the global financial crisis).

As a cyclical high recedes, the building force needs attractive alternatives other than leaving for Australia. Some of that can come through infrastructure projects, which ideally should be separated in time from highs in house & commercial construction, thus reducing cost pressures as well.

Link:
Full Adams speech, 16 May 2017: Launch of Crown Building Project

Earlier stories:
16 May 2017: Little calls for end to negative gearing, and Property Institute calls it “cynical ploy”
6 March 2017: Auckland above 10,000 home consents/year again
10 February 2017: Smith exultant about figures that are plainly inflated
19 January 2017: Building consent highs still don’t match migrant demand
11 July 2016: Little sets out 8 planks to remedy housing issues
19 November 2012: Shearer proposes Government scheme to build 100,000 “entry-level” houses over 10 years

Attribution: Ministerial speechnotes & release, Statistics NZ tables, Labour releases, own articles.

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4.3% yield in Morningside reflects area’s transformation

Agents who sold a dual-frontage Morningside property on a 4.3% yield say the suburb is seeing changes under the unitary plan, improved access & intensive residential development that will transform it in a short timeframe.

Under the unitary plan, the property at 617 New North Rd is in the local centre business zone, which allows for retail, office, food, beverage, apartments & commercial services. “Developers may build up to 18m in this zone,” JLL agent Jarred Hill said.

Leases on this property run through to 2024, but around it considerable change is anticipated, partly arising from improved motorway & rail links: “It’s around 1.2km to the North-western Motorway system, a 12-minute walk from Kingsland village, and only a few minutes’ walk to Morningside railway station. Access will only improve once the city rail link upgrade is complete.”

Alex Wefers said the area was being developed and would see substantial population growth – up by a third (13,000) through to 2043. The Urbanaut craft brewery has just opened at 597 New North Rd, and the Station 580 apartment complex is due to open at 580 New North Rd late next year.

Isthmus west

Morningside

617 New North Rd:
Features: 943m² site, 2 buildings on one title with combined floor area of 505m², leased to the Unite Union & Peel to Pip Café, with 2-bedroom apartment occupied by café tenants, both leases have final expiries in 2024, 6 parking spaces, dual street frontage to Western Springs Rd & New North Rd
Rent: $108,398/year net combined rent
Outcome: sold for $2.5 million at a 4.3% yield
Agents: Alex Wefers & Jarred Hill

Attribution: Agency release.

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3 commercial sales at Wairau Valley, Te Rapa & Waikanae

Colliers has reported 3 sales around the North Island – a former gym, now office & warehouse, in the Wairau Valley (pictured) and properties at Te Rapa outside Hamilton and Waikanae outside Wellington.

North-east

Wairau Valley

6 Target Court:
Features: 3265m² industrial site, 1182m² floor area, originally a gym, now an office & warehouse, 28 parking spaces
Rent: $214,399/year net + gst holding income until 30 November from departing tenant
Outcome: asking $3.37 million, sold for $3.2 million + gst at a 6.7% yield
Agents: Nick Recordon, Matt Prentice & Jimmy O’Brien

South of the Bombays

Waikato

Te Rapa

4 Maui St:
Features: 2317m² site at the corner Church Rd, occupied by the Cock & Bull bar, 36% site coverage, 47 parking spaces
Rent: $242,000/year net + gst, new 6-year lease from April 2016
Outcome: sold for $3.26 million + gst
Agents: Alan Pracy  Justin Oliver, with a referral from Jolyon Thomson &  Ben Cockram

Wellington

Waikanae

3 Omahi St:
Features: 917m² site, 393m² office & retail, 10 parking spaces
Outcome: sold for $1.39 million + gst at a 6.98% yield
Agents: Dean Anderson

Attribution: Agency release.

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