Archive | Market

Institute figures show strong house sales lift

Auckland median down on May, up on June 2001

Auckland sales represented 43% of the national total, 50% of the national value in June, according to the Real Estate Institute’s monthly survey.

Total Auckland dwelling sales in June were 2657 for a total $842 million. Total New Zealand sales were 7486 for $1.679 billion, up from 6147 for $1.3 billion in June 2001. The national figures show a 22% rise in number, 29% in value.

The national median price was $184,000 in June, $188,000 in May, $177,000 in June 2001.

The Auckland median price was $261,800 in June, $266,000 in May, $253,000 in June 2001.

In metropolitan Auckland (excluding Rodney & Franklin districts), median prices were:

North Shore 564 sales at $286,000, May $280,000, June $272,500.

Waitakere 346 at $210,544, $207,000, $204,000.

Auckland City 863 at $300,000, $315,000, $290,000.

Manukau 507 at $256,000, $265,000, $250,000.

Papakura 64 at $200,500, $180,000, $187,000.

[Nobody works harder than the Real Estate Institute to turn statistics to advantage. I’ve abandoned the institute’s notion of statistical value throughout the era of the median numbers as displayed above, but was sent the latest batch of numbers a couple of days ago, along with the contradictory statements of the institute president. I don’t believe the monthly figures as presented above are a reliable indicator of anything, much like the grammatically nonsensical Massey University confidence surveys use a lot of cardboard to prove nothing. But, just this once, you can have the figures. Unless you really want them, it won’t happen again.

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Growth forum produces housing definitions

Want to know what you live in?

Auckland’s Regional Growth Forum has produced some housing definitions in an attempt to overcome confusion, but you have to wonder at high-density starting at 8 floors up.

A paper on terminology was presented to Auckland Regional Council’s growth forum committee last Wednesday by policy analyst Brian Waddell & North Shore City Council’s regional growth planner, Giles Hughes.

The definitions start with the farmhouse, at no more than 1 house to 4ha, but Mr Waddell said the most important measure was gross neighbourhood density.

Franklin councillor Jill Morris said real estate agents In the rural sector had a confusing array of terms: “Rural lifestyle, country living, rural-residential — all denote the same thing. You need another classification in there.”

In discussion on the chart presented with the paper, showing housing choices, councillors were concerned that transport modes presented alongside a rising density indicator (regular bus at a gross 15 dwellings/ha, regular rail at 25, rapid transit at 50, and 50% of all trips non-auto at 100 dwellings/ha) would be perceived as meaning those transport modes wouldn’t work below those levels.

That was how regional councillor Catherine Harland, who chairs the ARC’s regional passenger transport committee, took the chart. But ARC policy director Craig Shearer said it was an attempt to tie the region’s growth strategy and transport system together, while Mr Hughes said the references weren’t meant to be cut-off points but a guide.

The paper itself referred to redevelopment being sufficient to support investment in a better heavy rail service, and the Environment Ministry’s Auckland manager, Kathleen Ryan, said “there will be higher subsidies for public transport if higher densities are not achieved.”

The definitions

Farm house, gross density 1 dwelling/4ha & above

Rural lifestyle housing, typically below 4 dwellings/ha (and above the farm house level)

Conventional suburban house, single dwelling/allotment, site usually 450-1080m²/unit, gross neighbourhood density 8-12 dwellings/ha

Small-lot suburban house, site 300-450m²/unit, 12-18 dwellings/ha

Townhouse, usual site 200-350m²/unit, 16-24 dwellings/ha, own street access, own garden or courtyard

Home unit, 2-5 units/site, usual site 200-350m²/unit, 16-24 dwellings/haMedium density

Terraced house, attached dwellings sharing side walls, usual site 150-300m²/unit, 25-40 dwellings/ha

Lowrise apartment, apartments in a single building no higher than 3 storeys (which in Australia is a 3-floor walkup, above which a lift is required; no such requirement here), usual site 50-300m²/unit, 30-50 dwellings/haHigh-density

Midrise apartment, site usually below 150m²/unit, building 3-7 storeys, usually unit-titled with body corporate, 45-80 dwellings/ha

Highrise apartment, usual site below 100m²/unit, building above 7 storeys, 80+ dwellings/ha

Mixed-use development, mixture of residential & business uses, density ranges don’t change.The missing

Words like duplex, the Australian term denoting suburban attached dwellings, and the American condominium are missing.

Long absent from the real estate vocabulary because of its downmarket perception is the old word for many of these dwellings: flat. I figure it will make its return when the values of many of today’s apartments hit more realistic long-term levels than their grand starting prices.

Units that can’t hold their value will become flats, and the grander term apartment will be reserved for grander premises. A likely benchmark will be a $/m² level.

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Bayleys auction, 13 September

Apartments in three developments passed in

In the Bayleys auction room today, unit 1304 Heritage Tower (a sub-penthouse in the new tower building on Nelson St) was passed in with a top bid of $1.07 million. It has three bedrooms and three bathrooms and was taken to auction by the developers, Symphony Group.

Unit 16D of Quay West, a fully furnished two-bedroom apartment, was passed in at $485,000 and unit 301 of the Sebel hotel on the Viaduct Basin, a fully furnished one-bedroom suite which is part of Mirvac’s hotel management pool, was passed in at $400,000.

The one industrial lot offered at the Bayleys auction, a 233m² high stud warehouse with office, unit 6 at 517 Mt Wellington Highway, was passed in at $305,000.

On the Whangaparaoa Peninsula, 5.63ha of the Shakespear estate was passed in at $1.07 million. Subdivision plans have been drawn up for either eight or 46 lots for the land, fronting Okoromai Bay on the edge of the Shakespear regional park and just past the Gulf Harbour marina and golf course development. The property has been in the Shakespear family for four generations, since 1880, but recently has been grazed by regional council stock.

At Whitianga, a 60ha property suitable for horticulture and 6000m² site on a separate title on Purangi Rd, Flaxmill Bay, went on the market at $650,000 and were sold at that figure.

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Kelland on move

Kelland moving

Kelland Real Estate plans to be on the move in a few months, but the question on staff lips at the end of last week was: which design?

The small firm established by Deborah Kelland (below) in Bath St, Parnell, operates from open rented premises with large floor-to-ceiling windows opening on to a sheltered balcony.

Ms Kelland has bought an old villa in the middle of the small Gladstone Rd shopping centre, up from the Rose Gardens and across the Parnell gully, but wanted her staff’s views on which design to opt for. The choice, between Jasmax, Brent Hulena and Fearon Hay, should be decided this week.

All designs have a gallery, and the design of Geoff Fearon and Tim Hay also has a tree inside an atrium, with the gallery looking on to it. The 404m² site allows for a net 404m² of floor area.

“We hope to be in by October,” Ms Kelland said.

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Guest nights beat capacity gain

Auckland occupancy rises to 55% in August

Short-term accommodation guests nights (excluding caravan parks/camping grounds) rose 3.9% in August on capacity up 2.1%.

Statistics NZ said occupancy, again excluding the camping segment, rose from 44.7% to 45.1% and the average stay was up from 1.9 nights to 2.

Hotel/resort capacity rose 2.5% and guests nights 3%, but the occupancy rate fell 0.2 of a point to 51.2%.

Motel/apartment capacity rose 0.8 of a point and guest nights were well ahead with a 4.3% rise.

Backpacker capacity rose 4% and guest nights 7.9%. Occupancy was 0.9 of a point ahead at 37.7%.

Auckland occupancy was up 5.3% (not percentage points) to 55%, Northland occupancy rose 12.4% to 28.6%, Waikato 8.2% to 37.9%.

Canterbury occupancy fell 9.4% to 44.3% and Otago 1.7% to 61.3%.

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Auckland cbd opex down slightly

Property Council releases office & retail figures

The Property Council has completed its annual survey of operating expenses.

The median total operating cost for Auckland fell slightly to $71.42/m²/year (rates $28.34, insurance $3.08, operations $39.12, and somehow the total is slightly above the sum of the parts).

The Wellington cbd’s median fell 12.5% to $63.50/m²/year (rates $22.35, insurance $4.17, operations $35.72).

Non-cbd office in Auckland (places like Takapuna & Manukau, not the city fringe) rose marginally to $47.12/m²/year (rates $17.20, insurance $2.69, operations $24.51).

Hamilton office opex totalled $44.59 (rates $14.34, insurance $2, operations $28.25).

Christchurch cbd office opex totalled $36.55 (rates $8, insurance $3.19, operations $25.36).

The median city shopping centre opex (not shown geographically) totalled $109.92/m²/year (rates $18.48, insurance $2.87, operations $77.09), district & regional centres $74.24/m²/year (rates $12.31, insurance $2.27, operations $65.51), neighbourhood & town centres $39.07/m²/year (rates $10.68, insurance $1.95, operations $29.87).

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Strong auctionroom performance

Western sites and warehousing attract attention

Bayleys Real Estate had a strong auctionroom performance on Wednesday, with some notable residential sales and two healthy results on West Auckland commercial land.

A 2924m² block at 285 Lincoln Rd, Henderson, attracted fierce competition — down to $500 bids — before selling for $671,500 at $230/m², a high price for West Auckland reflecting the shortage of prime development land in Waitakere City.

This site has a three-bedroom house on it but is zoned commercial. The buyer, an owner-occupier, intends to build a childcare centre.

A new tilt-slab warehouse on Central Park Drive, Henderson, was sold for $821,000, a 9.7% yield on the $80,000 rent from its two tenancies.

The property at 159 Central Park Drive has Flooring Enterprises Ltd in one unit and Autopaint Marketing Ltd in the other. Both units are divided equally into 166.5m² office/showroom and 166.5m² warehouse for a total building area of 666m². Both tenants are on six-year leases, starting six months apart, one with two-year reviews and the other with three-year reviews.

At 45D Ben Lomond Crescent, Pakuranga, a 929m² warehouse was sold for $325,000, at a 13.8% yield on its $45,000 rent. The tenant, Contract Warehousing, has nine months left on its lease.

$33,300/lot for subdivision land

At Greenhithe, a 2.8982ha block at 101 Greenhithe Rd was sold for $1 million. The property has a large house on it, but more importantly has subdivision potential for more than 30 sections.

The land was held by the Durbin family for more than 25 years. But Rod Macfarlane, of Bayleys’ North Shore office, said a zone change would allow the development of smaller residential lots in an area which had been dominated by lifestyle blocks and small farms. This site is zoned residential expansion under North Shore City’s proposed district plan.

Mr Macfarlane said the North Shore was one of the country’s fastest growing areas, but was hamstrung by infrastructure issues such as limited sewage capacity, now being addressed. Once the north-to-west motorway link was put through across the top of the Waitemata Harbour, Greenhithe would come into its own, he said.

A subdivision plan which Harrison Grierson Consultants prepared for this site showed 30 sections of 500m², mostly north-facing.

A restored Victorian manor at 29 Stilwell Rd, Mt Albert, was sold for $1.25 million. Bayleys agents were unaware of any previous Mt Albert sales over $1 million.

At 83 West End Rd, Westmere, an 1103m² waterfront site with a three-bedroom bungalow on it was sold for $865,000. Westmere is growing in popularity because of its proximity to the cbd, but waterfront property there is still cheaper than in Herne Bay.

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Auckland hotel occupancy hit 76.7% in November

National occupancy strong at 67.9%

Hotel occupancy was strong nationally in November, and way above the norm in Auckland.

Other categories of short-term accommodation also showed strong rises in guest nights & occupancy rates, according to the Statistics NZ figures.

In the hotel/resort segment of the market, national capacity rose 3.1%, guest nights rose 15.6%, the occupancy rate rose 11% to 67.9% and the average stay increased 5.5% to 1.8 nights.

In the motel/apartment segment, capacity was up 2.2%, guest nights rose 10.8% and the occupancy rate was up 7.3% to 59.9%.

Hosted accommodation showed the strongest rise, on a 2.2% increase in capacity. Guest nights rose 19.7% & occupancy rate 15.2%. But it’s still a small segment of the market — twice as many establishments as in the backpacker segment but less than 20% the capacity, and always low occupancy compared to the mainstream accommodation businesses.

The hosted segment achieved 33% occupancy in November. It typically runs through 4 stronger months over the summer, and got to 44% last February, dipping to the 16-20% range through winter & early spring.

The backpacker segment continued its consistent rise, with a 5.5% rise in capacity to 526,000 stay unit nights (73% the size of the motel segment), an 11.3% rise in guest nights to 314,000 (37% the performance of the motel sector) and a 6.5% rise in occupancy rate to 53.9%.

Over the whole permanent structure sector (excluding campers), occupancy was 60.4%, 8.8% above November 2001 & comparing favourably with the generally stronger January trade.

Auckland performs way above norm

In Auckland, occupancy in the permanent structure sector hit 76.7%, a 17.8% rise over November 2001 and topping the normal strongest months of February-March, when occupancy was 74.1% & 72.6%.

Wellington also achieved high occupancy — 69.7%, which was 2.1% above November 2001 and matched November 2000. Southland enjoyed a strong occupancy rise, up 11.2% to 60.3%.

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NZ cbds rare positives in Asia/Pacific

Auckland vacancy rate 11.6%, Wellington 7.9%

Colliers Jardine says in its latest Global office real estate highlights the Auckland & Wellington office markets are among only half a dozen central business districts in Asia & the Pacific escaping the global downdraft affecting the slowly recovering US and recessionary Europe.

Auckland had an 11.6% vacancy rate and Wellington 7.9% in the 1st half, among the lowest in 19 cbds surveyed.

Auckland rents, at $430/m² gross (though most Auckland office space is leased on a net basis), climbed 1.8% in the 1st half. Wellington’s rose 1.4% to $375/m² gross. Both markets are predicted to keep on improving.

Colliers International corporate services director Alan McMahon said the absence of speculative office development & the strong economy, coupled with low interest rates, should sustain the momentum for a few years.

He believed the conservative outlook in the office market and the reasonable balance between supply & demand would keep the market steady.

Mr McMahon said there would be demand in the next 2 years for another major office building in both Auckland & Wellington.

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PanPac congress draws 260

Valuers conference

The NZ Institute of Valuers is three-quarters of the way towards its hope of getting 350 participants in the Pan Pacific Congress to be held in Auckland from 2-5 April, about half of the 260 so far enrolled coming from overseas.

The conference, at the Sheraton Hotel, will open strongly with a keynote address by ASB Bank managing director Ralph Norris, outspoken recently in his demands on government direction. Mr Norris played a significant role in boosting the bank’s position as a computerised and internet leader (before e-commerce was invented), and an important role again in the success of the business leaders’ session which ran alongside last year’s Apec conference.

He will speak on the future business environment, followed by Ove Arup’s NZ managing principal, Fulbrook, on the impact this environment will have on property.

The conference will be held under the auspices of the NZIV, although that organisation formally joined forces with the Property & Land Economy Institute at the start of this year. Organisation of the conference was well under way before the merger.

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