Not good for Len’s plans of a compact city

apartmentPolicy Parrot says:

The latest NZ Herald headline on building consents says it all. Building Consents slip on dwindling apartment market.

One could make a good cheap hack at Auckland Council. Dwindling apartment market. Yes. Because nobody wants to buy apartments? Perhaps.

Rather than be so black and white one needs to ask why? What is it about apartments that makes for such miserably slow sales at low volumes.

Some would say cost and it is true that comparatively a two bedroom apartment of complying size will cost as much as a new house on the outskirts. In itself that changes the way buyers think.

Others site preferences for houses and land that has long biased the market towards houses.

Whatever the reasons it does appear absurd that nobody actually knows, least of all Auckland Council. Where is the study that would inform Council as to the success of the compact city based on more intensive forms of development like apartments?

The reality is that there is a distinct lack of credibility to plans to compact the city with very particular housing typologies that have a a history of low sales volume and even today ‘dwindle’.

The issue is that there has to be a reason. So what is that reason? 

This Parrot suggests that Council should have prepared an investigation into the market to succinctly understand how it works and why. Doesn’t the skill basis of good planning combine a succinct understanding of the market place with planning technical expertise to ensure the market can function and deliver whilst also ensuring the outcomes are good?

This Parrot would like to imply that Auckland Council planners don’t really understand the marketplace at all, and plan our city in silo of their Ivory Tower using theory, dreams and a dogged determination to force change.

I’d be interested to see how the planners can link their work to how the market place works and demonstrate expertise and understanding that would give all the confidence that the Unitary Plan can and will be delivered, that it makes sense to a market place and will be result in a substantial change in the market.

Building consent values tell an interesting story. When a particular housing typology features as a low number they tell us that an issue exists in that part of the market.

This Parrot suggests that there is generally a distinct lack of understanding from Auckland Council about apartments and it should concern everyone.

Not that we will ever be provided an explanation. It does appear that Auckland Council is hell bent on forcing change regardless of the evidence that the market is resisting that.

Apartments always have their place but they are at very low volumes and always have been.

It’s a long way to go to make a market swing to producing 7,000 to 12,000 apartment dwellings per year when it appears to be dwindling in the hundreds.

This Parrot asks why nobody knows why that is.


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  • Clever Harry

    Taking a wild Stab in the dark I’d say kiwis are savvy property investors and can spot value.
    Value is perceived as size, land, private amenity. If price differentials are marginal then kiwis will choose the ‘more is more’ outcome.
    Plus in a city where we are used to travelling extremes for work or sports or play its obvious we will insider choices on the outskirts and compare them to what we get in town.

  • sheppy

    Or perhaps people just don’t like being confined into a small space whilst listening to several neighbours TV’s / toilets flushing / general background noise

    • philbest

      As I have noted elsewhere, in affordable unconstrained-growth cities, apartments are mush more affordable than here, just as their suburban McMansions are. But in the face of this very genuine “choice”, the choice is overwhelmingly for suburban McMansions.

      How the planners think they are going to change this by forcing up the prices of both options, is anybody’s guess. Of course they are so economically ignorant they do not see that this is actually what they end up doing, no matter how many times they are beaten over the head with the real life evidence. Their garbage-in-garbage-out computer models say something else, therefore reality must be wrong.

  • DaveFeld

    Surely the best outcome is a market driven outcome where the market decides what it wants? If everyone is happy with what they have then utopia has been reached?
    Which then says that if Councils keep trying to decide as get it wrong then they are the wrong people to enable land resources.
    Sounds like a good time to take that function off them for the better good.

  • MarcWills

    The obvious answer is the cost – not just the purchase price, but look at the Body Corporate fee extortion as well – usually many many times the LB rates for a comparative sized house in the suburbs. When you are paying a mortgage for the apartment, who can pay BC fees of $10,000 – $15,000 pa as well?

  • Dumrse

    Lets not forget that leaky homes also stretched to leaky apartments and any right minded Kiwi would probably try and steer clear of them. Maybe the dodgy developers have also seen some thing akin to such a trend.

  • philbest

    In housing markets distorted by anti-growth regulations, all sorts of perverse consequences happen. Ironically, apartments end up many times more expensive as well as suburban McMansions. Apartments in Houston are just as much cheaper than here, as their McMansions are. The difference is taken out, as always, in windfall gains, by the owner of the site.

  • fastcompany

    the studies come after the plan, give it time

  • Ken Mathis

    what the market wants is clearly overpriced moldy and inhumanly cold homes built before the second world war

    if we are using market indicators that is where the money is, so clearly the policy should be building more of them so everyone can prosper as long as they bought into property before 1990