Where are all the completed sections to buy in Auckland?

Where are all the completed sections to buy in Auckland?

There virtually aren’t any.

That’s a significant issue because the supply of land as completed sections is supposed to be the method for controlling escalation in property values.

Most of Auckland’s subdivisions are sold out on current stages and future stages are being drip fed as developers deal with onerous financing criteria and work within the confines of a summer earthworks season. It isn’t abnormal, and very few development companies have the financial capacity to dump hundreds of sections on to the market in one go. It’s always a ‘steady as she goes’ with finance facilities revolving from stage to stage to avoid interest costs escalating out of control.

Around Auckland there are a number of subdivision greenfield areas:

  • Hobsonville;
  • Long Bay;
  • Beachlands;
  • Karaka;
  • Pukekohe;
  • Millwater (Silverdale);
  • Flatbush;
  • Whenuapai and Riverhead.

In most of these places the zoned opportunity accounts for a reasonable number of sections but that ‘zoned opportunity’ is not all built.

That said, in some locations, like Long Bay and Beachlands, the subdivision work planned for 15 years is all underway or sold out now. But that’s a rare thing and the coastal views afforded by each location attribute to the speed at which they sell.

?Take a quick drive around Auckland’s subdivisions and you’ll see bare lots. So how can I make the claim that there aren’t any sections?

?The answer is that subdivision developers sell their sections mostly to builders – from small one man band operations to the big group housing companies. Hardly any are sold to the general public. Builders are smart enough to snaffle enough sites to guarantee work ahead for two years. If they don’t then they run the risk that they might run out of work. And it’s a real risk because the pipeline looks pretty empty in the next five years.

Long Bay sold out a long time ago so the opportunities there are now gone. Only housing stock remains to be built. Beachlands has only future stages remaining and prices have skyrocketed on the back of huge demand. Hobsonville is only available to group housing builders for intensification. Flatbush is dominated by Chinese group builders; Whenuapai by Fletchers. The point is, the big companies and smaller building businesses alike have all got in and bought to ensure work because they all know things are looking pretty?thin a few years ahead. There’s certainly not a lot for the general public to buy.

Of course, all the sold sites turn into sections but it’s the fact that supply right now is looking to be low. Problems are looming. Additional capacity in the form of apartments will only satisfy part of the market.

I point all this out because it’s obvious. Taking a drive around Auckland, it’s easy to work out that greenfields development is popular but that has resulted in lots of sales – more than predicted – and now available stock is running very low and there don’t appear to be a lot of earthworks going on, certainly not in a volume to match the number of Special Housing Areas that were tranched.

Why this is important is because politicians all over the place are blow-harding that the issues are being resolved yet the evidence is simply not there. Projects can’t get off the ground in Special Housing Areas because the Council won’t install the necessary pipes for 5, 10 or 15 years. Developers with approved developments can’t produce miracles and build their projects all at once. So the pipeline is in jeopardy.

Quite where the supply is going to come from is a mystery. That’s the point. Lack of completed sections now, or underway to be completed in the next 12 months, and a lack of subdivisions delivering meaningful volume in the ?next five years, combined with population growth at record highs, is only going to mean one thing – escalating house values. And it also means the politicians have failed to keep it all in control.