Oh, that’s going to stuff up housing projections

I’m laughing because good quality evidential research always shows up how piss-poor local government is.

Len Brown and his cronies at Auckland Council have sold a storm on their compact city and the rate of intensive development that is occurring. It’s always been fanciful.

Plans for 28 new Auckland apartment blocks containing 1900 units have not gone ahead as originally planned, a real estate expert says.

Zoltan Moricz, CBRE research head and senior director, said changes had been made to schemes for about 15 per cent of planned new stock.

Some of the new apartments might never be built, but plans could also be on-sold to other developers or perhaps the projects would be down-scaled, he said.

Some of the planned projects were badly located, too expensive or not what the market wanted, he said.

Moricz said people should not see the trend as indicating Auckland’s apartment market was heading for the doldrums as most new Auckland apartment schemes were proceeding as planned, bringing thousands of new units to the city.

“We don’t see a 15 per cent abandonment rate for project launches as a materially adverse outcome given the diversity of active developers, apartment product and locations. A prominent theme behind abandonment has been the wrong product, at the wrong location, at the wrong price.

“The market is discerning. Success requires a careful balance of having the right specification and type of product for a given location at a price that the market will accept while still allowing development profit.

Moricz would not name any ‘abandoned’ projects.

Read more »

Auckland Council tries charm offensive

Auckland Council had been slapped down by Bill English with a threat to release more land or face consequences.

Which include sacking Council and replacing them with commissioners.

So what do they do?

Go on the PR offensive.

I can smell a Council orchestrated PR offensive on apartments from 600 paces. It looks and smells like a dead cat and always involves their favourite developer Marky Mark.

It’s not his fault he gets quoted – he’s just the only developer the Council PR flunkies know and like.

Home buyers are turning their backs on traditional suburban villas, sparking a boom in apartment living.

Building consents for apartments have increased tenfold in five years and figures show one in five people buying apartments are switching from a house. ?? Read more »

Mike Lee slags off crap development and Brown’s fingers become more sticky

Mike Lee – long time consolidated city advocate – has hit out at the winning entry for Len Brown’s developer mate Mark Todd.

Mr Todd has chosen a design from an initial competition but Mike Lee says it’s not what should be built.

Whilst it’s somewhat contradictory of Lee, the fact is – even he is unimpressed. More ticky tacky units by the railway.

But that’s not all. Whilst Lee is bagging the development as another eyesore news to WOBH says that Mr Todd has also garnered himself criticism for obtaining consent for a development proposal on Khyber Pass that breaks a number of provisions set by the Special Housing Areas.

Locals are upset that the first consent under the SHA process should have been notified – at least to immediate neighbours due to its height yet Mr Todd was able to do what other developers can’t and sneak one passed the goalie. ?? Read more »

Finger pointing at developers nonsense

First it was the leaky buildings now it appears the fingers are being pointed at property developers for the installation of sub-standard fire systems.

The systemic failure by cost-cutting apartment developers to build fire-safe apartment blocks in New Zealand’s major city is being kept under wraps by secret legal settlements.

The Sunday Star-Times has learned of a number of secret settlements to homeowners involving professional fire engineers and the Auckland Council for sub-standard fire systems in multi-unit dwellings although the council denies its involvement.

While the fire safety problems are not restricted to Auckland or apartment buildings, the Star-Times understands settlements so far have related to Auckland apartment complexes.

The finger cannot and should not be pointed at developers. Particularly for apartment buildings.

All big apartment buildings are built on contract by construction firms who make it their job to add value to contracts through variations (charging extra for changes or design detail that is missing) and ‘value engineering’ (the art of substituting products for cheaper variants to save money and improve the margin for fixed price contracts). Banks and financiers expect fixed price contracts and constructors price lean to get contracts then manage greater margins during the process as described.? Read more »

Some real facts about apartments

The Herald has an article about the booming apartment market that really shows that journalists, real estate agents and commentators still don’t understand the industry they are reporting upon.

A property expert explains:

Apartments are not an affordable alternative to rising house prices. The reasons are obvious – if one knows what they are talking about – being:

  1. Houses cost between $1600 psqm and $2500 psqm to build on average;
  2. Apartments cost $2600 psqm to $4000 psqm to build on average;
  3. A 200 sqm house will retail for $400,000 plus land for $700-800,000 in Auckland (depending on the built spec);
  4. An 200 sqm apartment will retail for $1.8m to $2.4m. Land is such a fractional cost but inclusive;

Apartments are typically in heavy structured buildings with massive cost to provide car parks, lobbies, hallways, fire egress, lifts etc. they are very expensive to build.

Houses are by comparison very cheap to build. ?? Read more »

Affordable housing, Len Brown Style (LBIAFCDDDD)

Tiny, tacky boxes coming to a neighbourhood near you

NBR and TVNZ have reported about the tiny, tacky, apartment complex soon to be rising 15 stories about New Lynn.

A Hong Kong-style apartment tower destined for New Lynn, west Auckland, has received the go-ahead.

Auckland Council has granted resource consent for a 10-storey residential tower above the new Merchant Quarter building in New Lynn.

Construction is expected to begin this month.? Read more »