Close to five years after it came into effect, Auckland Council’s Unitary Plan - which allows density around town centres and transport hubs - is finally delivering new housing the city needs.
But Matt Baird, Barfoot & Thompson’s head of projects, warns that not all new townhouses, terraces and apartments are created equal. Good projects need to give homeowners and renters quality housing at prices that make sense compared to the traditional Kiwi box on a big plot of land.
“It still stands today that if pricing is similar, buyers would buy a house over a terrace or an apartment,” Baird says.
“In suburbs where houses are $1 million-plus, a terrace can’t be priced at $950,000.
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“But now that developers are paying big money for old homes on sections to put on multiple townhouses, those townhouse prices now compare favourably to standalone home prices.
“That means we’ll see more density in places like West Auckland, South Auckland, Takanini, Manukau, Flat Bush and Mount Wellington.”
He points to McLennan, a 550-home development in South Auckland’s Takanini, which is nearing completion after six years. The community-oriented neighbourhood is built near public parks and transport, with a range of affordable homes, shared public areas around pocket parks and a philosophy of sustainability and neighbourhood interaction.
“The last homes are finishing next year and they have a real standout design so there’s differentiation and quality,” Baird says.
“Prices have gone up for first home buyers in six years, from $500,000 at the start to $800,000 now. In one of our last releases in July, 18 homes sold out on the first weekend, at $750,000 to $790,000 for three bedrooms with courtyards and quality finishes.
“We could sell that development three times over.”
245 Kepa, a terrace house development in Auckland’s Mission Bay, is 50% sold. Photo / Supplied
Baird says that Barfoot & Thompson’s projects division, established seven years ago to sell new neighbourhoods, is picky about the developments it takes on.
“It’s all about quality control. Building to the building code is an absolute minimum, but we’re working with all Homestar 6 and 7 [Green Building Council ratings]. That should become the norm.
“We’re really careful that the product and the developer we’re representing will be up to standard. We want to be associated with good quality, and no risk.
“We don’t want to sell the Mercedes and a Skoda turns up.”
In the past seven years, Barfoot & Thompson has marketed thousands of homes in 30 to 40 projects. The company currently has nine projects on the market, ranging from 61 town houses at Rosier Park in, Glen Eden with prices starting from $655,000 for a one-bedroom to one of the city’s biggest upscale projects, 30 Madden in fashionable Wynyard Quarter.
The 150 apartments sold out before completion in August, for prices between $650,000 and millions of dollars for the penthouses.
Baird says the apartment buyer has come a long way, – literally and figuratively - from the city shoe-box towers of 20 years ago.
In waterside Hobsonville Point, 54 of the 82 luxury apartments at Catalina Bay have sold unconditionally since the launch of marketing in late February, with just 26 left to sell.
Barfoot & Thompson is selling a new town house development at Rosier Park, in Auckland's Glen Eden. Photo / Supplied
“The demand has been phenomenal and we sold a couple of penthouses just before lockdown. Penthouse apartments like these sell for over $25,000 per sqm, in the city sometimes $30,000 per sqm. It’s award-winning architecture, award-winning developers.”
And Auckland's lockdown has not slowed things down, Baird adds. “Enquiries during lockdown were at record numbers and level 3 demand has been just as strong. We sold a lot through lockdown for properties between $880,000 and $2m.”
As in Australia, USA and Europe, Kiwi buyers are getting more discerning, Baird says.
While developers are understandably wary, post-Covid, of adding mixed-use shops and restaurants to their mix they are meeting buyer demand for things like common green areas, with barbecues, and areas where neighbours can bump into each other. Some add amenities like gyms, pools or shared meeting facilities for the flexible and evolving work-from-home crowd.
“Being close to transport and shops has always been a key driver for a developer, as well as being near employment. The new generation of terrace or town houses now has added amenity in the development itself.
“The demand is there for the right product at the right price point.”
Baird’s team also vet developer’s ability to go the distance as building and compliance costs escalate, and post-Covid supply issues delay completion.
Barfoot & Thompson Dannemora branch manager Jon Simpson, who marketed the 12 terrace homes and 48 apartments of Ormiston Central in south east Auckland, says that meeting the pricing sweet spot – under $1m for a three-bedroom terrace homes and under $700,000 for a two-bedroom apartment – meets the needs of families who prefer homes and starter buyers and investors.
“Choosing the right developer should never be underestimated. This gives buyers immense confidence, knowing that they are dealing with a reputable developer,” he says.
Sales person Ying Li Howe, who marketed Rosier Park, has found that buyers are far more accepting of terrace homes than they were a few years ago.
“They’ve shifted their mindset, realising this is a great way to get on the property ladder, using the banks’ incentives and more favourable lending criteria," she says.
“We are also seeing more and more investors leaning towards buying new builds.”
Baird adds: “If we wouldn’t buy it ourselves, then we wouldn’t sell it. In fact, a lot of our salespeople have bought in our own projects.”
