Northcote build snapped up

Eager purchasing of apartments at the groundbreaking Fraser Avenue development in Northcote is giving a strong picture of typical KiwiBuild buyers following the recent re-set of the government scheme.

Fraser Avenue consists of 102 apartments – 72 Kiwi Build purchases and 30 open market apartments – and developer Shane Brealey, director of NZ Living, says interest was running high even before the KiwiBuild re-set.

“We have now sold unconditionally 51 out of the 72 KiwiBuild apartments,” he says, “and 15 of the 30 open market apartments, also unconditionally.”

Fraser Avenue consists of five three-storey buildings with dwellings ranging from studio and one-bedroom apartments to family sized, three-bedroom layouts. The five blocks are solid concrete and block to roof level with double glazing, aluminium panels and traditional brick cladding for permanence – the kind of solid buildings which, in other countries, have lasted over 200 years with minimal maintenance, according to Brealey.

But it is the make-up and demographics of the buyers so far which is proving of most interest, with about 73 per cent of the KiwiBuild homes sold and 50 per cent of the open market homes.

Of the KiwiBuild buyers, 50 per cent are aged 21-30 and 35 per cent 31-40. The remainder, so far, are aged 40-55 and 55-65 and Brealey estimates each makes up 7.5 per cent of the KiwiBuild buyers.

“So 85 per cent of the KiwiBuild buyers are 21-40,” says Brealey. “They are predominantly professional singles or professional couples.”

Almost all of the 51 KiwiBuild homes sold have been bought by first home buyers, he says, while 11 of the 15 open market buyers are also first home owners. He was also surprised that a third of buyers came from south of the Harbour Bridge – a large number for a Shore-based development – while 50 per cent came from places within 5-10km of Northcote, all people who knew the area.

“It’s been interesting. I think there are some misconceptions out there and I hear them from both banks and real estate agents – that the KiwiBuild buyers and the open market buyers are in different categories. Well, I don’t think they are – it’s just a matter of whether they qualify for KiwiBuild or not.”

The price differential between the KiwiBuild homes and the open market apartments was between 10-15 per cent, something Brealey says has been helped by the developer’s ability to efficiently set and maintain their costs and profits.

“We have released Fraser Avenue for sale at $7 million less than market valuation,” he says. “That’s $62m when the valuation was $69m. Part of that was KiwiBuild price points but also a large part of it was us wanting to give the market a bit of sparkle.”

The re-set of KiwiBuild had meant some buyers previously unable to qualify had become eligible, quoting the example of a 62-year-old woman: “Under the old rules, she was ruled out because she had $500,000 in assets. When that changed, she absolutely leapt at it.

“There have been a few 65-year-olds or so involved – it’s the time of life you get older people who are single, or separated or whose partner has died. While most of the Fraser Avenue buyers are first home buyers, we are getting some second chancers who have been let back in the game by the removal of the asset testing.”

Fraser Avenue is scheduled to be completed in September next year and Brealey says the development will play a big role in “bringing up” the surrounding neighbourhood, much of which has previously been devoted to state housing.

“If you look around the area, you can see that some of the old state houses are long past their serviceable lives. There is already new construction happening there and when Fraser Avenue comes on line, I think it will change this neighbourhood dramatically.”

Brealey says there are five main reasons why the Fraser Avenue apartments are being keenly bought off the plans:

· Price

· Location – Northcote is only 8km from Auckland’sCBD and close to busy and attractive areas like Takapuna, Milford, Birkenhead; it has its own town centre with 90 stores and 25 eating places within walking distance, is home to a diverse population and has excellent investment potential.

· Quality build – the permanent materials being used are attractive to buyers, as is the low maintenance.

· The convenience of apartment living

· Ownership costs – once the body corporate is paid each quarter, he says, insurance is taken care of, the lobby, grounds and landscaping are all catered for as isrubbish collection and the like. “Give me that instead of owning a house, trouble with neighbours, driveway access, fences and leaky roofs.”

- This content was supplied by Kāinga Ora