As homeowners begin this month moving into the luxurious Victoria Lane apartments, in Auckland's Remuera, developers and agents are warning of a looming shortage of top-end apartments for downsizing baby boomers around the city.
The 23-unit development on the corner of Remuera Road and Victoria Avenue, a project by veteran developer Richard Kroon, was first launched to off-the-plan buyers way back in late 2020. It made headlines when the penthouse sold for a record $17 million in 2021, and by mid-2022 fifteen places had been sold.
With the help of the project architect and interior designer, buyers customised their roomy apartments with things like a dedicated wine room, reconfigured kitchen layouts and, for one, self-contained staff rooms. Kroon was too busy with the usual flurry of final settlement paperwork to talk to OneRoof about his future plans.
Now there are only a handful of new luxury projects coming to market, a gap which analysts said could take years of catch-up.
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With the exception of the 190-unit Parkview on Cornwall, on the edge of Alexandra Park race track in double-grammar-zone Epsom, most of the other prestige properties are more boutique. The agent marketing the property, Michael Boulgaris, of Boulgaris Realty, said that with ground works only just starting, around half the apartments have sold, mostly to Epsom, Greenlane and Epsom buyers who want to stay near “their” Cornwall Park. The two blocks are expected to be ready by the end of 2026.
Completing this year is the 27-unit One Saint Stephens, next to the Cathedral in Parnell, which boasted one of the fastest luxury sell downs ever and had penthouse apartments asking for up to $15.25m and there are one or two apartments left in blocks such as the Exhibit in Herne Bay, on Churton Street in Parnell, and The Bays and Sonata in Saint Heliers.
Developer Peter Jones, who is known for high-end properties, says he only starts looking for new projects once the old one is sold down. Photos / Fiona Goodall
New Zealand Sotheby's International Realty managing director for projects and developments, Gavin Lloyd, says Auckland city will soon face a drastic undersupply of new apartment projects. Photo / Fiona Goodall
But after the next tranche of newer places that have been launched are completed in late 2025 or early 2026 – the seven-unit Edition on Herne Bay’s Jervois Road, the12-apartment Pompallier on Ponsonby on Ponsonby Road, the 16-apartment Elysian on Balfour Road in Parnell, and York House, also in Parnell – agents don’t see any new projects in the pipeline.
The newest to the market, Winton Land’s 21-apartment block The Villard on the western end of Wynyard Quarter, which includes a $29m sub-penthouse, is part of a long-term revitalisation of the marina corner of the precinct and is looking at completion around early 2027.
That might mean well-off Auckland baby boomers may be facing a housing shortage of their own in a couple of years – albeit for the luxury lock-and-leave apartment in the golden inner-city suburbs.
Boulgaris said he’s already seeing investors buying into Parkview on Cornwall expecting to make money on resales when the apartments are ready to move into and prices have jumped as buyers realise there is a shortage.
One of the highest profile plots is the over 4200sqm St Marks site, on Remuera’s St Marks Road, which first-time developer John Harmon off-loaded to rich lister Kurt Gibbons in 2022 for $23.5m. But Gibbons told OneRoof that at this stage “there is nothing happening on that site in the near future”.
The luxury block of 12 apartments, shops and restaurants designed by star architects Fearon Hay at Pompallier on Ponsonby, is one of a few new developments that has a stage two on the drawing board. Photo / Supplied
Long-time luxury developers Peter and Judy Jones, whose boutique six-apartment block The Bay in St Heliers still has one final apartment to sell, were frank with OneRoof about how hard the market is, even at the top end.
The completed development, ready to move into, went on the market in July last year after over four years of work (and the Joneses took on the project after it was abandoned by another developer).
“The market is stuffed,” Peter Jones told OneRoof.
“People always have something to sell, the big family home. I’ve got two buyers who would buy that apartment, but they’ve got properties to sell and they’ve been on the market for quite some time, six months, a year.
“They’re not wanting to over-commit at the moment, people are just cautious. A lot of these people would not be needing to borrow money, I presume they’re fairly cashed up and have a lot of assets, but they’re still being cautious.”
The Joneses said they liked to look around to see what was coming up in terms of projects.
“We’re sort of generally looking around to see what comes up,” Judy Jones said, adding that they liked to completely finish one project before embarking on the next. They estimate they’ve built 100 homes, but now focus on luxury apartments for downsizing boomers in the wealthier eastern bays.
The Elysian, a 16-apartment luxury development in Parnell, is set to start its two-year build. Photo / Supplied
The experienced couple added that this year was still not as bad as after the stock market crash of 1987 (they started building in Auckland in 1985) or post-2008 GFC when no one was building or lending.
Fellow developer Kelly McEwan, of Urban Collective, the company responsible for turning the old Kings Arms pub in Newtown into the 100-unit 59 France, is marketing the first stage of the company’s next project on one of Ponsonby’s most prominent sites. After over four years of planning and negotiations with Auckland Council and its development arm Eke Panuku, the12-apartment Pompallier on Ponsonby is close to starting construction.
McEwan said six of the 12 apartments were sold or close to selling, including a $10.6m penthouse (the bigger $14m one is still for sale) with the leasing of retail and office floors going well.
Completion is slated for the end of 2025 or early 2026, but McEwan said the company was one of the few in the luxury apartment space that had their next project locked in, and would start marketing stage two of Pompallier on Ponsonby, around the Cowan Street block, later this year.
He said the past four or five months had been tough for developers.
“We call it age and stage, freeing yourself from the big house and overheads like insurance, rates.
“There are people who have been looking, but they won’t do anything because they didn’t have the confidence now, but they’re all believing next year their homes will be quite saleable – they’re looking at the growth on their property [prices] during the time we’re building,” he said, adding that today’s pricing on luxury apartments was based on “yesterday’s prices”.
“They know they’re buying a Fearon Hay building, if they were to build that on their own it could be costing them $15,000 to $25,000 a square metre to build it.
“There’s quite a big difference in confidence in the last two or three weeks. The buyers we are dealing with, they’re all north of 50 years of age so it’s not their first rodeo. They've been through the Asian crisis, GFC, even the ‘87 stock market [crash], they know that after a triple dip recession quite soon after there’s a lot of confidence and property growth follows.”
Developer Kelly McEwan, of Urban Collective, says downsizing buyers don’t have the confidence now to sell their houses, but are hanging on until next year. Photo / Supplied
Like most people OneRoof spoke to, McEwan said building apartment blocks was much harder now with “astronomical” complexities that make it hard for anyone other than well-funded companies.
And in the city centre, the likelihood of more luxury towers like the recently completed Pacifica and still-under-construction Seascape and 51 Albert was slim.
New Zealand Sotheby’s International Realty managing director for projects and developments Gavin Lloyd told OneRoof that the lack of new projects in the pipeline for the city was a real problem.
“This has raised alarm bells for many industry insiders as the city faces a potential undersupply in the near future. New project launches have declined to a 10-year low,” he said, pointing out that the 2016 market peak had over 700 off-plan apartment sales in the first quarter of that year compared to just 41 pre-sales this last quarter. The luxury segment is a small subset of that total.
He said the “drastic undersupply” of new apartments put Auckland behind other cities.
“It’s now been five years since a new residential housing project has been launched in Auckland CBD. This housing is considered essential for the growth, wellbeing, and efficiency of our cities.
“Providing housing options where existing infrastructure and employment exists is the most sensible and cost-effective solution.”
Lloyd said demand was high for projects such as York House in Parnell, in which NZ Sotheby’s is selling 33 apartments and eight penthouses, which starts construction later this year.
“We’re selling to the boomers. People can buy now and have 24 months to sell their house, they’re confident they can sell in what we anticipate will be a much stronger market,” he said.
Ben Meiring, sales manager of another luxury Parnell project, The Elysian, agreed, saying that with six of the 16 homes sold or close to inking a deal, buyers were still interested.
“The most interest is people in the $4m to $6m bracket, and up to $8m,” he said, adding that announcing the removal of the original villa from the site next month to clear the way for a mid-year building start had brought a flurry of renewed interest.
“People are taking the plunge because nothing had been launched in Parnell or Remuera or the blue-chip suburbs for some time. With a two-year build time, people are comfortable, optimistic that they’ll get more for their place.
“They’re saying ‘I need to be making a decision if I want to be in in two years’.”
Juliet Lichtenstein, residential project sales manager at Colliers, who is marketing the 65-unit Domain Collection overlooking the Domain, said that with construction underway, the last units were being marketed including two penthouses, one over $7m and the other under $10m.
She said buyers were confident they had enough “runway” to sell their big family homes by the time their new place was ready to move into because they could see there would be little else to follow.
“People know it’s buy now or there’ll be nothing else made in those desirable city-fringe locations.
“The pipeline, looking ahead beyond 2026, is constrained. There’ll be a notable shortage of high end.
“The time it takes to create a project to bring it into the market and get construction underway, that’s where the constraints are. There’ll be a big lag.”
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