More than $150 million worth of residential land sales were conducted during the Covid-19 lockdown period, OneRoof can reveal.
Developers and investors snapped up 28ha of residential and mixed-use development land in Auckland.
The sales included the former Caughey Preston Rest Home site, on 3.1 ha of valuable Remuera land, along with Auckland Council’s Ōrewa Service Centre, two CBD apartment sites, a greenfield site in Drury, and consented townhouse sites.
All nine sales occurred during the Level 3 and 4 coronavirus lockdown period and were brokered by Colliers International.
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Josh Coburn, site sales director for Colliers, says: “We saw a big influx in the amount of enquiry for residential development land throughout the lockdown.
“Developers are essentially betting the Covid effect will be short-lived and will therefore continue putting sites into the development pipeline.
“Driving this sentiment is the well-founded assumption that we are about to see the return en masse of residential investors.”
Colliers International site sales director Josh Coburn: “Land is seen as particularly stable right now, as are houses." Photo / Supplied
Coburn adds: “Land is seen as particularly stable right now, as are houses. By contrast, commercial investors remain cautious about commercial tenant covenants and in some cases their ability to pay rent in the current environment.”
Two categories of residential buyers are likely to dominate the market in the coming months, Coburn predicts.
First home buyers taking advantage of record low interest rates and investors seeking quality properties that are easy to maintain.
“In the previous cycle, particularly between 2010 and 2015, many investors were speculators who might only paint the walls and put in a new kitchen before on-selling the property for a capital gain," he says.
The 1.93ha freehold site in Ōrewa that was previously occupied by Auckland Council. Photo / Supplied
“The new residential investor is likely to be buying modern, low-maintenance, well master-planned investment stock. They will also be buying for rental returns, rather than specifically for capital gains.”
Coburn says when Covid-19 hit, many expected the team’s land sales to fall off a cliff but the opposite happened.
“Unlike the GFC, which was a credit-led crunch, today’s economic environment is driven by sentiment.
“Land continues to be viewed positively, with the adage of ‘flight to quality’ this time around applying to residential, with houses still selling and demand continuing to outstrip supply.
“The residential development land we sold over the lockdown period will provide well in excess of 1,500 new dwellings.
“Many of these will be terraced houses and apartments, which are typographies that are attractive to both first home buyers and the new class of residential investors.”
