The sale of a pair of properties in central Auckland to a developer for more than $6 million is a signal to homeowners that big money is out there if they are in the right zone.
But it’s also a warning to buyers to keep an eye on what’s going on in the neighbourhoods they hope to land a home.
The properties at 98 and 100 Walker Road, on the edge of Point Chevalier’s western waterfront, were marketed by Harcourts agent Aman Guila, who specialises in finding sites for developers.
Gulia had worked with the owners of 98 Walker Road, which boasts a whopping 1608sqm site, and their neighbours at the 784sqm 100 Walker Road to combine both sites to make them more attractive. Their combined council valuations were $5.35 million, and they sold within 14 days.
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Gulia estimates that both properties would not have got the price they did if they were sold separately.
Neighbouring properties 14 Konini Road and 16 Ewenson Avenue in Greenlane sold to a developer for $3.75 million. Photo/ Supplied
He says that the buyer plans to build 15 townhouses on the combined site, adding that developers in general are building high-quality homes because they know “they can get a good end price”.
“I have 300 developers looking for sites, mainly west of the city – Point Chev, Avondale, Mount Albert, but also Onehunga. I’m getting offers within 24 or 48 hours of offering a property to my database and that’s what’s driving the prices,” he says.
Gulia says that the market has gone crazy in the last five or six weeks.
“Six weeks ago I was getting $2500 per sqm, now it’s between $3100 and $3300 per sqm.”
Developers are not shopping at auctions, he says, because they want to give themselves plenty of time to do due diligence and sort out consents on a property, and generally look for at least a nine-month settlement period.
“They don’t have holding costs, so they can pay a little more.”
The changing landscape can make buying more challenging for those wanting to live in a home rather than bowl and develop. How do you know if you’re buying a single house in a street or neighbourhood that’s earmarked for higher density housing?
Bayleys One Three Hill manager Glenn Baker, who is selling both development land and finished town houses and apartments, says that buyers should check out what a property is zoned for under the Auckland Unitary Plan.
They can also buy title information to check if a neighbouring property is owned by a company – likely a developer as opposed to an individual owner occupier.
Baker saysbuyers shouldn’t be afraid of developments in the suburbs they hope to live in.
“A lot of the time, the houses getting taken off are not good houses. They’re run down and terrible, and anyone would say ‘bring it on’ for something better going up. The developments going in are quite stylish. We’ve got some at 93 Alfred Street [Onehunga] and they're stunning. It’s added to the area big time.
“A good agent will know who the developer is and what else they have done. These days the architecture is of good style – gone are the days of builders doing quick plans at their kitchen bench.”
Colliers national director Pete Evans, who specialises in residential property development and project marketing, says that nowadays buyers and agents know their zoning and know what the neighbours can do with their property.
He says that while in the early days of the Auckland Unitary Plan becoming operative, some speculators bought up land thinking they’d make a killing in areas which had been zoned for more townhouses or apartments, that didn’t happen.
He also points out that while some parts closer to town centres might have zoning that permits buildings up to five or eight storeys high, in reality developers are plumping for just three storey builds.
“A three-story next to a two storey, it’s not a major problem - it’s only one storey. Where it’s a five to eight story on a big block that interferes with view shafts or shading, that might be an issue. But these things transition over a 10 to 20-year period, it does take years to transition,” he says.
“[Five storey apartments] need basements, they need lifts - it’s just not feasible. So developers will maybe do just three storey walk-ups with car-parking to the side.
“The commercial reality at this time is that some of these neighbourhoods won’t ever be built out, they won’t reach what’s known as the highest and best use.”
