Sales of off-the-plan apartments and townhouses have rocketed on the back of first home buyer frustrations.
In the space of three weeks in January, contracts were signed for 30 off-the-plan townhouses in a new development in Auckland's Mt Wellington. At the end of last year, off-the-plan homes in other developments in the city sold out within 28 and 24 hours.
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Christie Wrightson, general manager of sales and operations of Wilshire Group, told OneRoof that off-the-plan sales in its Richmond development took off in January.
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“This is the fastest sales since we started in 2016. We wouldn’t see that hot in January. It usually doesn’t pick up until after Waitangi Day," Wrightson said.
“The market is hot. People like that they can buy [something with a fixed price] and not have the uncertainties of auctions, paying for building inspection after building inspection and missing out."
Prices for the 111 townhouses planned for stage four of the development range from $725,000 for a two-bedroom townhouse to $995,000 for a four-bedroom townhouse.
“Stage four houses will be ready for the end of 2022, so once buyers have put down a 10% deposit, they'll have time to save more until settlement date.”
Bayleys agent Julie Quinton, who is marketing stage four, said the initial attraction of the terrace houses was price.
“People can get into the market and know that they are fixed in at that price. When the housing market roared ahead, the apartment market didn’t follow straight away, but now there’s confidence and the flow-on has happened.”
The Richmond development in Mount Wellington sold 30 townhouses in just three weeks at the start of January. Photo / supplied
Wrightson said that that the majority of contracts signed were by first home buyers, many of whom work in the area, but added that there was a growing group of buyers looking to downsize from larger family homes. She was also surprised at the uptake of larger four-bedroom homes alongside the popular two and three-bedroom offerings.
Richmond, which has been open since 2017, will eventually have 600 residences on the 10-hectare site when the final two stages go to market.
“If there were more sites in Auckland, we’d build more. We sold out 54 terraces in Avondale right next door to the Jockey Club and are now working through a master plan for seven hectares in Westgate.”
Ben Macky, owner of real estate agency Wallace Stratton, said the off-the-plan market was booming. Last year his company sold more than 400 homes, over $500 million worth, a 250% jump on off-the-plan sales the year before.
Off-the-plan townhouses at 11 Mareth Street, in Auckland's Panmure, were snapped up within 28 hours. Photo / Supplied
Just before Christmas, a seven-terrace development at 11 Mareth Street, Panmure, sold out in just 28 hours. The properties were an affordable $685,000, with an expected weekly rental return of $580 to $600.
Another development in Beach Road Te Atatu sold all seven terrace houses in 24 hours in October. “It’s the first we’ve done in Panmure,” said Macky, whose biggest volume is in the new suburbs on the northern and southern outskirts of the city.
“We could have sold them over and over again. And what’s in the pipeline?
“All our clients are asking us to search for development land all over Auckland – anything from 900 sqm to 4000 sqm of flat land with good driveways.”
A new development of terraced homes in Auckland's Stonefields is proving popular. Photo / Supplied
Macky said that biggest demand was for terrace houses in good locations, near amenities and at affordable prices as these appealed to both owner occupiers and potential tenants for landlord investors.
“These are selling fast, so there’s no risk to developers. In the past, you’d start to build with 60% to 70% sold; now they’re 100% sold. If the developers have got equity, then banks are happy to lend.”
In the biggest development on the company’s books, in south east Auckland’s Ormiston Rise, 50 homes were under offer in the first two weeks on the market. Dozens more from Albany, Millbrook and Kumeu to the south are all sold and under construction, Macky says.
In the booming east Auckland suburb of Stonefields, the new development of College and Mason, which will eventually have 93 terraced homes in a master-planned community, has seen unprecedented demand.
Suzie Wigglesworth, Bayleys national director projects, whose team is marketing the development for Nigel McKenna’s Templeton Group, said that stage one releases sold out last year, and stage two had nearly sold out.
“It’s a record time so stage three will be released next week. There is already a waiting list of qualified buyers ready to transact and ensure they don’t miss out.
“The success of this development has been a quality product at a realistic price point in a fantastic area. We have worked to refine the offering to ensure it meets the buyers' demands”
Price points that range from $970,000 for a two-bedroom home to $1.62 million for five bedrooms, appealed to young families and downsizers, she said, adding the three- and four-bedroom homes were the most popular.
- This content was created in partnership with Kāinga Ora
