RWC released a special New Zealand edition of the Between the Lines webinar this month where Ray White head of research Vanessa Rader was joined by RWC Auckland land sales director Stefan Powney to discuss the market for development sites in Auckland.
Mr Powney said he had seen activity in all parts of the market.
“When you look at the parts of the market we’re involved in it would start with 800sqm lots for smaller developers right through to large future urban blocks,” he said.
“It’s a busy market, it’s been an interesting time out there, but we are starting to see some more improvement in the activity in the market.
“We’ve not seen a crazy increase in pricing or anything, but we are seeing a lot of developers come back into the market.”
He said there was definitely some confidence returning to the market.
“When we look at the larger blocks we have some pretty consistent clients in that sense, but when you look at some of the smaller blocks we are seeing some first time developers entering the market,” Mr Powney said.
“When we had the change in market in 2021/22, there was a bit of hesitancy for people around beginning a project as there was so much uncertainty around what was going to happen moving forward and where prices were going.
“Now there is a bit more of a consensus that confidence is coming back and people are a little bit more likely to get those pre-sales.”
Mr Powney said in New Zealand the standard residential zone we had mixed housing suburban, mixed housing urban, and terrace house and apartment building zones.
“The urban one is the most common which our developers like to use, and for an 800sqm block somewhere between seven to eight units is the standard number,” he said.
“We’re hearing good things about construction prices at the moment, as the market starts to change we’re seeing slightly more competition with builders, so we are finding those prices are coming back a little bit, not drastically, but it makes those equations stack a little bit better.”
He said each client had a different preference and a different target for what they were trying to achieve with their projects.
“The standard stuff is they want a flat site, no water risk on site, services accessible,” Mr Powney said.
“One of our clients loves the north shore, he pre-sells them super easy, he’s found a recipe that works. But others will only build in premium areas like Remuera or St Heliers.”
Mr Powney said a lot of the larger sites he and his team had been working on recently had been land subdivisions.
“They will cut it up into 500-1000 lots,” he said.
“The target at the moment is to make it affordable to a degree, so there’s been a focus on getting say a 250sqm site which is about the smallest you’ll get for a single-level standalone.
“They want to get the right level of property into these developments so they can offer them at reasonable prices.”
For residential developments, Mr Powney said a bit of variety was the best option.
“Everyone has a different preference or different budget. So when you’re doing a large project you need to separate the product that you have,” he said.
“You need to have some townhouses, some smaller standalone and some larger standalones as well.”
Moving forward, Mr Powney said he felt pretty optimistic about the market.
“For developers the value that can be achieved is tied to what buyers can afford to pay based on interest rates and that kind of stuff,” he said.
“We’re seeing the improvements and we’re seeing the large groups start to commit again in the market, which is always a good sign.”
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Media contacts:
Vanessa Rader
Head of Research
Ray White Group
0432 652 115
vrader@raywhite.com
Cassandra Glover
Media Advisor
Ray White Group
0447 000 472
cglover@raywhite.com