Hamish Firth: Mt Hobson Group urban planning expert on the decline in Auckland apartment sales

The Auckland apartment market is so dire that a developer is renting instead of selling all the units in one new block.

Ockham Residential CEO William Deihl said all the new 10-level 77-unit Whetū in Pt Chevalier would be rented, not sold - sparking discussion about whether apartments have value in the current market.

Mt Hobson Group urban planning expert Hamish Firth says apartments can still suit Kiwi buyers - at a certain age and stage.

"Perhaps older people or downsizers, perhaps students coming through or perhaps young families with lesser amounts of kids. So I think that it's really good that we've got that variety of housing forms."

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Sunday Session podcast with Francesca Rudgin
from News Talks edb Right.

Speaker 2 (00:13):
So a story caught my attention on Friday. It was
reported the New Zealand Herald that apartment sales are so
dire in Auckland. One developer is having to rent, not sell,
seventy seven units in a brand new apartment block. Yet
despite low sales and lack of demand, the government is
changing laws to allow for more apartments. So why are
we planning to build housing that no one is currently buying?

(00:33):
Is this just we actually?

Speaker 3 (00:35):
You know?

Speaker 2 (00:35):
Do we have a long term plan in place? Every
once would be very exciting. Mount Hobson Group urban planning
expert Hamish Firth is with me now. Good morning Hamish,
Good morning Francesca. So we're told that building upwards and
intensification is a future, So why are apartments not selling?

Speaker 3 (00:52):
I think we've got to look at the market in general.
Perhaps during the COVID period prices may have got out
of control. I think since then Auckland is back twenty
four to twenty five percent in value, in Wellington thirty
and I think the country seven. So I think what
we've had to do is take a great, big, deep
breath and pause and reflect. The development you're talking about

(01:16):
is by a developer called Ockham. They are experienced and reputable.
They build buildings in places people want to live, and
they create apartments and spaces that people want to live in.
I suspect what's happened is those you know, that project
now finished is probably four or five years in the
making from concept to the reality, and I think what's

(01:36):
happened over that time is the prices they needed to
get have fallen somewhat, so there is a disparity between
what they are prepared to sell them for and what
the market will pay for them.

Speaker 2 (01:47):
Oh, I gotcha. So there's two things at play here.
A first home bar might be going, oh, house prices
have dropped, I can afford at home on that little
section that I want. And then you've also got the
develops going, We're not quite going to get the money
that we want for it here. So a couple of
things potentially on the happening here.

Speaker 3 (02:03):
Yeah. And the other thing is I think we should
be very pleased at the buildings and then occupy and
can be occupied. Because you'll look downtown Custom Street, there's
a forty story building that has been more than just
over half finished for a year and set almost abandoned.
We've got other projects around that have have sort of
not also been finished, and I'm just glad that this

(02:24):
project's finished. Whether you're a renter or an owner, there's
somewhere that someone can put a roof over their head
and call home for a period of time. Yeah.

Speaker 2 (02:33):
Absolutely, just is it just not the key we way?
Are we a bit slow to adapt to living in apartments?

Speaker 3 (02:42):
I suppose we've always had the benefit of large open
spaces where we've rolled suburbs out over time. You know,
back in the nineteen fifties, Glenn Dowie was a farm.
It's now suburbia. So you know, you've got a lot
of these places which we've sort of grown into the
north shore of Auckland as a classic example, as we

(03:03):
rolled through all of the bays. But I think what
you'll find scattered amongst all of it are a series
of apartment buildings, usually built on ridges or in places
where people can take advantage of the view. And they
also in our CBD, we have a number of apartment
buildings and they suit people at a certain age and stage,

(03:23):
so perhaps older people or downsizes, perhaps students coming through,
or perhaps maybe young families with lesser amounts of kids.
So I think that it's really good that we've got
that variety of housing forms standalone houses, terraces, apartments. So yeah,
there's a place and a need for that apartment style
of living.

Speaker 2 (03:43):
So right now it's a reflection of the market. But
actually this is what we need to be doing, isn't
it that you know, we're talking about it potentially, you know,
needing a couple million more homes in Auckland by twenty
fifty and the intensification is the way to go.

Speaker 3 (03:59):
Well, we've built a five billion plus CRL, you know,
central rail Loop, and I think it's really important that
we intensify around those rail stations. I remember coming in
from London to garden Or on the train and I
stayed at the aptly named Terminus Hotel eight nine ten
story building right outside the train station. A logical place

(04:22):
to put high rise developments. So I think that the
council perhaps a bit late to the game because these
plans should have been done when the CRL started. But
they've got thoughts that we're going to provide capacity. Let's
not supply. That's an enablement of development potential around train stations,
and then it's also freeing up capacity in the rest

(04:44):
of Auckland for more housing, perhaps in more of the
traditional form.

Speaker 2 (04:49):
Okay, look, if nothing else, it's great that there's more
rentals available. I suppose if you're building to rent, that's
a pretty busy part of the market at the moment.
So at least these properties are lessening the demand for
rentals in Auckland.

Speaker 3 (05:05):
I'm a great believer we need to commodify household. We
need to bring it back to a level where it's
affordable for people to get into the market at a
first home level and then the second home level or
the next step up. So the more we can take
away density or land supply, whether that's up or out
out of the equation, the more we can suppress that

(05:27):
sort of supply demand curve where prices run away because
there's not enough land to develop on. So look, it'll
be interesting because we've got infrastructure problems and the rest
of it. But if we've got the right zoning in place,
then we've enabled development to happen. Not now, but we're
planning well for the future.

Speaker 2 (05:45):
Oh well, that's good to hear. I'm glad. I'm glad
we are because we always need to be a little
bit behind the april, don't we. Amish Hey, thank you
so much for your time. That was Mount Hobson Group
urban planning expert Hamish Firth.

Speaker 1 (05:55):
There for more from the Sunday session with Francesca Rudgin.
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