Auckland apartment projects abandoned as costs increase

Newstalk ZB,
Publish Date
Wednesday, 12 December 2018, 9:13AM
Auckland apartments are currently selling at a sluggish rate. Photo / Richard Robinson

A new survey says a combination of slower price growth and high construction costs has led to a spike in abandoned developments in the Auckland property market.

Colliers International research has found 49 Auckland apartment projects didn't proceed under their original plans this year.

Spokesman Chris Dibble told Mike Hosking 19 developments were abandoned, 13 were deferred and 17 saw their sites re-marketed for sale or sold.

"What we are seeing is a certain amount of projects which are not necessarily continuing. What the purchaser needs to do is understand the quality of the project and it will come down to the experience of the developer and their skillset."

When asked the reasons behind the slowdown, Dibble said it is a classic case of market conditions, with Australia experiencing a sluggish property market as house prices fall at a record rate.

"Its the old equation of demand and supply. Our latest report showcases that we have many projects which will not continue next year. Unfortunately, because of the way the market is running we are not going to have enough supply next year."

Some of the apartments have been abandoned and others deferred, the time-frames have been pushed out because the project you are completing has to have people which are available to purchase it."

With migration decreasing as a whole across the country, Dibble believes this will ultimately be a positive for the market.


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