KiwiBuild concept success as buyers swamp Northcote project
KiwiBuild’s critics must start to look at the benefits for desperate first home buyers as the scheme is far from the colossal failure its political opponents have portrayed it to be, says a property expert.
Pete Evans, Director of Residential Projects at Colliers International, says unprecedented demand for recent KiwiBuild projects shows the policy is capable of delivering much-needed affordable housing.
During a time of reduced sales activity in the Auckland market, Fraser Avenue the 102-apartment project had 122 appointments and achieved 50 conditional sales in its first week on the market. The development project is now over 50 per cent sold.
Evans says KiwiBuild’s critics have not given the development industry time to adjust to KiwiBuild requirements.
“Development projects take at least 12 months to be planned, designed and consented, so time is needed to deliver quality projects.
“KiwiBuild has been an easy target for opponents looking to notch up political points. But while it’s true the policy over-promised and under-delivered, it is far from a colossal failure.
“The scheme’s harshest critics need to wake up to the reality – KiwiBuild is delivering, and will continue to deliver, affordable housing to locations supported by infrastructure and amenity.
“There’s no doubt that supply has fallen far short of what was initially promised, which the Government acknowledged with its recent policy reset.
“But the success of projects like Fraser Avenue shows the demand for KiwiBuild homes is there. That isn’t the case for the rest of the new apartment market, where sales have slowed, according to Colliers’ research.
“The KiwiBuild developer underwrite is also achieving what it set out to do, by allowing projects to go ahead at a time when there are very few privately-funded projects coming to market.
“Stubbornly high land and construction costs continue to be a barrier to development. The Fraser Avenue development is currently under construction thanks to the KiwiBuild underwrite, which allowed work to commence prior to the sales display opening.”
KiwiBuild has assisted developer/builder Shane Brealey of NZ Living to construct 42 new apartments at 340 Onehunga Mall.
Brealey’s vision behind Fraser Avenue is to create apartment living that offers value for money using high quality, durable materials.
Among the first to purchase at Fraser Avenue was Guido Turnock-Chambers, a 27-year-old who had been searching for a home, to get his foot on the property ladder, for the last couple of years.
“Despite the bad press, KiwiBuild has helped me achieve my goal of getting into my first home that I might not have had the chance otherwise.”
While buying a new build was attractive due to the HomeStart Grant and appeal of a brand-new home, Guido says location was key in choosing Fraser Avenue.
“Location was a big factor, being not too far from the CBD and other major hubs. The future development of Northcote means that it’s becoming a desirable location.”
Despite being a first home buyer, 29-year-old purchaser Jordan Schuler opted to go for one of Fraser Avenue’s open market homes.
“I wanted a new build over an existing home because it would be warm and dry, and more suited to me as it would require less maintenance or renovations to bring it up to scratch.
“The HomeStart Grant made Fraser Avenue even more affordable so I ended up going for an open market apartment not KiwiBuild.
“It’s in a great location, it’s close to the city and my work, and having access to motorways in both directions was important to me.
“I also liked the apartment style of living, but still generously sized and shared common spaces. I really like the thought of the development being occupied by like-minded people in similar situations that will bring a sense of community.”
Having purchased a share in a property with her sister previously, Emily Sullivan had been keeping an eye on the market but knew her budget was restricted and wasn’t eligible for KiwiBuild.
“Not being a first home buyer but having a limited budget really reduced the options that my partner Alex Neely and I could consider.
“Once we heard about the Fraser Avenue development it all moved very quickly! The central location compared with other affordable housing options made this project a lot more appealing.
“There are already well-established public transport systems in the area and the redevelopment of the town centre and new green spaces only made the location more appealing.
“I think KiwiBuild is a great solution for first home buyers but, more specifically, this complex because of its central location and area that will hold its value.
“Fraser Avenue meant we could access the housing market at our budget while enjoying the perks of a brand-new property.”
The project comprises 72 KiwiBuild apartments as well as 30 that are available on the open market.
Sale prices across all homes are below the registered market valuation, with prices ranging from $370,000 to $845,000 for first home buyers and open market prices up to $110,000 lower than their valuation.
Evans says Fraser Avenue has captured the attention of the market due to its location and price as well as the quality of the offering and reputation of the developer/builder.
“Fraser Avenue represents an exciting opportunity for people to purchase a brand-new, architecturally designed home within 9km of the CBD and with its own local town centre that offers amenity within easy walking distance.
“Northcote is a fantastic place to live with good transport links, proximity to the popular surrounding areas of Smales Farm, Takapuna and Devonport, as well as its own town centre which is a melting pot of cultures and character.
“The project is bringing much needed new supply to the Auckland market and opportunities of this quality in the city fringe for first home buyers will be very rare.”
Evans says Fraser Avenue represents a rare opportunity not just for first home buyers but for a wide variety of people.
“With interest rates at an all-time low and net migration continuing at almost record-high levels, the Government is focused on increasing affordable housing supply through KiwiBuild.
“The announcements by the Government of the KiwiBuild reset are addressing the need to make housing more accessible to first home buyers by reducing the deposit requirement to five per cent for the First Home Loan and removal of asset testing for ‘second chancers.’
“The time requirement to live in studio or one-bedroom apartments has also been reduced to one year, making this an attractive option for first home buyers to get their foot on the property ladder before moving on to larger properties.”
Designed by Brewer
Davidson Architects to meet the needs of a diverse
community, Fraser Avenue is made up of five buildings with a
mix of studio, one-, two- and three-bedroom apartments
across three storeys around a village