Capital home building on rise
31 July 2012.
Source: Fairfax NZ News
New home building is picking up in Wellington city, mainly due to a jump in apartments, with one top-end waterfront apartment project all but certain to start work by the end of the year. In June, consents were issued for 148 houses and apartments in the Wellington region, about double the number in April and May. Wellington city contributed 78 of the 83 increase in consents compared with the same month last year. Of that increase, 71 were new apartments, Statistics NZ said, but just which apartments is a mystery.
The overall June figure for Wellington city was the best month since a rush in December. Nationally, home building is picking up from a poor 2011, but the gains this year are patchy, with a 5.7 per cent seasonally adjusted lift in June only partly off setting falls in April and May. Building work is improving, but off a low base - 2011 was the worst year for the industry since records began in 1965, with about 13,500 new home consents. At the present rate, close to 16,000 homes may be consented this year around the country. Despite a sluggish economy and government belt-tightening in Wellington there is still demand for upper-end apartments, with three large projects near or on the waterfront on the books. Wellington's top-shelf 11 storey apartment block One Market Lane in Cable St is going ahead after 26 of the 40 apartments in the block were sold. Many are in the $2 million plus category.
Developer Willis Bond has also leased three floors of office space in the building to a "high quality" but unidentified tenant, with room for between 200 and 300 staff. "It has been proceeding well and sales have been pleasing," Willis Bond managing director Mark McGuinness said. The architects and consultants were now preparing working drawings for the project, which is a major investment and a clear indication that the project will go up, though that's not been officially confirmed. Willis Bond said construction would start at the end of this year or early next year.
Meanwhile, Willis Bond's Clyde Quay Wharf development on the Wellington waterfront is also moving ahead, with work under way on the wharf pilings, and 66 of 75 apartments sold. The balance of the apartments were expected to sell fast once the apartments began to be built on the wharf, towards the end of the year. "There was probably a pent-up demand for high quality apartments," McGuinness said, regardless of the government belt tightening in Wellington. That demand had been met by the two Willis Bond projects, he said.
However, rent figures suggest that further down the market there may be an oversupply of homes in Wellington. Trade Me Property figures earlier this month showed rents for homes and flats in Wellington were down 2 per cent, and the number of listings rose slightly, while demand from renters fell 4 per cent. Some agents said there was a glut in the suburbs, with some landlords cutting rents. Despite that, other Wellington apartment projects are in the wings. Stratum Group's 82-apartment Elevate development at the bottom of Taranaki St is on the site next to the Green Parrot restaurant. Elevate is seen as "mid market", with single-bedroom apartments selling for $315,000 to $320,000 and three-bedroom apartments going for up to $600,000.
Marketing is about to start for 52 apartments in a proposed four storey apartment and retail project in Ghuznee St, although that gained consent about a year ago. Work on the supermarket is expected to start early next year, with the developer, Vicinity, hoping construction can begin at the same time. The apartments will cost about $400,000. Vicinity also developed the distinctive Tattoo Apartments in Abel Smith St. Wellington City Council confirmed it had received an application for resource consent for a four storey, 40-apartment project in Riddiford St, Newtown, beside Wellington Hospital.