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Photo of The Day: Signs of a Better Auckland on its Way

Cranes. Lots of cranes on the Auckland skyline at the moment. Many of them are building apartment projects, especially in the shot below.

THE DYLAN_1248

I particularly like this view because it shows that an area that long been dominated by one type of dwelling; detached Victorian houses, is now getting this resource complemented by a good volume of a different kind of dwelling. This is especially important as these old buildings have recently become extremely expensive through both further investment [massive upgrades] and good old fashioned scarcity plus neighbourhood desirability. So more people and different kinds of households are now entering this lovely neighbourhood with its existing infrastructure and great proximity to the city.

While the prices of the apartments reflect these qualities of the location [naturally] and therefore are not as cheap as those out at the end of the motorways, they are still easily under half the price of the surrounding done-up detached houses, and even many that are entirely uninhabitable. And therefore will help to add to the range of price points in the local market as well as the total number of dwellings.

Additionally, and something that’s dear to my heart as an existing resident of the area, all these additional locals mean new and better local amenity; more cafes, restaurants, and employment opportunities as more businesses move in to serve them [all three of my children work locally]; essentially more choice and vibrancy, because there’s simply more people on the streets. And it means that our neighbourhood will earn the right to better social services too, like more frequent bus services, street and park upgrades, and more funding for cultural events. In particular the new intensity along Great North Road is making a strong case for this route to both to be upgraded to a real boulevard, and to one day perhaps providing sufficient demand for the transit route west here to be upgraded to Light Rail.

It is especially pleasing too that these new apartment buildings are clearly better designed and built than those of the last boom in the mid-2000s. And what are they displacing? Car yards. Low land value, slow turnover carparks; what could be better?

This is picture that makes me a very happy urbanist and an even more happy local.

56 comments to Photo of The Day: Signs of a Better Auckland on its Way

  • helgaarlington

    Agreed – though hoping that the quality and placement of all of these is appropriate. There are plenty of great places to slot in apartments and much better they fit in well and don’t destroy what is lovely about the area. An extra dimension is that they permit ageing in place – an apartment near to your previous villa, as you age and can no longer manage or need the house and garden.

    • conan gorbey

      That is a good point. My neighbour’s oldest child is not far from leaving home, they have a place up the coast they spend increasing amounts of time at, but they would never want to sever their ties with the area. So instead of holding onto a house that is too big for them they can buy an apartment and free up the house for the next family to use.

  • Sailor Boy

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11619398

    And hopefully another one soon further along the ridgeline replacing big box with mixed use!

  • Early Commuter

    Those of us old enough can remember the skyline of the CBD around the middle of 1987…

    • Mate, I can remember when 246 was the tallest building on Queen St!

      • Robert

        And it was illegal to live in the central city because it was zoned office

        • mfwic

          It was never illegal to live in the city centre. That is bullshit that gets repeated over and over so people think it was fact. We lived in the CBD in 1985 in a building built in the early 1900’s. There were buildings in Greys Ave, Symonds Street Parliament Street. In the 1980’s there were even incentives to develop but few took them up because offices were just so much more profitable. Then after the crash in 1987 people started converting old offices to apartments and redesigning unbuilt projects to find some sort of return. The big boom in apartments was largely due to new office towers not being profitable in the CBD anymore.

          • Robert

            If you read my comment correctly it was illegal to live in the city for most of us who tried to live in what were commercial buildings. Obviously I wasnt talking about the very few apartment buildings in the central city at that time. In the late 70s and early 80s I enquired with planners about converting an old warehouse in high street but was told it would not be approved because it was a residential use in a commercial zone. Council couldnt stop people using the existing residential accommodation but it was illegal at that time to create any more

      • I’m a bit younger I think, but it’s funny to remember now that the ANZ Centre on Albert Street used to be the tallest building in Auckland (in Coopers & Lybrand days, and before that as a monument to Sir Bob’s ego).

        It doesn’t seem that long ago that it all looked quite different looking from the suburbs to the city – but of course it is long ago in modern urban development terms; twenty years is nothing to trifle with.

  • James B

    I still think Auckland apartments are too expensive. I was discussing this with a friend of mine. We’re both IT professionals, both currently living with parents, both on a good salary. Yet even together we’d struggle to afford an apartment that isn’t at the shoe box end of the scale. Combine body corporate, mortgage, rates, and other expenses and we could easily be spending nearly half our take home income on a place to live. I firmly believe the housing market is a ponzi scheme.

    • Sailor Boy

      Too right, all Ponzi schemes pop eventually though.

    • fab

      Agree 100%. It seems everything is ‘high spec’ and with correspondingly high prices.
      New apartments going up in Birkenhead are on the market starting at $550K for one-bedroom – $900K for a two bedroom. Starting prices.
      Fine for older couples downsizing – but not affordable for young people trying to get their first place.

      • Angus Robertson

        We have an excitingly high land cost in this town, to make a profit on an apartment build requires sale prices higher than in other places.

      • Bryan

        Our expectations have grown hugely in two generations. When my parents built their first house in the 1960s, it was affordable because that’s all they got – a 3 bedroom house, one bathroom, no landscaping, minimal furniture, virtually no appliances. Same went for their car – it had the luxury of a heater, but no radio, no air con, no power anything. Not that I’d recommend going back to uninsulated houses on barren plots as an answer to housing affordability…

        • fab

          Sure, but we can have good design and building performance without going for expensive building materials and fittings. I’ll venture a guess that many prospective first home buyers would rather have their own space, that they can spruce up over time, than share a rental (probably unheated and uninsulated anyway) with mates.
          We seem to build either rabbit hutches for the student market, or expensive pads – what needs to be done to ensure we build apartments which a young couple on an average income can aspire and afford to buy?

          • Angus Robertson

            It requires lower land cost. Our median land costs exceed those of Sydney and are about double Melbourne or Brisbane – all of those places are building many more homes per capita, because building with lower costs is much more profitable.

            Auckland has an exceptionally high land cost and this results in a very slow building rate.

          • Nick R

            Ok you keep hammering your thesis but I’m not sure I believe it.

            Take the St James Suites development on Queen St. It’s a $170m building on land the developer bought for $30m.
            307 apartments and retail.

            So that’s a $200m development, costing an average $651k per apartment. Add on 15% for developer profits and you have $748k per apartment.

            Looking at those figures it’s hard to agree that the price of land is the problem. Even if you flat out halved the cost of the land, that would have only saved $49k per apartment, the would still average about $700k.

            When land is only 15% of the development costs its arguable that trying to lower it can achieve anything in practice.

          • Robert

            Nick can you explain how you arrived at $170million for the development???

          • Nick R

            Several article in The Herald quoted that cost. You can google anything these days 😉

          • Angus Robertson

            Developers are not cash rich investors and operate with a high degree of leverage, which means anything early in a build has a compounding cost which induces much higher cost.
            Then we have sales markets – rental returns and existing sales prices – to consider. If you are a developer where are you going to invest?

            Auckland has an existing stock of apartments that trade at about $450,000 median price and the highest median land costs in the region. Sydney – apartments @ $750,000 and land about 20% less. Melbourne – apartments @ $600,000 and land cost 40% less. Brisbane – apartments @ $450,000 and land cost 50% less than Auckland.

            Where are you going to build your $750,000 apartments? In Sydney where you can make $4million more profit and have a low risk sale into an existing high value market? Into Melbourne where you can make $8million more, but have the risk of selling slightly above market? Into Brisbane where you can make $10million more profit, but have to risk selling at well above market? Or are you going to invest in Auckland where you can make $0million additional profit and be selling at the same high risk as Brisbane?

          • Nick R

            I don’t get it Angus, you’re just outlining more evidence for how land cost has minimal impact on the sale price of apartments.

            You are right most developers are not cash rich. That is why they sell 80% of a building before the borrow money from the bank to start construction. I’m not sure what you are angling at, are you suggesting that all the apartment developments going on it Auckland are run by charities without profit motives or returns? I’m pretty sure their making exactly the level of normal profit they expect to make, if they don’t, they don’t actually build.

            Anyway, please tell me again how the land component at 15% of development cost is the determining factor and not the 85% of other costs, I’m still a little confused there.

          • Angus Robertson

            Yeah, I am trying to show that markets determine the prices of apartments. Sydney is a big rich city; Melbourne is a big moderately rich city; Brisbane is moderately sized and Auckland is the smallest – the implied agglomeration values created are reflected in the values of their apartments. Independent of this we have costs – building materials supply chain is a little more expensive in Auckland, but our labour rates are lower; regulatory constraints in Auckland are lower than Brisbane and higher than Sydney or Melbourne. And then there is land cost, which is the outstanding variable being very high in Auckland.

            Auckland has a high cost structure and a low value market. The intersectional area where you build, sell and make a profit is small.

            I’m pretty sure their making exactly the level of normal profit they expect to make, if they don’t, they don’t actually build.

            By Jove, I think he’s got it “they don’t actually build” is the critical feature in Auckland – not price. In Auckland we have developed the “don’t actually build” aspect to an art-form. To get more stuff built we need to lower costs (land, labour, supply, regulatory) or increase value (rent, population, wealth).

          • Angus Robertson

            Nick R, this is me commenting whilst drunk which is probably not a good idea.

            Anyway, please tell me again how the land component at 15% of development cost is the determining factor and not the 85% of other costs, I’m still a little confused there.

            Land cost at 15% of total cost is obviously not the determining factor, obviously not because at 15% this is getting built. And that is what we want.

            The question is what of the land not under non-tenanted, run down, fire damaged theatres – what if the land is more expensive? Land under parking lots or ancient office buildings is a little more expensive – so that 15% becomes 18%, 20%, 25%. What point it becomes unprofitable to build on – I have no idea.

  • Angus Robertson

    I particularly like this view because it shows that an area that long been dominated by one type of dwelling; detached Victorian houses, is now getting this resource complemented by a good volume of a different kind of dwelling.

    How is such a very, very small volume “good” for Auckland? In the comparable city of Brisbane there are 104 cranes on the skyline.

    …what could be better?

    More apartments being built would be better.

  • SimpleSpace

    And as well, for ageing in place (and/or giving young singles a place to live on the way) I think we should also be having the conversation about accessory/minor dwellings being made a lot more easy to put in in areas with horrendous single dwelling or historic restrictions – regs are so hard to find on Auck Council website you have to phone and ask a person, the fees are heart-stopping (more like subdivision costs) (vs free in Portland and other enlightened places) https://accessorydwellings.org/what-adus-are-and-why-people-build-them/
    A terrific way to double density, a stylish (and hidden) way to keep people in their neighbourhoods and intensify.

    • Bryan

      Infill housing on cross-leased sections was all the rage 20-30 years ago. Unfortunately what often resulted was an old house and a new house located unpleasantly close together, with little privacy for either, and highlighting the clash of building styles. And many of the infill houses weren’t exactly stylish. Would it be any different now?

      I think the San Fran situation is quite different, in that the houses are very close to the street, with a large backyard on to a service lane, so when they build on the rear the new house has it’s own access from the lane and the two houses are separated by small backyards. One of the problems here is you waste a lot of land providing a driveway to the rear house.

    • Timr

      I think you’ll like the provisions in the Unitary Plan to allow conversion of any pre-existing dwelling into two. Bingo.

    • Steve N

      I am relocating to Mt Eden tomorrow into the historic area, and want to see if I can do exactly this..

      It’s currently a tiny 62sqm 2 bedroom cottage on 330sqm. I want to build a rear extension that contains a new north facing living area plus master bedroom/ensuite – but build it in such a way I can live in that bit, and rent out the old cottage, to help pay off the development. When I want to sell it, it needs to be easily converted into a single 3 bedroom home.

      I believe the council’s main concern is allowing minor dwellings will overload the sewerage system – but in reality just as many people could probably live in it as a single 3 bedroom home, rather than 2 tiny ones. I suspect I will run into resistance, but I will give it a crack.

  • Angus Robertson

    It is especially pleasing too that these new apartment buildings are clearly better designed and built than those of the last boom in the mid-2000s.

    They cost 4x as much, are 1.5x better designed and are being built at half the rate of a decade ago. Price inefficiency and slowness are the defining characteristics of today’s development.

    • SDW

      How did you arrive at “1.5x better designed”? Possibly the most useless quantification of a qualitative issue I have ever come across.

      • Angus Robertson

        The new apartments sell with about a 100 – 150% premium over the existing market of old stock apartments, but have depreciated at 3.6% pa. I think the average age for old apartments is 12 – 15 years. Works out to current apartments being 1.15x to 1.6x better quality apartments.

        What figures do you use and how did you get there?

  • I own a one bedroom with a (relatively, these days) downtown and considered upgrading to a two bedroom of similar amenity. I don’t have 900,000-1,200,000 though for any of the new builds (https://www.barfoot.co.nz/556533) – the addition to my mortgage would be more than a two bedroom apartment should cost outright. A one bedroom apartment smaller than mine goes for 650k in the to be built St James tower. I paid ~270k in early 2013 and that was too much.

    Apartment pricing is currently out of whack with reality, imho, and the trend seems to be sticking. Where are the first home buyers going, exactly? Where am I to move? Nowhere, we renovate to make better use of the space we have for a tiny percentage of moving.

  • Robert

    I support the theory Patrick however in practice there are some consequences for those villa dwellers right next door to these apartment buildings. I have been into a few of the apartments at completion and I feel sorry for the immediate neighbours who lose their privacy with the apartments hovering over their back yards. Maybe thats a small price to pay for the common good but from an individuals point of view it is a huge loss. As an urbanist and an Architect I think there needs to be a lot more work done on interface between sites and transitions from one form to another. I prefer a block approach where development is comprehensively planned for the whole block with streets closed removed and new utilities put in for the whole block.. This will give better design in terms of sunlight,privacy and pockets of communal outdoor space. I think you invented the term micro infill with regard to residential development along with Garden grab. The same applies to apartments.

    • James B

      The big problem is that all the sites you’d need would be held by different owners with different willingness to sell. Some will be willing, some will hold out for more, some will simply hold out and then you’ll end up with something similar to the Shoe Sheriff. https://www.google.co.nz/maps/@-36.8712506,174.7771312,3a,75y,124.89h,93.84t/data=!3m6!1e1!3m4!1sVXl48vAHMx4nflhiV1U_Pg!2e0!7i13312!8i6656

      • Robert

        Agreed it will be a challenge but still possible provided the local community is properly involved. For those who are obstructive or difficult then they risk being disadvantaged by neighbouring developments. Personally I find most people will come round once they realise the benefits. It just requires skilled negotiators.

    • Frankly, I disagree. I don’t think doing development on a larger scale produces better results. It usually ends up being monotonous, repetitive, and sterile. If you look at places where developers have gotten their hands on large sites (Morningstar Place in St Lukes, Burton Street in Newton etc.) they’ve ended up being terrible. Whereas look at somewhere developed by different people at different times, like the northwestern central city, or the side streets off the lower end of Franklin Road. They end up not only with more variety and visual interest, but often better design, too.

      Auckland’s got some major obstacles, and one of them is street layout. Even in the inner suburbs, we have very wide roads (by Old World standards) and huge blocks. Thus we end up with very long, narrow lots, which are hard to subdivide later. You pretty much have to put a driveway down the side, and end up with some fairly poor design.

      It would be produce much better results if we cut new through-streets through blocks, rather than cul-de-sac driveways. Narrow streets, small blocks, no setbacks, private open space at the rear. The recipe for success since ages ago.

      I feel sorry for villa owners who expected that their neighbourhood would stay the same forever (or, I would, if they hadn’t made a fortune in untaxes capital gains over the last few decades). But this is a city, and every building should be built on the assumption that it’ll have neighbours some day. Most of our classic architecture until the present day has just been scaled-down farmhouses, and that doesn’t work.

      Townhouse formats mean you’re not so worried about what’s next door. Unfortunately, New Zealand has next-to-no experience of how to build them. We either do monolithic subvidisions, or monolithic apartment buildings. Never anything that works individually, but happily surrounded by neighbouring buildings.

      • Frank McRae

        Very well said.

        The enormous block sizes in Auckland are a problem. It would be good to have more narrow legal roads cut through them rather than the jumble of private driveways and deep blocks we have.

      • Robert

        I think you may have misunderstood my point. I am advocating a block masterplan to help transition the old urban form to the new form and thereby reducing the interface problem and to achieve efficiency as you have made some good points on. I am definitely not talking about one developer and one development. An example is the Wynyard quarter with perhaps more rationalization of streets and public spaces. I agree with you that the mishmash of existing titles is a major obstacle to good urban design.

        • The shape of them is an obstacle, but not the size. They could perfectly well be subdivided further and still provide decent-sized lots.

          It’s a massive challenge to assemble an entire block worth of lots to reorganise them. It’s way easier to buy two, three or four back-to-back lots so you can cut a new street through.

          The problem is that it’s easier still to buy one lot, and put a cul-de-sac driveway down the side. Even if you’ve then got to pay the rates and the cost of maintaining it yourself, rather than handing it over to the council. That’s partly because we encourage that model, and make it impractical to cut a new street through, with absurd requirements of width.

          As for your idea of block-scale masterplans: I’m reading Andre Sorensen’s history of Japanese urban planning at the moment. They used a scheme of land reorganisation, which required 75% – but not unanimous support – in agricultural land. Everyone got a lot of the same size in approximately the same spot, but the boundaries and roads were completely reorganised. There’s no significant cost to the government, and individuals get to keep a property roughly the same as what they had before. It needs to have broad support, but still avoids holdout problems.

          I wonder if that could work here, too. They used it for agricultural land cut up into tiny lots, which is something we don’t have, but in principle it could work for low-density suburban or countryside living lots, too. There’s tons of room to cut new narrow streets between houses in many places. It would involve moving lot boundaries, but probably not infringing on the footprints of buildings.

          In a suburb where most people are building infill houses anyway, why not go for streets instead of driveways?

          • Robert

            We already have the public works act which the Government could amend to allow block reorganization based on 75%. agreement. However I believe a mix of policies blocking say drive cul de sacs and incentivising title changes along with mediation process will resolve most issues. If the choice is a massive apartment block next door or a bit of cooperation and gaining a nice new apartment with sun and views to replace your fading villa then it wouldnt take long for people to realise that cooperation is the best option. The Key is for local and central government to enable a geographical block to be designated a redevelopment zone for reorganization. Once one or two are done well, people will realise the benefits and either sell and make a big gain or choose to remain in their old rejuvenated neighbourhood.

      • conan

        Beaumont Quarter is the poster child of what you propose. It’s great.

        And as a villa owner the only sorrow you should feel for me is that I can’t remove the stupid thing from the section and replace it with a couple of townhouses on the southern boundary. I must remain in the museum while enjoying the things that drew me to the location like walk ability to the CBD and the ‘latte mile’ being a short walk.

  • Russell Familton

    Two days ago I viewed a dirty broken down house on Dominion Rd. Balmoral that was for rent.
    Downstairs under a massage parlor. Dirty inside and out.
    Small and not big enough to swing a cat.
    People are living in these places.
    Please talk to our younger people.
    Build less expensive apartments.
    Stop the gridlock on the roads

    • Dave B (Wellington)

      Agree, this should be a priority. But certain members of the older generation (including politicians) believe they are entitled to control policy in order to keep things just the way they want. This is a major sticking point, and even some of the younger generation get suckered in by it.

  • Ben T

    This website built to track the changes over the coming years in the Isthmus has a crane tracker on it. also some photos of the cranes around Auckland currently too.

    further to that, there is development trackers of public and private infrastructure as well as galleries regarding the architectural concepts and the progress of works.

    http://www.emergingauckland.org.nz/

    Found it a very enlightening website on what projects are being built/planned for downtown.

  • Early Commuter

    Can someone please define “vibrancy” as it’s a catchall that seemingly means everything and nothing

  • Dave

    A crowded city is not a positive.

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