Will there be a rush for six storey apartments?
Saturday, 7 December 2024
Is Wellington expecting to see a rush of high rise apartments as developers begin to look at areas to build under the Wellington City Council’s new increased height limits?
Well, maybe. But not yet.
An apartment block in Mt Victoria which will be the first six-storey complex is going through the resource consent process. It will have 32 apartments, each with their own carpark. The development sits on a massive 1472m2 site in Austin St.
And it will pave the way for others like it.
Apartment specialist real estate agent for Tommy’s John Kettle said it was going to take a while for it to filter through into builds.
He said there was a lot for developers to consider, including where they were going to put a new development in a city without huge amounts of flat land available, not to mention getting through the consent process and planning.
Kettle said it was a good thing for Wellington and would be beneficial for housing in the city in the long term.
Wellington architect James Solari said nothing will change overnight and there was a way to go before we see six storey apartment buildings.
“There has to be a testing of the market appetite for these yet. We also have a number of factors like construction costs and skills sets.”
He said as interest rates come down there was more interest and enthusiasm but there was still a long way to go.
“Wellington’s unique, there is a compact and constrained topographical canvas to work on, and for the long term future of the city it has to carefully evolve.”
Around the city there are plenty of apartment buildings in train like the Lido - a new 138 one bedroom, one bathroom apartment building to be built on the site of the former Commonsense Organics store on Wakefield St.
Other multi-unit developments are on the cards for 152 The Parade, a 25-unit complex in Tawa and a new apartment building at 285 Willis St.
Add to these the smaller ones recently announced like 20 townhouses on the site of the soon to be demolished St Giles church or on the site in Karori left empty after St John’s church was removed.
But none of them are in the six storey category.
With all the announcements, it feels like Wellington should be a hive of building activity.
But in fact building consents are down all around the region - in Wellington city they have dropped a whopping 68% over the last year.
Infometrics data show 59 new residential building consents were issued in Wellington City in the September 2024 quarter, compared with 107 in the same quarter last year and the number of consents decreased by 68.5% in the same 12 month period a year before.
The pattern is repeated across the wider region.
Lower Hutt had 109 consents in the September quarter, down 38.5% from the same time last year. Upper Hutt had more, 86 consents were issued compared to 42 in the same quarter last year but still showed a decrease of 7.9% in the last year.
Porirua had gone from 77 consents in the September quarter last year to 12 this year - a decrease of 44.4% and Kapiti had 37 new residential building consents compared to 127 last year - down 11.3%.
Developer of the Mayfair, Mark Quinn saw it as a step towards rejuvenation of a city that had suffered a lot of recent bad news.
He hoped to start development on the Mayfair project in the second half of next year for an 18-month build.
General manager of the Williams Corporation, Matthew Horncastle, says in the absence of a strong housing market in Wellington, it’s unlikely any mid-size developer would embark on major projects like six storey apartments.
In Christchurch, where the Williams Corporation is headquartered, they have been able to begin a 111 dwelling complex of townhouses, commercial builds and two six storey buildings, he said.
That’s because they could buy land competitively, have a strong construction sector around them and the ability to see through a four-year project that six-storeys would require.
But in Wellington?
“We don’t feel the market is at a point to enter into projects of that nature,” he said.
“You would need to see really clear population growth in the city, you would need to have stability of the core job market… Wellington is still facing major redundancies in the public service.
“The key things are are positive population growth, job stability, market stability, house price increases… that’s what you want before you enter into a four-year-project.”
He said there may be developers out there who are capable of embarking on developments of this scale, but they are few and far between in Aotearoa.
Architect Christopher Hamill said the country is also short of construction firms able to build up to six storeys, which are as close to commercial construction as residential projects come.
The New Zealand project style of developers who sell the building, or units, as quickly as possible once the site is built leaves body corporates responsible for a swathe of repairs from cheap choices, Hamill said.
Apartment building common needs like lighting, lifts and air conditioning are often the first things to fail, he said.
The Wellington Company director Ian Cassels says building taller in the city suburbs will make Wellingtonians wealthier and reduce the city’s carbon emissions – but it will take years to get there.
The biggest hold up? New Zealand doesn’t have the construction capabilities to build at six-storeys, “mainly because we don’t do much of it”.
“It’s a chicken and rotten egg situation,” he laughs.
Wellingtonians want to live in apartments, and won’t shy away from high-rises, Cassels says. There aren’t empty apartments in town, showing it’s lack of stock that’s our problem, not a lack of interest.
“There was this New Zealand dream, but I don’t think that exists anymore. Life has changed quite a bit.
“Unless we get more intensive and make our suburbs more walkable and liveable we will be challenged by the outrageous costs of infrastructure… and the city is the best suburb in a way, it’s got everything: bars, culture, art, theatre. When you live in the city, you tend to stay there, and walk around.”