Developers sell land despite having housing plans amid market ‘squeeze’

Saturday, 14 October 2023

Thirty-five houses were to have been built at the end of Bowenvale Ave in Cashmere, but the developer has now put the land up for sale.

Property developers with major home building projects in Christchurch are putting their land back up for sale after shelving their housing plans.

Several large blocks now on the market were until recently on track for house and land developments.

They include the former All Seasons Hotel site on Papanui Rd in Merivale, bought for $12 million two years ago, and a five-hectare block in the Bowenvale valley, where 35 homes were to be built. Both blocks are described by marketing agents as ripe for housing development.

Kelvin Davidson of property analysts CoreLogic says some housing developers are feeling the squeeze.

CoreLogic’s chief property economist, Kelvin Davidson, said that while there was still strong demand for new homes in Christchurch, the equations had changed for housing developers.

“Prices for any units they develop will have fallen from that they would have been at the start. Construction costs have gone up in the meantime, and so have interest rates,” he said.

“It costs more to put it up, and if you are borrowing more to fund it, that costs more too.

“They are getting the squeeze from both sides.”

Davidson said some developers might also be facing cashflow issues, and might be keen to sell even if they had sunk considerable funds into a project.

In the developers’ favour, immigration was at record levels, and land with development consents was worth good money to potential buyers, he said.

The Papanui Rd land is owned by Merivale Villas Ltd and was cleared of the quake-damaged All Seasons hotel in 2018. The company has resource consent to build 61 units on the land in buildings of two and three levels, including semi-detached and terraced housing.

The land covers 7300m² and has a rating valuation of $10.24m.

The former All Seasons Hotel in Papanui Rd under demolition in 2018. The land was sold to housing developers Merivale Villas Ltd, and is now on the market again.

Merivale Villas Ltd is partly owned by Mike Greer Homes, which is headed by housing builder and developer Mike Greer and has Christchurch businessman Ben Gough as a major shareholder.

The same Greer-Gough partnership is behind the Madras Square housing development on the former Breathe site near Latimer Square in the central city.

The Bowenvale Ave site was to have become the Bownvale Heights subdivision. The formerly undeveloped land is owned by Auckland-based GCO Group, which paid $2.75m for it.

The group is headed by Andrew Bendemski and has property developments across the country, including the Blue Skies housing development in Johns Rd, Christchurch.

The subdivision plan for the Bowenvale Ave property is for sections ranging from 564m² to 2121m². The free-standing houses were to have been designed by architecture firm Gravitas.

Also for sale is the former Kiwi Holiday Park in Linwood Ave, Bromley, for which Auckland company Inspire Residential paid $1.84m in 2021. The company planned to build 25 homes on the land.

Another potential redevelopment site for sale in the city is a block of older homes owned by and next to The Palms Mall in Shirley.

In Leander St, Papanui, near Northlands Mall, a 3500m² site with an approved subdivision plan is on the market, as is a 3000m² New Brighton Rd development site in Burwood.

In Halswell, supermarket owner Woolworths is selling a 21-hectare Halswell Rd site for an upcoming 250-home development, which will be built alongside a new Woolworths supermarket and retail centre.