1. Home
  2.  / In Developing News, Now Is A Good Time

In Developing News, Now Is A Good Time

As the property market seems to be in a bit of a lull, development-ready sites are actually selling at huge discounts, writes Lucia Xiao.

By: Lucia Xiao

30 June 2022

When it comes to property development most people would know this as the transformation of Auckland housing.

Every time you go out you will most definitely see a piece of land that once housed a little bungalow of a home, now levelled to make space for five or more townhouses, or even an apartment building.

It is very clear Auckland is growing, so this begs the question: “Where are we going to house everyone?”

Even Auckland City Council has publicly acknowledged this by wanting to change its rules on building height and density, changing various zonings under Auckland’s Unitary Plan.

But why let the council have all the fun?

You, too, can join in Auckland’s future of housing developments, and you don’t have to spend too much money.

Right now, as the property market seems to be in a bit of a lull, development-ready sites are actually selling at a huge discount. A great example of this is a central Auckland property, Mount Wellington to be exact, which recently sold for $1.47 million. Just for a bit of context, this property covers 809m2. So, in development terms it is possible to fit eight to 10 townhouses. Just to add to the enticement, the neighbouring property was sold for $2.5 million in December last year. That’s over a million dollars difference. Now, if you have that extra million, you can definitely cover the cost of building several townhouse-style dwellings on the site. Sounds pretty good, doesn’t it?

‘You’ll definitely need to be smart and have a good strategy you can work from'

Case Study

But before you go on a spending spree, just be mindful of your own financial capacity. We have seen a few developers overreaching by going for big sites and not being able to finish the builds simply because they ran out of funding. So you’ll definitely need to be smart and have a good strategy you can work from.

Here is a real-life case study where we helped a first home buyer to buy their property:

After a few months of searching this client finally secured a property in Henderson. The land size is a good start, being 630m2. It’s a corner site too and these usually sell for more. However, this property was purchased for just $1 million. The property itself has an existing house with three bedrooms, two bathrooms, and a garage space for two cars.

Although the current zoning for the property is single house only, very soon Auckland’s new urban planning will kick in and upgrade this property to “urban zoning”. This means that in August this year my client will have the green light to add two more dwellings (up to three stories without needing resource consent) to the site, which will add to their rental income and, more importantly, add more housing to those who need a home to live in.

More Dwellings

For a 600m2 with an existing dwelling of this size, you would easily be able to fit two more dwellings in the back (or the front, depending on where the existing house is situated).

A duplex would fit quite nicely and can have two to three bedrooms in each dwelling. Of course, the rental yield will only go up from there.

So, is now the best time to buy a development site?

The market always changes and you never know what is going to happen next. But right now there is no doubt property prices are becoming more accessible.

With the future of Auckland city changing to a denser, cosier type of housing, buying a development-ready property is a fantastic idea.

Don’t just be an investor, become a property developer too – it’s not as hard as you might think.

Advertisement

Related Articles