Sometimes the papers are just fishing.

Posted on 07/09/10 in General, No Comments

I read an article in the Wellington Post yesterday that really annoyed me.

It was this article.

Were the Amanda Fisher and Catherine Harris, claim that Wellington may be due a flood of cheap apartment sales because of over supply.

The main point of their argument was that 1000 apartments are due on the market this year, unfortunately they didn’t dig very deep or they would have known that this figure is totally incorrect.

The worst kept secret in Wellington property is that Conrad Properties was due to “Put on Hold” their iLoft development near the railway station.

Add to that what a little digging would have uncovered which is that the same companies “Victoria” street apartments (414 of them) are also shelved.

I’m also aware that another 132 apartments that are planned for Wellington are also to be canceled due primarily to funding problems which have nothing to do with rent ability or value concerns.

So lets recap, the article said there are 1099 apartments due to be built or complete in the next 18 months.

Take out iLoft @ 288 apartments

Take out Victoria Street @ 414 apartments

I also know of 132 Wgtn apartment not going ahead

Then theirs the watermark apartments which are also consented but will not be built now, and that’s without event looking at stalled developments like Te Aro Towers or some of the other Merge Property sites.

By my count the 1099 apartments due to be constructed is actually less than 100!

The rest of the article was based on rent values coming down and this impacting property values, but then this morning the same paper has printed this article.

“Capital’s rents still rising despite tenant’s market”

The crazy part of this article is that they are using the same people who were quoted saying the rental market was soft yesterday to prove their point that the capitals rents are still rising????

How does that work?

The main bulk of all these articles seems to be the Soho building on Victoria street has flooded the market for rentals with it’s 340 apartments adding 100 rentals to the trade me to let list.

But this too will pass, this number of new apartments on the market will flood the market it may even move the rental figure for inner city apartments down a little bit for a while, but the market will recover.

Developers can’t afford to get this stuff wrong which is why so much stock has been put on hold, councils don’t care they will allow a resource consent to be issued but that doesn’t mean an apartment building will be built.

In fact in most cases when a resource consent is issued a building never gets out of the ground.

The other issues that give Wellington great appeal as an apartment destination are….

  • Limited space due to the layout of the city.
  • Limited high limit as most of the city can’t go over 27m
  • Council Urban design issues making it hard to develop
  • Petrol prices making inner city living appealing
  • Shopping, coffee culture and inner city life that’s unique to downtown Wellington
  • High entry cost to owner occupier housing elsewhere in the city
  • No other options for new home buyers in the central city

Ultimately what annoys me about the press is they seem to be willing to print any badly investigated trash that grabs attention no matter how many of the core facts are incorrect.

Then print the counter argument the following day….

Watermark Not Happening.

iLoft “On Hold”

Metrpol One of many Merge Developments now a non starter

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