First of only four Auckland apartment developments with foreign buyer exemption
The Pacifica apartment building in Auckland, which is currently under construction, has now reached level 17 in the build, becoming a visible feature on the Auckland skyline for the first time.
The 57-level apartment building was also the first to obtain an Overseas Investment Office (OIO) Transitional Exemption Certificate, which enables overseas buyers to buy into The Pacifica development without the new OIO restrictions or further OIO approvals being applied.
In October last year the New Zealand Government passed legislation effectively banning foreign buyers from purchasing residential property without first obtaining OIO approval. Singaporeans & Australians are exempt from the government’s foreign buyer restrictions.
However, developers of new apartment buildings were able to apply for a transitional exemption that allowed them to continue to sell apartments ‘off the plan’ to foreign buyers. Complying developments must comprise a multi-storey apartment building with 20+ residential dwellings.
Applications for a transitional exemption certificate closed last Friday, and just four approvals were granted, according to the OIO, with The Pacifica - on Commerce Street in Auckland’s CBD - being one of three of the new apartment developments in Auckland’s CBD and one more in Albany.
Foreign buyers’ choice of property purchase is now limited to just these four projects.
At 178 metres tall, The Pacifica is a 57-level residential tower being developed by Hengyi Pacific, a respected Australasian developer, that’s set to dominate the skyline of Auckland - New Zealand’s largest city.
To date approximately 80% of apartments in The Pacifica project have been sold. Construction of The Pacifica is expected to be completed in the fourth quarter of 2020 – in time for the next America’s Cup.
When complete, The Pacifica will house a boutique hotel and 282 apartments with a selection of 1, 2 and 3-bedroom apartments still available for sale. Amenities include a heated lap pool, sauna, steam room, spa, gym, media room, residents’ lounge, library and barbeque terrace. Car and motorbike parks, bike racks and storage cages are also available.
Gavin Lloyd, CBRE’s National Director of Residential Projects in New Zealand, says “It is great to see The Pacifica poking above the Auckland skyline – and it has so much further yet to go. It is also good that its transitional exemption approval has sparked a lot of interest from international buyers.”
CBRE estimated that prior to the new foreign buyer rules there were approximately 1,200 foreign buyer sales in Auckland per year. “Developments with a transitional exemption are uniquely placed to take advantage of this market”, said Lloyd.
The foreign buyer ban has been cited as contributing to the Auckland market price growth slowdown.
However, Lloyd said, “In recent months we have sold a number of apartments in The Pacifica to off-shore buyers impacted by the position of the government in relation to foreign buyers. We are working with buyers from the US, Canada, Asia and the UK. The recent slowdown in the Auckland real estate market is now being perceived as a buyers’ market and presents an opportunity for off-shore investors”.
The international market remains very interested in New Zealand as a safe global destination to invest in.
The increased exposure to the country as a visitor and education destination is also translating into stronger interest from property buyers attracted by a sound return on investment in the Auckland market, according to Lloyd.
“In the recent subject rankings, Kiwi universities placed in the top 50 institutions in the world for 22 subjects and in the top 100 for 39 subjects. The University of Auckland is New Zealand’s leading university in the QS World University Rankings, and the quality of education in Auckland is one of the real selling points of The Pacifica amongst Hong Kong investors,” says Lloyd.
“The historic long-term growth trends for Auckland property show that, regardless of market cycles, property prices in Auckland double every 7 to 8 years.”
Auckland was recently ranked the third best city in the world for quality of life on the index compiled by consultancy giant Mercer, driving immigration interest from other parts of the world.
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CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
