Auckland Apartment Market Update: Development pipeline contracts, developer optimism on the rise

The Auckland apartment market is experiencing a significant contraction in its development pipeline, according to the latest research ‘Q3 2024 Auckland Apartment Figures’ report from CBRE. With numerous projects reaching completion and only a few new launches, both the private and public sectors are seeing a marked reduction in activity. Despite these challenges, there are signs of returning developer confidence, suggesting a potential market recovery in the near future.

Key findings from the report include:

• Shrinking Development Pipeline: The number of active apartment projects has decreased significantly. This trend is evident in both the private developer market and the public sector pipeline of social housing. The social housing pipeline has halved over the past two years, with Kāinga Ora cutting back substantially. However, community housing providers are stepping in to fill some of the gap, with three new projects launched this year.
• Built-to-Sell Market: The built-to-sell market has seen minimal activity, with Ockham’s Station M project being the only new launch since April.
• Challenging Presales Market: The off-the-plan presales market remains tough, with only 22 units sold off the plans in the past quarter.
• Developer Confidence Returning: Despite the current challenges, developer confidence is starting to return. Well-capitalised parties are beginning to focus on new projects, anticipating a rising market in the next 18-24 months.
  

Zoltan Moricz, Executive Director at CBRE, commented, “While the current market conditions are challenging, the return of developer confidence is a positive sign for the future. We expect to see more activity as the market begins to recover.”