New Zealand's residential development growth areas revealed
With a recent government-commissioned report highlighting a lack of new supply in the New Zealand housing market, Colliers International's Residential Project Marketing team has identified 10 key areas that are predicted to be the growth areas for investing in new stock.
The areas are all within the North Island's so-called 'Golden Triangle' of Auckland, Hamilton and Tauranga, which collectively make up the fastest-growing area in New Zealand.
Pete Evans, National Director of Residential Project Marketing at Colliers International, says these areas have been chosen specifically for their potential in the new market and because of changes or improvements to the areas.
“These are the areas where we see the most potential for development, largely due to changes being made to improve the infrastructure, amenity or liveability.
“When buying new apartments, terrace houses or standalone houses it’s crucial that buyers look beyond the established areas where minimal change or improvement is possible to places where new infrastructure and amenity will drive future growth.”
Auckland’s Northwest, spanning from Westgate to Hobsonville Point, is anticipated to be a substantial area in the city’s future growth.
What’s unique to this area is that infrastructure is moving faster than population growth, with a $110 million spend confirmed and a further $215 million to be invested over the next 10 years, by Auckland Transport alone.
Transformation of the area that’s already underway includes the development of a new town centre at Westgate, a village and employment park at Hobsonville and development of a master-planned community at Hobsonville Point that will be the largest urbanisation project in New Zealand to date.
Evans says Auckland’s Northwest is a growing area that’s set to develop even further.
"Everything that a community needs is there – good retail and commercial mix, employment opportunities, schooling, public transport and lifestyle elements such as cafes, bars and a farmers market.
"The area is well located for people going south via the Waterview Tunnel, north via to-be-upgraded Northern Motorway and to the CBD via ferry or recently upgraded Northwestern motorway.
"The government’s plan to build a light railway west is set to further improve connectivity."
2. Mount Eden
Mount Eden has long been a much-loved suburb of Auckland, popular for its location and urban lifestyle.
Evans says future growth will be at the north, around Enfield Street and Normandy Road, which has recently been rejuvenated from its light industrial heritage into a bustling lifestyle community with new residential, retail, cafes, popular local bars and eateries.
The area has been tagged for residential development under Auckland’s Unitary Plan, meaning that more development is likely to take place.
The City Rail Link, currently under construction, will add two new train stations at Aotea and Karangahape Road, as well as refurbishment of the existing Mount Eden Station, which is predicted to become the second busiest station in Auckland after Britomart.
3. Dominion Road
Auckland's Dominion Road is predicted to be an epicentre for future residential growth with the addition of a light railway that will run from Wynyard Quarter to the airport, with the first stage to Mount Roskill expected to be delivered within the next four years.
Evans says that as plans are revealed for the new railway, investors and developers should look particularly closely at where the new stations will be – anticipated to be around View Road, Valley Road, Balmoral, Mount Roskill, Three Kings and south through Mangere to the airport.
“As Auckland becomes more urban people will want to live where they can walk to the station to get to work and go out without having to use their cars.
“New transport hubs will improve existing retail amenity making these areas more appealing for people seeking an urban lifestyle and investors.
“Median prices along Dominion Road will vary depending on which suburb a property falls into, but the addition of a light railway will open up the area to better public transport within 4 years.”
Onehunga, one of Auckland’s oldest suburbs has been identified as a key area for growth as part of Auckland’s 20-year plan, with 21,000 people expected to move into the area over the next decade according to planning documents.
Conveniently positioned between the CBD, One Tree Hill, Auckland Airport and its own light industrial area, Onehunga is well-connected by car and public transport options.
Completion of the Waterview Tunnel in early 2017 has slashed driving times and created even easier access to the CBD and entire motorway system.
Future amenity and infrastructure upgrades, including the rejuvenation of Onehunga Mall, aim to create more high-quality public spaces in the town centre.
5. The Eastern Bays
The Eastern Bays suburbs are among the premier areas of Auckland that will continue to be sought after at the top end of the market, largely due to location and the waterfront lifestyle offered.
While most of the area is already well established, Evans predicts that the next major growth will be around Hobson Bay with the completion of the last stage of the 7km Glen Innes to Tamaki Drive Shared Path - Te Ara Ki Uta Ki Tai (the path of land and sea) in 2018 and the recent refurbishment of Orakei Bay Village in late 2017.
“With new waterfront walkways and 20-plus new retail offerings all in one area, as well as bars, eateries, and an adjacent train station, Orakei Bay Village will provide new waterfront amenity for locals as an alternative to the villages of Mission Bay and Saint Heliers.
“Changes in the Auckland Unitary Plan will bring more units to the area, meaning more opportunities for people at the top end of the market to buy new apartments in sought-after locations."
6. Glen Innes
Just 9km from the Auckland CBD and boarded by the sought-after suburbs of the Eastern Bays, Glen Innes is an area set to benefit from the large scale regeneration of the area.
Already well underway as part of the Tamaki redevelopment project, 7,500 new dwellings will be added to the wider Tamaki area over the next 15 years as well as a substantial infrastructure upgrade.
Evans says Glen Innes represents a strong opportunity for purchasers looking to invest in a changing and growing area.
“Glen Innes is still seen as an affordable option, but is well located but the real opportunity is rejuvenation of the village centre, which will be driven by new dwellings and will attract people not only from the local community but the surrounding areas of Stonefields, the Eastern Bays and Panmure.”
Outside of Auckland, Colliers predicts that the centres of the ‘Golden Triangle’ – Hamilton and Tauranga will remain strong growth areas, with future growth extending west to Raglan and north to Warkworth.
Warkworth has been earmarked as a satellite town by Auckland Council, meaning it will experience significant growth with an anticipated population increase of 20,000 new residents by 2030.
To cater for this, 1,000ha of land has been zoned for future urban use and residential development of around 200 homes has already started at the southern end of the town.
The Puhoi-Warkworth motorway set to complete in 2021 will further improve transport connectivity.
Amenity is growing with newly opened retail hub The Grange at the southern outskirts, which comprises of 31 national and local businesses adjacent to a larger scale retail amenity anchored by Mitre 10 Mega.
Evans predicts that Warkworth will become a ‘mini city’ for the north, with the surrounding beach towns such as Snells Beach and Omaha as the seaside suburbs.
“Retirees and people leaving Auckland will be drawn to the lifestyle of the area, surrounded by wineries, beautiful sandy beaches, coastal walks with decent amenity and only a 50 minute commute from the city.
“But it is also attractive for young families as Silverdale is becoming the Highbrook of the north providing an employment base for the growing population as more employers and industry choose to move their bases towards these seaside suburbs."
In Hamilton, the development of a new suburb with the Peacocke structure plan will bring more opportunities to invest in the sought after ‘Golden Triangle,’ which including Auckland and Tauranga makes up over half of New Zealand’s population and economy.
Peacocke’s land is 720 rural hectares less than 10km from the CBD at the southeast of Hamilton, incorporated into the city’s boundary in 1989 specifically to provide for future urban growth.
About 2,350 homes are expected to be built at Peacockes according to council’s indicative proposal, with the land able to host 8,000 houses.
According to Evans, residential development of this area will enhance the southern inner city region of Hamilton which is predicted to become a sought after suburb.
It’s well located with the central city, hospital and university just a stone’s throw away as well as the airport, and rural Waikato to the south, one of NZ’s most productive farming areas.
Connectivity between Hamilton and Auckland will be further improved with the upgrade of State Highway 1 due for completion in 2020, and completion of the
Waikato expressway will mean residents will be able to bypass the city altogether when heading north.
Evans predicts the next big growth area of the Golden Triangle will be west to Raglan.
“Raglan is very attractive as a beach destination, it has a unique town centre with art galleries, boutique retail, cafes and eateries along a vibrant main street, nestled in alleyways and extending out to the wharf, but with good amenity and proximity to Hamilton to support permanent residents.
“We expect that Raglan will become a beachside suburb of Hamilton in the medium to long term, as retirees and people looking for their second or third home look to move away from the main centres in favour of lifestyle locations. Young families will also be attracted by this unique beachside community and a short commute to Hamilton by Auckland standards.
“With a median price of $629,800 (according to QV) the west coast town remains relatively affordable. Anywhere with water views or direct beach access will have higher value but New Zealanders like being by the water, and as a scarce commodity it will always achieve higher growth than traditional residential which can be repeated in many locations.
“Raglan will be the Byron Bay of NZ, which has grown significantly from its laid back ‘hippy’ origins over the last 30 years has become one of the most sought after townships on the east coast of Australia.”
Also part of the Golden Triangle and one of NZ’s fastest growing centres, Tauranga is predicted to remain a strong growth area.
Evans says Tauranga is particularly popular with those wanting a lifestyle change.
“People are drawn to the area for its sunny weather, beachside location, and perceived slower pace of life – but with good employment opportunities and a strong local economy.
“There are a number of existing units and apartments in the market, which are appealing for people going from larger family homes who are wanting low maintenance or with second homes to have the ability to lock up and leave.
“Development will always try to stay along the coast but the next big growth area will be the re-gentrification of Tauranga central as the CBD is transformed with more development, an increase in residential, commercial, retail and amenity to support the growing population.”
The development of the Farmers site on the corner of Elizabeth Street and Davenport Road in the CBD is an example of how the CBD will change over the next 3 years.
The development is set to pump $100 million into the town centre with plans for two levels of retail, about 400 additional car parks and approximately 100 high end apartments and terrace homes.
A new university campus next to the CBD is also attracting younger people to the area.
The growth of New Zealand is being constrained by lack of infrastructure, bank funding and skilled workers in the construction industry but this lack of supply is only keeping unsatisfied demand high for areas where major improvements are planned or in progress.
These suburbs and cities have been selected as they represent opportunities for new dwellings in areas of high future demand in the short to medium term.