– Four neighbours withdrew their homes from sale after failing to find a buyer due to Watercare’s restrictions.
– The properties have a combined RV of over $14m and are spread across 3.4ha on the edge of Orewa.
– Developers face challenges with Watercare’s announcement, causing a shift towards other centres like Queenstown-Lakes and Hamilton.
Four neighbours surrounded by a sea of earthworks and diggers have pulled their homes from sale after failing to find a buyer.
The lifestyle blocks on Auckland’s northern fringe had been on the market for just over a year, with the owners pinning their hopes on a developer buying all four.
Barfoot & Thompson listing agent Eddie Zhao told OneRoof that an offer fell through after Watercare announced that no new developments in the area would be able to hook up to its water and wastewater networks until at least 2031.
Zhao declined to reveal the identity of the interested buyer and what they had offered, but the properties, which sit on 3.4ha of land, have a combined RV of just over $14 million.
The 3.4ha of land property has a combined RV of just over $14m. Photo / Supplied
“That’s very private information,” he said, but added: “The price per hectare that developers are prepared to pay depends on things like the land contour and the percentage of usable land. The prospective purchaser said he was unlikely to get approval and would have to wait until [Watercare’s new treatment plant at] Army Bay was ready.”
Zhao, who sells development land and completed new homes all around Auckland, said parts of West Auckland were similarly affected by Watercare’s announcement, made at the end of last year. OneRoof has previously reported that developers face selling sites at a loss after their properties were “red-zoned” by Watercare.
“A lot of people did not know. It was shocking; there was no warning. They did not tell us until it happened,” Zhao told OneRoof.
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Ray White Orewa business owner Dylan Turner, who has sold much of the development land and finished plots in the area, told OneRoof that developers would typically pay between $1.5m and $2.6m per hectare for land, a premium of 20% or 30% over RV.
“If they get an intensification permit, they might pay more. They can do on-site catchment plants as mitigation,” Turner said, pointing to developments in other parts of Auckland that are currently doing so.
The four homes on West Hoe Heights used to be surrounded by farmland and bush, but are now hemmed in by diggers and the hundreds of townhouses that have sprung up on the edge of nearby Orewa.
Barfoot & Thompson agent Eddie Zhao: “The prospective purchaser said he was unlikely to get approval.” Photo / Fiona Goodall
The Strathmill development next to the lifestyle blocks started before Watercare’s announcement. Photo / Supplied
One of the owners, Trevor Knox, told OneRoof that the group was making fresh plans. “We love our house; we have got good neighbours. So, we are now spending money on the house and will stay here,” he said. “It’s still a lovely place to live.”
The land abuts a 433-home affordable housing project dubbed Strathmill. The development is being spearheaded by Myland Partners and is unaffected by the Watercare announcement.
Director Andrew Fawcet told OneRoof that 80% of the development had been pre-sold, with the houses now under construction.
He said Strathmill had infrastructure in place to ensure full connection to water and wastewater. “Our project remains unaffected by zoning constraints … as our infrastructure planning and approvals are very well-advanced,” he said.
“We have not seen any sign of anxiety regarding service connections impacting sales for Stage 1 of Strathmill. Rather, sales performance has been strong.”
OneRoof subsequently asked Fawcet if any of his development companies had made an offer on the West Hoe Heights properties, but he had not replied at the time of publication.
A striking cedar-clad four-bedroom, two-bathroom home for sale at Quaifes Road, in Halswell, Christchurch. Photo / Supplied
Bayleys head of insights Chris Farhi said Watercare’s change of tack created risk and disruption for developers.
“It is good to have clarity around these things, but what it means is that developers who might have typically operated in markets like Auckland pivot to other centres,” Farhi said.
“We have seen a big pivot to Queenstown-Lakes, Hamilton and Tauranga. There is a view that development [there] can be a little more streamlined, that councils are a little more straight forward.”
Farhi said that it is a challenge for councils and developers, who both want to get more housing in the market. “Developers can be quite nimble around what they are doing versus councils that have really long-term views. There are pros and cons for greenfield developments versus more centralised developments around the existing public transport and other networks.”
Andrew Deutschle, Watercare head of wastewater planning, said the zones aimed to give clarity to developers.
“Last year, we were receiving regular requests from developers for information about the capacity of our water and wastewater networks. In response, we developed network capacity maps to give them clearer guidance on where growth is supported and where closer monitoring is in place. These maps were recently refreshed to make them easier to understand,” he told OneRoof.
“Our aim is to support developers in doing their due diligence and making informed decisions. We want to reduce situations where developers invest money in buying land or developing plans, only to find out later that they can’t build what they had hoped.”
He added: “There are many factors that determine whether a property sells, with our network capacity being one of these. We acknowledge that our network capacity can influence the sale of a property where the intended buyer is planning to change the use of that land. This is not unique to the Hibiscus Coast.”
“Where possible, we softened the release of network capacity limitations by allowing developers with existing resource or building consents to connect when they’re ready. The examples are in Warkworth and Wellsford where major programmes of work are underway to upgrade treatment plants and pipes.
“On the Hibiscus Coast, we will invest about $500 million in wastewater infrastructure between now and 2034, and that includes a major upgrade to the Army Bay Wastewater Treatment Plant.”
Green paddocks surrounded by new housing are not just an Auckland phenomenon. In the rapidly growing Christchurch suburb of Halswell, a smart house on nearly 3ha on Sutherlands Road sold for $8.55m just over a year ago – almost twice its RV.
And last month, a 3.4ha block of land on the other side of the suburb at 70 Quaifes Road went on the market.
Bayleys listing agent Chris Jones told OneRoof earlier this month that the sale of 70 Quaifes Road was unusual.
“Often these subdivisions have an older cottage on them, whereas this property comes with a substantial award-winning home,” he said, adding that buyers should ignore the RV of $5.3m.