A \u2018truckload\u2019 of new townhouses \u2013 especially in Christchurch and Auckland \u2013 is reshaping the housing market, writes Catherine McGregor in today\u2019s excerpt from The Bulletin.<\/p>\n
To receive The Bulletin in full each weekday,\u00a0sign up here<\/a>.<\/p>\n Townhouses age out of \u2018new build\u2019 status<\/p>\n A curious twist has emerged in the housing slowdown: some newly built townhouses are sitting on the market so long they no longer qualify as new builds.\u00a0In BusinessDesk (paywalled), Maria Slade reports<\/a>\u00a0that it\u2019s having real consequences. To count as a new build, a property must have received its code compliance certificate within the past six months, never been lived in, and be purchased directly from the developer. That status allows first-home buyers to avoid loan-to-value restrictions and access low-deposit lending, including the government-backed First Home Loan scheme.<\/p>\n But with Auckland and Christchurch \u201cawash\u201d with townhouses, many listings are lingering beyond the six-month mark and \u201cfor every listing you might see on the websites \u2026 that masks maybe four or five others that are on the market for sale\u201d, says Christchurch consultant Mike Blackburn. With ballooning supply, fewer of which are available to low-deposit buyers, some developers have reportedly shifted unsold units into rental pools or short-term accommodation, which also strips them of new-build eligibility. Nationally, townhouse median values have fallen 1.7% over the past year, compared with a 0.7% drop for standalone houses.<\/p>\n Auckland\u2019s apartment overhang<\/p>\n The picture is even starker in Auckland\u2019s apartment market.\u00a0According to the NZ Herald\u2019s Anne Gibson<\/a>, citing CBRE research, 521 newly completed apartments remain unsold \u2013 around 20% of all units built in the past three years. Of those, 472 are in suburban projects, 42 in fringe locations and seven in the CBD.<\/p>\n While the absolute number represents just 1% of Auckland\u2019s total apartment stock, the proportion relative to recent completions is \u201cundoubtedly problematic\u201d. Examples are wide-ranging. Ockham\u2019s Whet\u016b block in Pt Chev has been switched entirely to build-to-rent. In Takapuna, the 46-unit Loxley Apartments ended up in mortgagee sale after never being lived in. In the CBD, The Cab on Aotea Square still has dozens of units available, with the developer offering two-year suspended mortgages to attract buyers.<\/p>\n Christchurch\u2019s townhouse glut<\/p>\n Christchurch tells a different but related story. The city is leading the country for overall price growth, with average values up 2.5% in the three months to December.\u00a0But in The Press, Blayne Slabbert reports<\/a>\u00a0that townhouses and apartments are facing clear \u201cpricing pressure\u201d as choosier buyers are faced with a wave of new stock. A quarter of Christchurch homes are now townhouses or terraced houses \u2013 the highest share in New Zealand \u2013 and about 21,000 have been consented over the past 20 years. More than half of new housing consents in the city are multi-unit dwellings.<\/p>\n On the ground, one real estate agent describes \u201ca truckload\u201d of new-build townhouses on the market, with hundreds listed online. Those that sell quickly have garages and plenty of storage; those that don\u2019t sell are languishing on Trade Me for months.<\/p>\n The Horncastle factor<\/p>\n