Thirty-two sections in the first stage of the 600-section Park Ridge subdivision went under the hammer on Tuesday with reserve prices based on the last sales in the adjacent Hanley’s Farm subdivision.
Reserve prices released on the morning of the auction ranged from $500,000 for two 337sqm sections to $700,000 for a 621sqm section.
While Boult’s delighted 10% of the sections — 60 lots — will go to the housing trust for community housing, he’s not happy with the prices released for these other sections.
He says the intent behind thespecial housing area (SHA) legislation, under which Park Ridge, formerly Coneburn, wasapproved in 2019, "was to create lots your average
family, a mum and dad working one and a-half jobs with a couple of kids, could afford to get into".
"I guess I’m disappointed they’re onthe market for that sort of price because you pay $500,000, $600,000, you’re going to spend another $500,000 on putting a house on it, plus all the bits and pieces, minimum spud-in price is goingto be maybe $1.1million, $1.2m, and that’s out of reach of your average working
family, and it’s pretty disappointing.
"Encouraging to see interest rates coming down, but they’ve got to come a long way down before this will enable ordinary families to get into those lots."
"The market is what the market is, but certainly the intent when the special housing legislation was in place was to create affordable lots."
Boult, however, says he’s not blaming the developer — "I guess he’s in there to make a profit, and they’re going to want to get the maximum price they can".
The original Coneburn developer, in his expression of interest for an SHA, had planned very affordable house-and-land packages with houses manufactured off-site.
Commenting on Park Ridge’s pricing, Queenstown Lakes Community Housing Trust chief executive Julie Scott says "look, anyone who’s on our waiting list wouldn’t be able to afford to buy sections at those prices and build a home as well, so they’re not affordable for what we could call low-to-moderate income workers".
However, she says it’s "brilliant" the developer’s gifting 60 sections for community housing — she’s expecting them in about 2027 when the first two stages have sold.
As to whether all sections should have been affordable, "some people had that perception of SHAs, but in actual fact the housing accord and the SHA legislation was from the National government, and it was all about creating new supply".
"And the theory was that would drive prices down if you create an oversupply — whether that happens or not is debatable."
Meanwhile, a property source suggests Park Ridge’s pricing was set off Hanley’s Farm’s final two releases — "this is Hanley’s part two" — so sections weren’t going to be cheap.
"If there were more subdivisions that had been consented that could be sold, then the prices you see on some of these will be a lot less."
‘Good momentum in auction room’
Bayleys regional group CEO Stacy Coburn accepts Park Ridge’s pricing’s at "a premium level", but says he detected "good momentum" in the auction room this week.
Just 10 out of 32 lots sold under the hammer, following 15 pre-sales to building companies. Some sections then sold after post-auction negotiations.
"It’s still a challenging market, and we were still trying to achieve premium prices for our owners," Coburn says.
"If we were to run this exercise in any other part of the country, it wouldn’t be as successful.
However, he suggests, "buyer engagement is still not quite there".
"The official cash rate drop’s been great, but they’ve forecast another two rates drops — that gets buyers to perhaps take a further wait-and-see approach."
Meanwhile, Charlotte Fleck, who successfully bid $520,000 for a 337sqm section — $20,000 over reserve — says "I just thought that wasn’t too bad considering what the last lot had gone for at Hanley’s Farm".
"I honestly did think they were going to be more expensive than that."
