new zealand, property investment, queenstown


Apartment levies will "kill growth"

Auckland City's plans for steep new apartment charges will kill the city's high-density building market, said developers. But others are delighted about the rise, saying developers should pay more.

Robert Holden of developer Conrad Properties said the fees were so extreme that he would move most of his work to Australia. He calculated the fees would rise from the present $6000 a unit to $80,000 in the worst-case scenario.

The Sydney-based developer said that as a result, he would scale back work here and instead concentrate on Sydney, Perth, Melbourne and Brisbane.

"This will kill growth," he said. "It will choke development but it will be boom-time for any existing apartment owners," he said. Developers would not be able to afford to build, so the value of existing apartments would rise, he said.

But mortgage broker and investment adviser Kieran Trass of Hybrid welcomed the changes, saying higher fees would prevent more low-quality units being built

Developers should pay more for infrastructure and other city services, he said, having made so much money out of the CBD. "They've have had it too easy for too long and it's allowed them to build the cheap and nasty units."

On its website the council outlines the reasoning behind the proposal. 

"Auckland is growing rapidly," it says. "The population is increasing and there is a significant amount of commercial development in the city. 

With growth comes a great deal of opportunity but it also brings increased costs to manage the growth of the city, and ensure we provide the assets and services that are needed for Auckland to remain a great place to live and work as the city grows." 

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Source: The New Zealand Herald 28 Feb 2007

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