THE ANTIPODEAN | Cancelled | 39 levels - 120 metres

[bassborg]

This TV3 item about the St James states that the apartment tower is "on hold" due to the downturn in the property market.

Time to rename this thread "on hold".

[Mr_kiwi_fruit]

Fixed

[Dolomite]

Originally Posted by bassborg

This TV3 item about the St James states that the apartment tower is "on hold" due to the downturn in the property market.

Time to rename this thread "on hold".

Here are the comments back from the developer;

The programme was about heritage buildings and Paul was contacted regarding the St James Theatre. We try to say little to the media because most items are only the business of the parties involved. When it came to the St James Theatre Paul was prepared to answer some questions but when asked about the delay in construction he made a brief comment about timing rather than discuss the details of design change, discussion with Council & Historic Places Trust with people with whom it has nothing to do. He certainly didn't say the project is on hold.

[buildemhigh]

Originally Posted by Dolomite

Here are the comments back from the developer;

The programme was about heritage buildings and Paul was contacted regarding the St James Theatre. We try to say little to the media because most items are only the business of the parties involved. When it came to the St James Theatre Paul was prepared to answer some questions but when asked about the delay in construction he made a brief comment about timing rather than discuss the details of design change, discussion with Council & Historic Places Trust with people with whom it has nothing to do. He certainly didn't say the project is on hold.

question, where is your lawyer in all this. I would think you should cancel any agreements that you have made as this isnt going anywhere fast..

[renardo]

He won't be able to cancel his agreement unless there are sunset dates...

[buildemhigh]

Originally Posted by renardo

He won't be able to cancel his agreement unless there are sunset dates...

You dont say. However I would suggest getting a legal opinion on it nonetheless. If there are no such clauses in the agreement (or any other out)then frankly and at the risk of sounding callous to sign an s&p agreement on a development project is naive in the extreme..

Your lawyer at the very least would be able to reasonably ask to see solid documentation that the building works were to begin in 2011.. that would prompt them to show where they were at from a resource and building consent perspective. Also I would have my doubts as to whether the building works have even been tendered yet?

[drosophila]

I would avoid this development Dolomite, unless there are very specific reasons as to why you are so interested? then I'd look elsewhere for places to invest your money, alternatively buy property in Auckland that has already been constructed. Even if the Antipodean started construction tomorrow it wouldn't be finished for a few years.

[Dolomite]

My reasons for sticking with this development are few and admittedly flimsy.

Firstly I paid a holding deposit which I'd rather not just throw away.
Secondly, it has been 5 years since I did this and the property prices are said to have almost doubled. I'm not sure how true this is, but looking at the asking price for similar properties at the moment, it would seem genuine enough.

Having said that, I am tempted to walk away, but there’s more news..
The lawyers have agreed a sunset clause for the contract which will give a contractual date. I don't know what that is yet but I should get it sometime this week.

What do you think?
I appreciate all your comments and hope to hear more.

Thank-you all.

[drosophila]

Originally Posted by Dolomite

My reasons for sticking with this development are few and admittedly flimsy.

Firstly I paid a holding deposit which I'd rather not just throw away.
Secondly, it has been 5 years since I did this and the property prices are said to have almost doubled. I'm not sure how true this is, but looking at the asking price for similar properties at the moment, it would seem genuine enough.

Having said that, I am tempted to walk away, but there’s more news..
The lawyers have agreed a sunset clause for the contract which will give a contractual date. I don't know what that is yet but I should get it sometime this week.

What do you think?
I appreciate all your comments and hope to hear more.

Thank-you all.

True you wouldn't want to throw that money away, I'd be interested in whether they are planning on increasing the sale prices as well? The cost of constructing this building would have also increased, and I'm guessing they'd want to pass this onto to the early purchasers somehow. Let us know what you hear back, in the end we really aren't aware of much more than you appear to be,

[renardo]

If you have a sunset clause then you should be able to get your money back.

[Mr_kiwi_fruit]

Originally Posted by Dolomite

Secondly, it has been 5 years since I did this and the property prices are said to have almost doubled. I'm not sure how true this is, but looking at the asking price for similar properties at the moment, it would seem genuine enough.

It would all depend on what you have paid for the apartment, and what value the developers feel it is now worth in the current market. With you having purchased in 2005 - three years before the GFC, I can see how the price may have been cheaper than purchasing say at the peak of property in Auckland - 2007, but prices have dropped quite substantially in the city centre since then, and quite a few apartments, depending on where they are have no, or negative equity for the present mortgaged owners and are extremely difficult to sell on without taking a substantial loss.

The apartment market is heavily reliant on which building one buys in, and it is presently very unclear where the Antipodean market would fit in all this. There are some very high end apartment developments viz. Stamford and The Sentinel (Takapuna) that have had a hard time selling, and prices have dropped significantly. Banks in Auckland are also very unwilling to finance apartments in the city centre without large deposits and this also affects the market as this decreases the number of liquid buyers available to purchase in the market.

All in all not easy answers. The development will have to prove itself and the only way that will happen is when they come on the markets for re-sale.

[Neitzsche]

It's not all bad in the AK apartment property market. I've just sold my apartment in Precinct at substantially higher than what I paid in less than 3 weeks. That's not unusual for the building, especially north facing. My feeling is that the Antipodean would be in a similar situation. It's a nicer looking building, well speced and in a similar location. The main difference as I see it is one is built, the other not so much.

[drosophila]

I forget the specifics of the Antipodean but from memory there also appeared to be a lot of shoebox apartments in it?


The site, level and orientation of your apartment Dolomite will have a huge affect on its value. One question I have is whether you planned to onsell this apartment before taking posession thereby hoping to profit from increases in value without having to take out a mortgage or whether you intended to hold onto it once completed and rent it out? If the former then I'd warn against it, as there have been quite a few cases of people getting majorly burned doing this. In addition, the market is pretty slow right now so unless you have the ability to pay for the whole unit once completed and aren't relying on a quick sale, I'd really be careful.

[Mr_kiwi_fruit]

Originally Posted by Neitzsche

It's not all bad in the AK apartment property market. I've just sold my apartment in Precinct at substantially higher than what I paid in less than 3 weeks. That's not unusual for the building, especially north facing. My feeling is that the Antipodean would be in a similar situation. It's a nicer looking building, well speced and in a similar location. The main difference as I see it is one is built, the other not so much.

This just highlights what I said with regards to what building you buy in. Precinct is a very desirable address, suitably located in the city centre and easy walking distance to all amenities, galleries, parks, bus stops, trains and ferries and no one can really ruin your view as the buildings all around are existing. There are a handful of 'Precincts' out there but I would say apartment buildings that offer a poor investment currently outnumber the good ones. There are some highly desirable buildings like the higher north facing apartments in Endeans that are like hens teeth, and you almost need to be born into them.

Originally Posted by drosophila

I forget the specifics of the Antipodean but from memory there also appeared to be a lot of shoebox apartments in it?

The potential problem Antipodean may have is, with its proximity to the University it may end up with very few owner inhabitants, and more with 2 - 3 bedroom apartments let out to groups of students causing havoc.

[bassborg]

Originally Posted by Mr_kiwi_fruit

The potential problem Antipodean may have is, with its proximity to the University it may end up with very few owner inhabitants, and more with 2 - 3 bedroom apartments let out to groups of students causing havoc.

The problem I have with it is that it's just butt ugly. None of the renders look good to me... and I think my main issue is that it's going to be a wall of a building along Queen Street. Would be much better to have two towers side by side with some space between them, just to break it up, IMO.

So, as awful as the existing former Theatre Centre is, I hope this project doesn't go ahead in any of the incarnations put forward so far.

[Dolomite]

Crikey! You’re all far more informed and knowledgeable than I am in this property market.

I had originally wanted to get a mortgage on the property and hold onto it, but then thought it would be best to sell it quickly. Now I’m beginning to think that scratching the whole idea and investing back here in Old Blighty is a much better idea. To hell with the holding deposit.

The exchange rate is also a bit of a problem now as the NZ dollar is much stronger against the pound than it was 5 years ago. This means my buying price is a lot higher. My 1 bedroom apartment was going to cost me about £140,000.00 back then, now I’m looking at about £173,000.00. Not really a bargain anymore. However; I’m being told (by the people trying to sell it to me, so how much weight that holds is debatable) that my then $372,000.00 NZ apartment, would now go for about $550,000.00. Uhm, this coming from the people who were going to start building in 2006.

So there we have it. Should I stick with it or start running?

Once again, thanks for all your feed back, it really is appreciated.

[Neitzsche]

While I'd say that their appraisal is overly optimistic, given some recent sales I'm aware of mid to high 400's is entirely possible. Of course this is all theoretical given its yet to be built.

Generally speaking apartments in the AK market aren't known for capital gains, although they can be extremely cash flow positive. Since the recent economic debacle banks have tightened up on leading to buyers in the market. Apartments less than 50smtrs require a 50% deposit. Given the price you locked in I'm guessing a large one bed plus studio or a smallish two bed.

My advice would be if your out for capital gains you're best to put your cash elsewhere. That said in terms of capital gains residential property ain't, and may never be the easy coin it once was. If you take a long term approach the apartment could be a tidy little earner due to high relative rental. Of course rates and body corp come into that equation. That said I believe there are far better places to put your money right now, hence why I exited the market myself.

[Mr_kiwi_fruit]

Originally Posted by Dolomite

My 1 bedroom apartment was going to cost me about £140,000.00 back then, now I’m looking at about £173,000.00. Not really a bargain anymore. However; I’m being told (by the people trying to sell it to me, so how much weight that holds is debatable) that my then $372,000.00 NZ apartment, would now go for about $550,000.00. Uhm, this coming from the people who were going to start building in 2006.

So there we have it. Should I stick with it or start running?

Once again, thanks for all your feed back, it really is appreciated.

I personally would cut my losses and walk away. Obviously try and get all you money back if at all possible. $550 000 sounds very high for a 1 bedroom in Central Auckland. You can buy 3-4 bedrooms apartments for that price - but obviously not at the same level of finishings or the same location. There is no way you are going to make easy money by selling the apartment quickly.

Potential buyers in the apartment market are decreasing at the moment due to
1. Recent tax changes that now prevent people from writing off losses on an investment property (LAQC) against their personal tax - which meant the tax man used to subsidise these investments
2. Banks unwilling to loan without large deposits
3. There is an unclear market as to who actually lives in apartments and who developers are designing buildings for - is it students, yuppies professionals, retired baby boomer's. At one point all focus was on the shoebox apartment for the student - and that proved a dismal failure (see ZEST) then it was onto high end apartments for the wave of retiring baby boomer's - that ended up in hugely discounted apartments.
4. There is a huge difference in what you would pay to rent an apartment as you would to buy the same apartment - sometimes it can be as much as 50% cheaper to rent (in terms of monthly costs) . This is too large and either rentals need to go up or the prices of apartments need to come down.

[The Priory]

Potential buyers in the apartment market are decreasing at the moment due to
1. Recent tax changes that now prevent people from writing off losses on an investment property (LAQC) against their personal tax - which meant the tax man used to subsidise these investments

The way I understood the LAQC changes was the rules did not prevent people from writing off losses against their personal tax. Rather what has happened is that it is now a tax flow through - losses can still be offset against personal income, but any profits that are made in the good eyars have to also flow through as well so there aren't the losses being claimed at say 38c in the dollar with tax only being paid at the company rate of 30c. This is essentially like a Limited Partnership.

However LAQC's will not be able to claim depeciation on buildings going foward.

This is not to say they won't ring fence the losses in LAQC's in the future but at the moment they have not done so.

[Mr_kiwi_fruit]

Originally Posted by The Priory

However LAQC's will not be able to claim depeciation on buildings going foward.

That really was the point I was getting at - not able to claim depreciation on the building which in essence is usually appreciating, making the LAQC a lot less attractive than it was than before the change.