Townhouses have become a significant growth component for the New Zealand housing market, making up almost half of new dwelling consents across the country.
According to new analysis from CoreLogic, townhouses made up 45 per cent of new home consents across the north and south island, up from just 6 per cent in 2012.
Analysis in the latest market trends reports shows that in 1984, standalone houses made up 80 per cent of all dwellings in New Zealand, but that’s now down to 75 per cent.
CoreLogic Chief Property Economist, Kelvin Davidson, said back in 1984, standalone houses accounted for 80 per cent of all dwellings in NZ, but that’s now drifted down to 75 per cent.
“On the flipside, the reduced share for houses has been mirrored by a rise for apartments and lifestyle properties, and in fact the townhouse and flats category was 13 per cent in 1984 and still sits at that figure today,” he said.
“The national data also masks interesting trends at regional level.
“Across our three largest centres (Wellington covers the City, Porirua, Lower Hutt, and Upper Hutt), the townhouse category has been on a clear rising trend for a number of years now, especially in Auckland, from around 2016 onwards, stemming from the Unitary Plan and the shift to more intensified housing on existing brownfields land.”
Mr Davidson said Christchurch had a higher share of townhouses compared to Auckland, at almost 24 per cent, as opposed to 16 per cent.
However, the growth in Auckland over the past seven years has been greater.
“Of the 39,600 townhouses built across NZ since 2016, nearly 25,000 have been in Auckland, or approximately 63 per cent of the growth,” he said.
“For comparison, Auckland has about 38 per cent of the national stock of this type of property.
Mr Davidson said townhouse stock had surged the most in Rodney, Papakura, Manukau and Waitakere, rising by 50 per cent or more since 2016.
Of those areas, the biggest contributors to growth in Auckland has been Waitakere, including Hobsonville, at 33 per cent, followed by Manukau (24 per cent) and Auckland City (19 per cent).
“It’s always a little difficult to disentangle supply from demand as the most important driver for the rise of townhouses; did tastes change and developers respond, or have buyers just had to purchase what was available?” Mr Davidson said.
“In reality, it’s likely to be a bit of both, but certainly buyers can access at a lower price point than other dwelling types.
“For example, our latest median value for Auckland flats and townhouses is around NZ$775,000, versus the figure for houses of about NZ$1.12 million.”
Mr Davidson said townhouses were now a more prominent feature of the housing market, particularly in the largest cities, and this was likely to continue.
“Given they use land well and can be built close to existing infrastructure such as transport links, they provide a different and cheaper option for a wider range of property buyers,” he said.
“The obvious aim would be that the Government’s current housing supply rule changes – ‘Going for Housing Growth’ – will prove effective in keeping the townhouse building pipeline strong over the medium term, alongside general growth in all dwelling types.”
