Back to square one for first-home buyers after build abandoned
First-home buyers in Auckland are being left in the lurch as dozens of developments are falling over and being abandoned.
Fifteen percent of all new apartments in the city aren't being completed, a problem that's adding to the housing crisis.
Antony Hopper went into a bit of a tailspin after finding out his dreams of owning his first home were dashed.
"I was completely gutted and my partner was far more devastated, really crying."
They scraped together a 10 percent deposit, buying off the plans a $600,000 two-bedroom unit in Avondale's Flo Apartments.
Eighty-one of the 91 apartments sold in what the developer described as a landmark complex. However, the $47 million raised was not enough to start building.
It's just one of 35 developments that have suffered the same fate in the past year.
You'd be forgiven for wondering with all the stories about demand outstripping supply why on earth are developments falling over. Well, there are several reasons:
"Just imagine there's a little needle on a little dial and the needle is getting up around the red ink mark," says Connal Townsend, CEO of the Property Council, "and it's - nope, the wheels are starting to fall off we have to turn the tap back down. That's the single biggest problem at the moment."
That's having a huge impact. Fifteen percent of all apartments - 2000 individual units - have not been completed in the last year.
"What the banks are concerned about is if there is a fall in the property market, they're worried the apartments could be affected a little more significantly than other properties," says Prime Minister John Key.
The Government is still urging first-home buyers to consider apartments, but Mr Hopper - who's still waiting to get his deposit back - is urging caution.
"We thought this was the right option, a no-brainer - we took it hook, line and sinker."
Now he's been thrown back in with the property sharks, and back where he started.