How a Fresh Strategy Saved this Project When the Market Shifted
When our returning client purchased a house on a large section in Avondale, the initial plan was impressive: demolish the existing house and construct three modern homes, 2 three-storey Highgate duplex and a stand-alone Kingston at the rear. With resource consent granted in late 2021, it seemed like a promising opportunity.
However, as interest rates began to climb and the real estate market softened, the financial outlook shifted. The numbers no longer stacked up, and securing funding for the original plan became increasingly challenging. Instead of pressing ahead, our client wisely took a step back and reassessed the project.
A New Approach
After reviewing the key elements of the development, it became clear that:
- Demolishing a liveable house made the overall cost of the land high.
- While three-storey homes maximise living space on small footprints, they do come with higher construction costs.
Working alongside PDC consultant Phil MacEwen, the client explored alternative options. They concluded that a smaller-scale development—retaining the existing home and building an additional four-bedroom dwelling using Ashcroft’s popular Camden design—was a smarter, less risky approach.
The Outcome
The revised plan offered several advantages:
- Reduced Risk: Keeping the original home lowered the upfront costs significantly.
- Ongoing Income: The client was able to retain tenants in the existing house during construction, ensuring a steady rental income throughout the build.
- Strong Returns: The new home was completed on budget and is now to be rented, providing an additional income stream.
By staying flexible and adapting to changing market conditions, this client transformed what could have been a financially unviable project into another successful Ashcroft development.
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