Increased density in Auckland expected to create greater demand for retail

  • Property
  • March 24, 2016
  • Elly Strang
Increased density in Auckland expected to create greater demand for retail

RCG says based on research, 53 percent of the new homes built in Auckland will be attached homes, or high-density living, by 2017.

Rising house prices, an aging population, shrinking household sizes and record migration are the key driving forces behind this move, it says.

“There’s a long term, global trend towards households in developed countries having fewer members. Baby boomers are becoming ‘empty nesters’ and younger people are having fewer children,” RCG director Desmond Wai says.

As a result, the company says there will be an increased demand for new stores and experiences in the areas where intensification is.

The people living in these areas, dubbed ‘urbanites’, are significant spenders when compared to regular Kiwi households.

“Urbanites love to dine out and they crave escape. As a household, they spend twice the national average on food and beverage every year - over $8000,” RCG director and architect John Lenihan says.

The areas in Auckland predicted to be most affected by increased density are the Auckland CBD, Stonefields, Albany, the Western CBD and the Southern CBD fringe.

Auckland CBD’s retail sales are predicted to grow the most, with a $130 million growth by 2018.

Because of this growth in residents, RCG says 51 new food and beverage outlets, seven new supermarkets and 15 clothing and footwear stores will be needed.

The appetite for travel and accommodation and liquor will also grow. However, areas like petrol, department stores and hardware stores are predicted to decrease.

This is because CBD households aren’t travelling as much, and often as they’re renting, they can’t make major alterations to their homes.

On the southern CBD fringe, RCG says new high density living will contribute $30 million to this area’s retail growth by 2018.

Grafton, Kingsland and Eden Terrace are all expected to grow in housing density.

RCG predicts this area of Auckland will need another two supermarkets, 14 food and beverage outlets and another four clothing and footwear stores.

 Out of 355 attached property developments in progress across New Zealand, 75 percent are in Auckland. Explore RCG's interactive map showing these developments below.

 To view the full research paper, click here.

​ ​

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