Needed: Another brick in the wall

Needed: Another brick in the wall

Total Property - Issue 5 2016

In Auckland just two words can turn an average three-bedroom home into a multi-million-dollar prospect: ‘Grammar zone’.

The golden zone in inner-city Auckland offers children access to two of the country’s most prestigious schools: Auckland Grammar School and Epsom Girls Grammar School.

Experts have long noted the Grammar zone effect on the residential property market in Auckland where housing stock is mostly low-rise.

However, the city is embracing high-rise living with scores of new apartment developments under construction or planned within the Grammar zone. With well over 2,000 students each, the two schools have rising rolls and urban intensification will push them higher with one commentator quipping that, “School assemblies will need to be held at Eden Park”.

While property developers believe the answer lies in expanding school sites, Epsom MP and Act leader David Seymour has lobbied Education Minister, Hekia Parata, to change enrollment rules - even suggesting removing the right of new apartment residents to send their children to the grammar schools.

“I just look at the advertising that surrounds a lot of these new developments. It used to be ‘Location, Location, Location’. Now it’s ‘Grammar Zone, Grammar Zone, Grammar Zone’,” he says.

The fact is the Ministry of Education has to find space for 107,000 more students in Auckland over the next three decades with areas feeling the most demand including the Grammar Zone, Pt Chevalier, Westmere and Mount Albert.

This year, the Government will spend $11 billion on education with much of the new money to be spent on school property.

Statistics NZ says education building consents are valued at $1.1 billion for 2015 - an increase of $404 million from 2014 and the first time education building consents have surpassed $1 billion in a year.

Of the $1.1 billion total, 70 percent is for new buildings, while 30 percent is for building refurbishments.

One option suggested for schools struggling to cope with expanding rolls is leasing spaces in commercial buildings.

Jerome Sheppard, head of the education infrastructure service, says: “We do lease commercial property throughout the country - usually where education or services cannot be provided from existing school sites.”

Alternatively, a good example of a school making clever use of purchased commercial space is Auckland’s Dilworth School. The private boarding school for boys, purchased Hotel Du Vin in Mangatawhiri, south of Auckland, and spent a year converting it into a rural campus. Before the conversion, the 15ha property, comprised 48 chalets and a vineyard.

However, commercial property consultant Paul Keane of RCG, says expanding school premises into commercial spaces in Auckland is not that easy. “Available land and commercially-zoned premises are in fierce demand with the cost of buying land ranging from $500 to $4,000 per square metre.”

Keane says the long-term answer is for migrants to occupy areas in New Zealand where land is more freely available but it can only be done if they become business hubs. “Not everybody needs to live in Auckland if employment opportunities are created elsewhere,” he says.

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