Empty office buildings ripe for residential conversion

Working five days a week at the office. Remember those days? Now we’ve got Auckland CBD office vacancy rates hitting 15.2% as of Q4 2024, with secondary office space nearing a disturbing 20.6% vacancy.

Meanwhile, demand for residential property—especially CBD living—is on the up. Could today’s empty offices in Central Auckland offer tomorrow’s residential housing dream?

Precedents
While some people have been doom-scrolling commercial real estate, certain developers have seen opportunity and done the hard work.
• The CAB building comeback: The 18-storey CAB building in Aotea Square has gone from abandoned government building to 118 “swanky” apartments.
• The Domain Collection: Scheduled for completion in 2026, this project is converting the former Fidelity Life headquarters into luxury CBD apartments—because apparently, the best way to secure your financial future is to literally live where the insurance company used to be.
• 51 Albert Street: This clever conversion combines hotel and eateries on the lower floors with private apartments above.

These aren’t just renovations—they’re complete urban metamorphosis.

Developers are spoilt for choice
• Auckland CBD: 15.2% vacancy (secondary offices at 20.6%)
• Wellington: 8.0% overall vacancy
• Christchurch: 4.5% CBD vacancy

The government isn’t going to stand in the way. Its “Going for Housing Growth” programme effectively shreds regulatory red tape that used to strangle conversion projects. New rules stipulate that councils must allow mixed-use development (not “may” but “must”); buildings can rise up to six storeys in walkable catchments; urban limits have been banned; and apartment balcony and minimum size rules have been ditched.

Not for the faint-hearted
Office building conversions are a minefield for the uninitiated, triggering what’s called a “Change of Use” under the Building Act. There’s a laundry list of conversion costs (potential killers): building consent and resource consent fees, structural upgrades (residential has stricter requirements), fire safety installations, additional acoustic requirements (because nobody wants to hear their neighbours fighting), kitchen and bathroom installations, and connection charges (5–8% of construction budgets—yes, really).

Developers also look at other fundamentals, including good transport connectivity, handily located urban amenities, and local council policies that support density. Then there’s the building itself—natural light, floor plates that don’t require architectural gymnastics, structural integrity for residential loadings, and availability of parking.

Not every empty office is destined for residential glory. The timing’s got to be right, too. When the commercial market recovers, acquisition opportunities will shrink.

However you look at it, the conversion trend isn’t just a COVID blip. International examples from NYC to London underscore this global phenomenon. There’s no argument that conversions support sustainable urban development goals. Meanwhile, the housing shortage won’t fix itself, mixed-use communities actually make sense, and government policies actively support densification.

Struggling to find your dream CBD abode? Call 0800 GOODWINS for a chat or check out our listings.