Apartments are increasingly the best entry point into the property market for first-home buyers. And for retirees looking to downsize, they offer are often an easy way to make their savings go further.
Buyers are spoilt for choice when it comes to the number and variety of apartments on the market, but there is one thing more than any other they need to think carefully about before making a purchase: resale value.
Data analysis from OneRoof and CoreLogic shows that two-bedroom and three bedroom apartments have seen the biggest leap in values since May 2013, jumping 107 percent and 83 percent respectively. Two bedroom units were the next biggest risers, enjoying growth of 73 percent, while growth in standalone houses was more sluggish the more bedrooms they had.
The overall surge in values should give comfort to those thinking about buying an apartment, but there are key things to consider when hunting for an apartment or unit that can deliver future capital growth.
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Stuart Robertson, sales manager at Bayleys City Living Apartments, says buyers shouldn't make their decision solely on price - as the cheapest unit may not offer long-term gain.
"When you buy a house, you can often improve its value by changing the layout or increasing the building's footprint. Apartment owners, however, are limited in what they can do. They can't increase the size of their apartment or do anything to the exterior of the building," he says.
"Buyers instead should focus their attention on the location of the apartment, the quality of the build, the ammenities it offers and what makes it stand out from the crowd.
"For example, a harbour view or an award-winning design can help boost value and keep an apartment building top of mind even years down the track."
A good way to gauge whether an apartment is worthwhile is to read the body corporate minutes, which will highlight any issues the building has and the effectiveness of the building managers.
Mr Robertson says New Zealand's apartment market has changed substantially over the last two decades the market, growing from a relatively small number of inner-city apartment buildings that were seen to be somewhat "bohemian" to a credible option for young families and retirees.
"With the huge growth experienced in Auckland house prices over the last decade, driven by lack of stock, positive immigration into Auckland and an ever-growing population needing accommodation, we have seen a mindset change from groups that would not traditionally have considered apartment living," he says.
Apartment living is no longer characterised by large inner-city developments but has evolved into sophisticated and well-planned living options embracing resident facilities such as pools, green spaces, gymnasiums, and residents lounges.
"With increasing competition between new builds, developers are really considering their target market and offering buyers modern, easy-living spaces. We are now seeing the emergence of boutique luxury developments in the suburbs, for those that do not want the hustle and bustle of an inner-city location," Mr Robertson says.
