Affordability appears to drawing Auckland apartment buyers away from traditional stomping grounds of Parnell and Newmarket to the city's northern suburbs, new research suggests.
An analysis of Auckland apartment sales by the Real Estate Institute of New Zealand shows a surge in prices and sale numbers in Albany, in the city's northern fringe.
There was 400 percent increase in the number of one-bedroom apartments that sold in Albany in the 12 months to February 2019, compared to the 12 months to February 2018, and a 60 percent increase in the number of two-bedroom apartment sales.
REINZ CEO Bindi Norwell says the lift in the median price of both property types further highlighted the strength of the Albany apartment market. "The median price of one-bedroom apartments sold in Albany during the 12 months to February 2019 increased by 16 percent, from $421,040 to $488,500, while the median price for two-bedroom apartments saw a 17 percent increase," she says.
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The REINZ figures also show double-digit increases in the median price of apartments in CBD fringe suburbs Grafton and Eden Terrace - up 15 percent and 17 percent respectively for one bedroom apartments and 31 percent and 3 percent for two bedroom apartments.
However, nearby Parnell and Newmarket saw their apartment markets decline in both the number of sales and the median price.
Norwell says: "Where Grafton and Eden Terrace differed from Albany was in the number of one bedroom apartments sold. Both saw decreases of 16 percent and 29 percent respectively. However, two-bedroom apartments in both Grafton and Eden Terrace saw big increases.
“The [declines] in Newmarket and Parnell indicates a shift in preference in the inner-city apartment market from those eastern city suburbs to the more central city suburbs which are there are more affordable options."
Outside of Auckland, Te Aro in Wellington was the only suburb with a minimum of ten sales across both years to see an increase in both the number of apartments sold and median sales price for both one-bedroom and two-bedroom apartments.
REINZ noted that Te Aro had the second highest number of three-bedroom apartments sold (behind Auckland Central) in the year to February 2019, with increasing year-on-year sales activity and median sales price growth.
“When we looked at the top suburbs for apartment sales outside of Auckland, we noted both the strength of the Te Aro market but also that year-on-year median sales prices increased in all of the other suburb/bedroom combinations with the exception of two-bedroom apartments in Christchurch Central," Norwell says.
"With the sales price increases in these other suburbs, commonly accompanied by sales activity decreases, there is pressure on both buyers and sellers of apartments in these markets to show flexibility where possible in the apartment transaction process."
However, nearby Parnell and Newmarket saw their apartment markets decline in both the number of sales and the median price.
Norwell says: "Where Grafton and Eden Terrace differed from Albany was in the number of one bedroom apartments sold. Both saw decreases of 16 percent and 29 percent respectively. However, two-bedroom apartments in both Grafton and Eden Terrace saw big increases.
“The [declines] in Newmarket and Parnell indicates a shift in preference in the inner-city apartment market from those eastern city suburbs to the more central city suburbs which are there are more affordable options."
Outside of Auckland, Te Aro in Wellington was the only suburb with a minimum of ten sales across both years to see an increase in both the number of apartments sold and median sales price for both one-bedroom and two-bedroom apartments.
REINZ noted that Te Aro had the second highest number of three-bedroom apartments sold (behind Auckland Central) in the year to February 2019, with increasing year-on-year sales activity and median sales price growth.
“When we looked at the top suburbs for apartment sales outside of Auckland, we noted both the strength of the Te Aro market but also that year-on-year median sales prices increased in all of the other suburb/bedroom combinations with the exception of two-bedroom apartments in Christchurch Central," Norwell says.
"With the sales price increases in these other suburbs, commonly accompanied by sales activity decreases, there is pressure on both buyers and sellers of apartments in these markets to show flexibility where possible in the apartment transaction process."
