The decision to carve up New Zealand’s most expensive listing - the super penthouse in New Zealand’s Pacifica tower - into three separate apartments has opened up debate on just how high prices for high-rise living can go in Auckland.
New Zealand Sotheby’s International Realty is inviting buyers to either submit tenders for the 1219sqm two-storey penthouse – previously on the market for $42.5m - or put their hand up for one of three other options for the space: a two-storey 603sqm apartment; a single-storey 300sqm apartment and a single-storey 260sqm apartment.
All are being offered as warm shells – finished on the outside, but awaiting full interior fit out.
New Zealand Sotheby’s International Realty agent Pene Milne, who is marketing the property, would not be drawn on the price points of the new offerings but said that central city high-rise apartments with harbour views would always fetch more than apartments located in Auckland’s city fringe suburbs – even luxury ones.
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“If you look at [luxury apartment markets] overseas, the prices here are not even close,” she said.
“I understand this is Auckland, but you’d have to travel a long way to get this sort of lifestyle in other countries.”
Milne said top-end buyers who had been inclined to choose luxury apartments developments in their home suburbs were increasingly open to downtown Auckland as an option.
“They can walk to the ferry to Waiheke, they can walk to the office, they’re in the city seeing what downtown offers. That divide that we used to have – where North Shore people didn’t come across the bridge, and St Heliers didn’t move west - that’s going.
An artist's impression of the Pacifica super penthouse. Photo / Supplied
“New Zealanders are forward looking. In two years’ time we will have caught up [with international cities].”
Milne said that despite genuine local interest in the super penthouse at its previous listing price, “Covid headwinds” had slowed international interest.
“We got to the point where we said, ‘What are the other options?’. These options open out to people who have always wanted to design their own apartment but on a smaller footprint.
“There’s limited opportunity to build any more. This gives people a chance to disregard the total price for the completed penthouse and think differently. They’ll come in with an open mind and bring in their architect.
“I’m really excited. I don’t know where else you could do this.”
The International on Princes Street, in Auckland, is home NZ's most expensive apartment. Photo / Supplied
Milne said that upscale apartment buyers were now talking about right-sizing, not downsizing when selling up their big homes in Auckland suburbs like Remuera or Herne Bay.
They were more price savvy too, she said, understanding that selling the $15m home and moving into an apartment one third the size did not mean the price was going to be one-third.
“They're buying the best new construction, the highest specs, quality on a par with international standards and they understand that value.”
While New Zealand’s record apartment price, $15.5m paid in 2019 for the penthouse of The International in Princes Street, by Auckland University, still stands, asking prices for a couple of other penthouse projects in the city - the CAB on Aotea Square and 51 Albert on Albert Street – could challenge that.
The penthouse at 51 Albert could break price records. Photo / Supplied
And apartment prices on the edge of the CBD are climbing.
A boutique development of eight apartments at 87 Shelly Beach Road in St Mary’s Bay, which Milne is also marketing, has asking prices of between $7.4m and $11m, with three already sold.
“I'm not sure there is an upper ceiling for luxury apartments in New Zealand,” she said.
Daniel Horrobin, director of Ray White franchise City Realty Group, said that the top end of the apartment market had momentum.
“In the last two years boutique city fringe apartments have been selling for $8m, with some getting $31,000 per sqm. The top end will keep gaining momentum - people want the lock up and leave in the city and the bach in Omaha.
“Do I think $20m apartment is possible? Yes, absolutely. I don’t believe we’ve had one yet, but we’re seeing the buyer appetite. It will be the international CEOs coming home.”
Horrobin said that his agents were starting to field enquiries from Kiwis in Australia and the Middle East, including some interested in buying mid-market $2m apartments as sound investments once New Zealand’s borders open.
Apartments at 87 Shelly Beach Road, in St Marys Bay, are priced between $7.4m and $11m. Photo / Supplied
Horrobin said top apartments in both the CBD and inner-city suburbs were finished to similar high standards, so buyers were necessarily losing out if they opted for village life over spectacular views.
However, he is optimistic about luxury buyers coming to the city centre. “The CBD will get polished up, there’ll be more development in mid-town, we’ll see more retro-fitting of office buildings like on the K-Road ridge as commercial space is freed up,” he said.
Bayleys agent Trent Quinton, who specialises in boutique developments in Auckland’s eastern suburbs, is more sceptical.
“At that $8m to $10m price range, no one wants to be in the CBD,” he said.
“It’s been deserted since Covid and become a bit of a derelict place. People want to be in the fringe suburbs.”
And Quinton said the definition of fringe stretches as far away as new suburbs like Stonefields, 11km from the city.
“Auckland is totally different to Sydney. There’s not a downtown location like Circular Quay. The fringe of Kingsland, Mount Albert, beyond Remuera to Orakei, that’s where buyers want to be.”
