The very top end of the apartment market has stalled, says Bayleys' apartment expert Suzie Wigglesworth, but the next level down is moving well.
"The top, top end would be those properties that are circa $15 million-plus type scenario, so you're talking about your big penthouse-type properties which typically would be potentially attractive to somebody from offshore."
A case in point is the penthouse in the CAB apartment building (the former council building) in Auckland's CBD which Wigglesworth had sold for between $15m and $20m, but that deal fell over and the penthouse is still on the market.
Some apartment buildings, like the CAB and the Pacifica residential tower in downtown Auckland, are exempt from the foreign buyer ban, but even so over the Covid years overseas buyers have not been as active.
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Wigglesworth couldn't say much about the CAB penthouse deal, other than the would-be buyer was from the Asia Pacific region.
The low inquiry levels on those "top, top end" properties may start to shift, however, when the borders fully reopen and there are more aeroplanes in the sky, Wigglesworth says.
Over in Milford, Bayleys is selling the Omana North development which has a number of $4m and $5m-plus residences in the top levels, but sales in that part of the development are also slow, she says.
“However, the midpoint of that building is performing really well, so that would be $2.5m up to $3m.
Mid-range apartments in the Omana North development in Milford, on the North Shore, are selling well. Photo / Supplied
"That's the classic empty nester/downsizer; lots of equity in their current home and they've made a decision to move to apartment living for whatever reason and they don't need to go to the bank at all so that whole situation with the finance world is not affecting demand - they are still moving on with their decisions."
Across at Jimmys Point, in Hobsonville, there is good interest for apartments above the $1.5m mark, but less so for lower value apartment stock where the tougher lending rules under the CCCFA, along with higher interest rates and inflation, are biting first home buyers and young professionals.
There is an element of fatigue in this market, she says.
"I think they are just scared. They've gone to the bank and got knocked back and they don't want to try again sort of thing."
This segment of the market is also possibly a little down and out after missing out so much at hot auction rooms last year: "I think that market is a little deflated with everything being thrown at them.”
Those who have missed out on houses could relook at whether the quarter acre dream is within reach and instead turn to apartments with Wigglesworth saying the CBD has a lot of stock first home buyers could possibly get into.
The problem is, the CBD has not been that attractive in the Covid years and needs urban planning to help regenerate it.
"It's like a ghost town in here at the moment. I think if we could invigorate some life into some of these areas that had been decimated from Covid, and I guess the urban sprawl, perhaps we could attract people back into that type of property in the future.”
An artist’s impression of one of the apartments in Album, in Parnell. Photo / Supplied
In the CBD fringe, Louise De Martin from Ray White Eden Terrace is seeing strong interest in a new boutique apartment block called Album to be built in Garfield Street in Parnell after Covid interrupted the original intent for the site, says De Martin.
The developer, Barbara McKain, purchased the site around 10 years ago to create a boutique hotel, but when Covid saw international travel come to a standstill she had to pivot.
Now, a high-end boutique apartment block will rise instead with an emphasis on quality and sustainability.
The building, designed by Patterson Associates , will have a pure white oxide concrete exterior which is virtually maintenance-free.
"It almost like whitens off itself rather than having to maintain it in any way and that was part of her sustainable vision."
The vision is to "create basically an artwork" in Parnell, she says, and the building has gone through the consent process and is tracking towards construction.
With funding secured, pre-sales are being sought for the penthouse and sub penthouse apartments at $4.5m.
These apartments take up a floor each, but lower levels can be configured differently, and that will appeal to people perhaps impacted by the credit crunch, says De Martin.
The flexibility means they can choose to create the space perhaps as a dual key apartment.
With banks restricting lending on apartments according to square meterage, that could be a useful tool for buyers.
New Zealand Sotheby’s International Realty agent Pene Milne says interest in the Pacifica penthouse listing has been strong since it relaunched. Photo / Fiona Goodall
"At the moment the studios are 34sq m plus an 8sq m balcony. There is that restriction around those studios so we looked to try and pivot from that point and use the dual key proposition - maybe an investor looking for a home and income could have one unit they reside in and have the other one to rent out, or it could be a home with a business proposition in the other side.
“The combined square meterage then becomes 71, plus an 8sq m balcony, so for bank lending it becomes more viable and then there's also the income they might be able to get from the other studio."
Over at the Pacifica, New Zealand Sotheby’s International Realty agent Pene Milne is selling what was the super-penthouse of the country's tallest apartment tower, which had been on the market for some time with a price tag of $42.8m.
Instead, the super-penthouse is now being marketed as with options – someone could still buy the entire 1,220sq m floor plan, or it can be purchased as three smaller apartments.
Interest levels have been strong since the relaunch of the marketing campaign last month, Milne says.
"The interest has been very good and that's both local and offshore interest, and the breadth of that interest has come because it's now available as a number of options, not just one.
"People are definitely interested in the option of being able to bring their own architect to a smaller space and create what they want but there's also interest both locally and internationally in the whole space as well."
That ability to create exactly what they want is unique, she says:
"When you buy off the plans you can never start from scratch like that with a shell space and create exactly what you want; that's a really special feature."
Because there are now so many options, from buying as a shell space to buying as a finished product, Milne couldn't give a price indication around potential sales, but says the deadline for tenders is March 23.
She says there is a lot of interest in the high end apartment market, saying Shelly Beach Residences in St Mary's Bay have been selling well.
Those apartments range from $7.4m to $11m and are attractive to buyers for a number of reasons, including the completion date which is still two years away.
"For a lot of people two years out is perfect timing. People are definitely focused on the right lifestyle, not necessarily whether it's an increase or downsize."
Milne talks about "rightsizing" as opposed to downsizing, saying for these buyers it's more about what lifestyle they want at their stage of life and less about the value point.
