For cash buyers with $100,000 to spend there are options out there, ranging from apartments in Auckland CBD to do-up villas on the West Coast.
Agents have reported a recent uptick in sales at the bottom end of Auckland’s apartment market, with investors returning in force to pick up studios for as little as $80,000.
And property values in the West Coast are up 7% over the quarter, fuelled by the region’s affordable prices.
But for some agents, the best investment isn’t an apartment or a house, it’s a car park.
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In Auckland, buyers are being offered a car park in one of the city’s best known buildings for $82,000 – about the price as a four-bedroom house in Greymouth.
The car park, at 23 Hobson Street, is no-brainer investment opportunity, said listing agent Henri Smith, from the Apartment Specialists. In his listing he noted: “The council has put restrictions on new builds, which leads to Auckland apartment complexes with 250 apartments and 20 car parks. Do the maths.”
Roger Seavill, manager of special projects at Colliers International, is also a fan of car parks. He’s nicknamed the “car park king”, having sold hundreds of them in his career, many more than once.
“If you’ve got a tenant, it’s pretty easy,” he told OneRoof. In his opinion, an Auckland car park is a better buy than a do-up on the West Coast “because, without being cheeky, you couldn’t park your car in it [a West Coast home] and walk to the office”.
What’s more, car park buyers don’t have to do much in the way of maintenance. Car parks aren’t subject to Healthy Homes standards and car park tenants don’t phone up in the middle of the night to tell you that the toilet is leaking.
A car parking in The Pacifica tower, in Central Auckland, sold for a record-breaking $288,000 in 2021. Photo / Alex Robertson
Higher interest rates have dented the market somewhat, putting pressure on profits. “It has changed the dynamics. It’s not rocket science,” Seavill said.
Not all car parks are equal and prices often have no connection to the return on investment. Car park owners sometimes can’t see why their listing doesn’t sell for more, Seavill said. They may see another car park sell for $150,000 and not understand why their car park can’t get that price. “Sometimes there are rogue results,” he said.
Seavill has sold spots for as much as $190,000 and as low as $25,000. One recent sale in Auckland’s Newmarket was for $25,000. “It’s supply and demand. It had proper advertising and signage in the car park. And that’s what it went for. I thought that was a bargain because it’s in the heart of Broadway,” Seavill said.
Central Auckland car parks generally rent from $55 to $140 a week on a lease. A covered car park space in the Farmers car park is currently for lease at $60 plus GST a week and a Commerce Street car park space for $135 plus GST a week.
Commerce Street car parks sell for reasonably high prices because apartment owners in the neighbouring The Pacifica building are willing to pay good money for them, said Seavill. “You might have someone that [owns] a $3 million penthouse who has two car parks and they want three. So, if they get one across the road, they’re not going to quibble with what they pay for it.”
The highest price ever for a standalone Auckland car park is $288,000. It was for a space in The Pacifica building.
Buyers have to do their due diligence as they would with any other property purchase. The car park may come with a body corporate and if it’s part of a leaky building or one needing other remediation the car park owners will typically have to pay for a share of that work, which could be more than the entire cost of an apartment.
This four-bedroom home at 102 Alexander Street, in Greymouth, is priced to sell at $85,000. Photo / Supplied
What’s more, the long-term viability of a car park could be affected by issues such as congestion parking, and increasing numbers of people working from home, to avoid things like expensive parking.
On the other hand a four-bedroom home, such as the one for sale for $85,000 at 102 Alexander Street, in Greymouth, could be turned into a money machine, once brought up to Healthy Homes standards.
Like many bargain-basement homes in the region, the Alexander Street home sits on leasehold land. The lease costs $1908 a year, which has to be added to mortgage repayments and other costs when doing the maths on the investment.
Rents in Greymouth are usually in the $400 a week price range, although a fully-furnished, four-bedroom home targeted at groups of contractors was listed for rent at $720 a week.
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