A penthouse apartment in Auckland's Remuera sold for a seven-figure loss in May, one of the biggest real estate tumbles of the last 12 months, and a sign of how tough the apartment market has been in 2024.
The vendors sold the three-bedroom, 272sqm two-level apartment at 460 Remuera Road for $5.5m - $1m less than they paid in 2018 and $1.5m below the 2021 CV.
The property had languished on the market for a year and a half before the sale and had cycled through several agents.
New Zealand Sotheby’s International Realty agent Jason Gaddes, who brokered the deal, told OneRoof that the sale price reflected the challenges in the prestige apartment market.
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“The apartment market has been slow-moving. A lot of these higher-end buyers are downsizing, but if the family home isn’t selling, it affects the apartment market,” he said, adding that the new developments coming on stream in and around Remuera and the eastern suburbs had impacted demand for second-hand apartments.
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Colleague Paul Sissons agreed that apartment buyers weren’t able to close deals because they were waiting for their big family homes, worth $3m to $5m, to sell. And for those bigger homes, buyers “are sitting on their hands”.
“It’s a trickle-down effect. Buyers have been thinking prices might still go down, a couple of hundred thousand dollars.”
He added that some buyers target the old apartment blocks, rather than new builds, because they have confidence in the longevity and quality of the building, like how much more spacious they are than new buildings, are run by well-managed body corporates, and have a real sense of community.
Sissons said sellers of older apartment blocks, such as one he has in Oakridge building at 205/10 Middleton Road, Remuera, were moving to go into retirement or care homes, which meant agents were pricing keenly to get the place sold.
“This one is priced at $2.16m, that’s $400,000 below CV. The owner bought in 2008, so can price competitively,” he said. “The next buyers are planning to be there 10 to 15 years, it’s not short term.”
An apartment in Oakridge building at 10 Middleton Road, Remuera, is asking $5.88m but agents say in a better market it could have fetched $1m more than that. Photo / Supplied
A renovated apartment in an older building on 118 Gladstone Road is likely to sell for around $18,000 per square metre – half the price of what brand-new buildings are asking. Photo / Supplied
Bayleys agent David Rainbow, who with Harry Cheng sold a higher floor apartment in the same Middleton Road complex under the hammer in October for $4.688m, is now marketing a 273sqm three-bedroom apartment on the seventh floor, which has an asking price of $5.88m (it has a CV of $5.3m).
“701 is 50% bigger than last year’s [higher floor] one, so based on that you would have expected $6.9m. We’re asking for a lot less,” he said.
“It’s no reflection on the apartment, people want to buy but they’ve got to sell their $9m or $10m house. And right now, I can count six or seven places on Remuera Road alone asking over $10m and none of them have sold.”
Ray White agent Ross Hawkins, who is marketing a 490sqm four-bedroom apartment in a 30-year-old building at 118 Gladstone Road, Parnell, said buyers know that these older apartments represent much better value than new or off-the-plan buildings but were reluctant to buy until they’ve sold their current home, so the whole market has tightened up.
He said developers with one or two apartments left in a newly finished block were prepared to cut prices so they could move onto new projects. “I just keep saying to people, ‘Now is the time to buy’,” he said.
OneRoof and its data partner Valocity identified the 10 biggest resale losses of the last 12 months. Just one other property resold for a bigger loss than 460 Remuera Road - a rundown cottage on a 1258sqm block on Tennyson Avenue, in Auckland's Takapuna. The property, which is zoned for terrace housing and apartments, sold for $3.74m in April - $1.01m lower than what it sold for in September 2022.
Many of the big loss-making properties had been bought at the height of the market by developers looking to use the land for townhouses. That market has suffered during the downturn, and higher interest rates and holding costs have forced many developers to reassess their plans and sell up.
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