New figures released to OneRoof show a strong, affordable apartments market up and down the country.
With some exceptions in million dollar suburbs like Remuera, in Auckland, median apartment prices in the 12 months to September ranged between $437,500 in Canterbury to $639,000 in the Bay of Plenty, according to the REINZ data.
Bindi Norwell, REINZ chief executive says: “Over the past few years New Zealanders have been embracing apartment living more and more as they realise in some cases that the benefits of not having a backyard can outweigh the weekends spent mowing lawns, weeding or undertaking maintenance of a property. This is particularly now that we’re seeing more design led apartments that are tailored for different market segments.
The Auckland region’s median price was $585,000.
Start your property search
“As a general rule, apartments tend to be cheaper than stand-alone houses, which provides for more affordable options for first time buyers. For example, in Auckland for the 12 months ending September 2019 the median price of apartments was $585,000 versus $885,000 for a stand-alone property,” says Norwell.
Pete Evans, from Colliers International, says the data clearly shows the lower end of the market is doing the best.
“What stands out is the apartments have performed well, very well, because they’re more affordable - that’s the bottom line.
“That’s what has performed best over the last 12 months and probably will for the next 12 months at least.”
It was only to be expected that suburbs like Remuera saw a much higher median price of around $1.4m, but compared to the multimillions spent on standalone housing in Remuera the apartment price might reflect people wanting to stay in the area but opting for a more affordable product says Evans.
Norwell adds that this uplift at the luxury end of the market shows that product is meeting the demands of high end buyers with architectural design, high end fixtures and fittings, lots of natural light and amazing views.
She also points out that in Auckland apartments close to city not only have proximity to entertainment, shopping and transport, but also are often in excellent school zones, such as Grafton being in zone for Auckland Grammar School.
Evans says that a lot of the buyers in the median apartments price range would be first home buyers who are the most active part of the market.
“Can that product get any cheaper? To a degree not if there’s a demand for it.”
Percentage increases in prices over the past 12 months ranged from 3.5 per cent for Auckland to 25 per cent for Canterbury, which showed there was a big demand in the affordable apartment market.
The percentage growth in Auckland was lower because the Auckland market had been cooling across the board for the last 12 months.
“That hasn’t meant price drop, it just hasn’t meant price growth as much as other areas,” Evans says.
That might start to change with more investors returning to the market, because investors also buy affordable properties.
Price growth at the lower end of the market would likely, therefore, continue over the next 12 months.
Evans puts much of the growth in the regions down to people from outside the area wanting to buy because prices were cheaper and the time to buy was right with the current low interest rates.
The regions are “followers”, however, he says.
“Auckland will be the first to pick up; they’re still in the lag effect of Auckland from two years ago.”
Evans predicts Auckland will pick up in 2021 and that will be the start of the next property cycle.
Reflected in the REINZ figures will be apartments bought off the plans from a few years ago which are now settling, but yet to be reflected are developments such as Ockham’s new 10-storey apartment building The Greenhouse in Grey Lynn/Ponsonby where one bed apartment are asking $845,000 and a two bed, two bathroom one looking for $1.975m.
Other city fringe areas, such as Mt Wellington, are seeing growth because they are affordable with good amenities. REINZ figures showed Takapuna and Mt Wellington had the biggest median price lift with 33.6 percent and 331.5 percent growth respectively.
Stonefields, a new neighbourhood in Mt Wellington, for example, is outperforming its neighbours like St Johns, says Evans.
“Its growth was 460 per cent over a 10 year period, compared to adjoining suburbs of 380 per cent.”
At the other end of the country, young people and first home buyers are also embracing apartments.
In Canterbury, prices increased by 25 per cent in the 12 months to September, from $350,000 to $437,000.
Christchurch Bayleys agent Julia Ashmore-Smith, says the city has way more apartments than before the earthquakes.
“Christchurch, for the first time in a very long time, people have got an opportunity to have brand new and that’s been very exciting.
‘”You know, in well-established areas all of a sudden you can buy a brand new with all the whistles and bells so it’s really altered the thinking of the property market in Christchurch.”
A lot of buyers are first home buyers who prefer buying new and shiny rather than having to buy something old and renovating, she says.
