Savvy purchasers can still find exciting new prospects with excellent returns –in Auckland’s booming apartment market.
Investors who have been blindsided by the Labour Government’s recent announcement outlining their intention to extend the bright-line test from five to ten years and remove a landlord’s ability to offset interest expenses against the income generated by a rental property, need not panic, according to Simon Taylor, a director at developers, Safari Group.
He says that the government’s stated intention is to free up houses for first home buyers who are currently experiencing difficulties getting into the market, and to dampen house price growth.
While this is bad news for many landlords who have saved up to purchase an investment property, then invested further to ensure their rental meets the Healthy Homes legislation, Taylor believes that there are silver linings for more business-based investors – especially since the bright-line test on new-builds will remain at five years and the interest write-off looks set to remain status quo, as the government attempts to increase housing stock.
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“The new initiative will certainly cause many mid-range investors pain, as they are hit by rising tax bills, and may be forced to sell their properties and rethink their investment strategy,” he says.
“But on the other hand, the typically cashflow-friendlier rental apartment offering will become more and more attractive, with buying off the plans making a lot of sense to a much broader market since the announcement.”
Founded in the mid-1990s, Safari Group has established itself as a successful investor-focused development company, with over 2000 high-quality units completed to date.
Taylor says that New Zealanders have been slow to embrace apartment living, which is the predominant way of life in many other countries, especially in large urban cities, but now, many kiwis simply don’t expect to buy a home of their own and they appreciate the flexibility which comes with renting a property – especially if it is in a safe and secure, well-positioned development.
Taylor says that one of the group’s current projects, The Residences at Auckland’s Central Park fits this bill and, offers investors a very attractive package in Ellerslie, close to the motorway and public transport that is sure to attract good tenants.
“The train station is five minutes’ walk away and residents can be in Newmarket in eight minutes, or in downtown Auckland in just fifteen minutes.”
Central Park is also within easy reach of Ellerslie Village, a vibrant street filled with cafes, bars and boutiques. Sylvia Park is nearby, along with Ellerslie Racecourse, Cornwall Park and Epsom Showgrounds.
Taylor says that bringing a real sense of community to their investor-focused developments is a crucial factor in the planning and design phase.
“Here, we’ll have a large rooftop garden, perfect for Friday drinks, birthday gatherings or a BBQ, plus a gym, and a café on the ground floor.”
The Central Park precinct (the site of The Residences), is being reimagined into a comprehensive mixed-use community, through the addition of food offerings and green areas for locals to mix and mingle, which in turn provides further amenity to residents.
The Residences at Central Park, Ellerslie
Simon Taylor says that Safari Group is committed to being amongst the country’s most respected and innovative developers. “We adhere firmly to our core values, because they cement who we are as a company.”
To incentivise potential investors, in an innovative move, Safari Group is offering eligible and wholesale investors a 2% interest rate on their 10% or 20% deposits all the way through to construction completion, with that interest credited to the buyer upon settlement.
“It means they’ll do better than if they leave money in a bank, and with construction underway and tracking towards a mid-2023 completion, our purchasers lock in today’s values and get all the benefits of capital growth before settlement as well as beyond settlement”.
High studs and huge windows allow light to flood in, and the materials have been carefully chosen for sustainability and the appliances (oven, cooktop and dishwasher), along with the fixtures and furnishings are all high-quality. Heat pumps keep the units warm in winter and cool in summer.
He says that in keeping with their ethics, and to ensure long-term quality and value, Safari Group will own and operate the LQ Hotel, which forms part of the development. This keeps them vested long-term in their projects.
“For us, it’s so much time, effort and enjoyment that we don’t like to build something, and then wholly walk away from it.”
Apartments at The Residences are a mix of studio, one bedroom, two-bedroom and dual-key units carefully designed for easy usability and efficient liveability.
Studio apartments are priced from $425,000 and one-bedroom units from $595,000 while two-bedroom homes start at $845,000 and dual-keys from $915,000. The studios have an estimated annual rental of $26,520 and rent for versatile dual-key apartments (two separate, self-contained units on one title) has been estimated as $57,200 per annum.
Most of the units come with car parks and additional car parks available for purchase.
In another innovative move, the onsite sales suite offers interested parties a virtual reality experience showcasing the cool contemporary apartment interiors, created by Outline Design and inspired by the colours and textures of nature.
Safari Group is holding an event to promote The Residences on April 22, with Independent Economist and Speaker, Tony Alexander, who will be talking about the recent changes in the legislation and how they may impact investors. You are invited to book today at: eventfinda.co.nz/2021/vip-investors-night/auckland
For more information, please phone 0800 790 790.
sales@safarigroup.co.nz