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Auckland Apartment Report – March 2023

By Daniel Horrobin

Auckland central apartment market marching to the beat of its own drum

The Auckland central apartment market continues to march to the beat of its own drum, not experiencing anything like the year-on-year sales volume drop-off traditional stand-alone homes have experienced in the last year.

Discussing Auckland central apartment market results for February 2023, Director of City Realty Group Daniel Horrobin says: “We’re in our own little niche, largely driven by encouraging investor activity. There continues to be signs of confidence in the opportunities available in the apartment market, helped along by many sellers being willing to meet the market in term of pricing.”

Values have come back slightly, so that they align with net return expectations amongst investors who make up about 70 per cent of city apartment buyers.

“Investors are very active in this market and they are currently buying.”

The fact that the Governor of the Reserve Bank, Adrian Orr, raised the official cash rate again last month by 50 basis points to 4.75 per cent hasn’t had much effect on apartment investors. “That’s because these investors are typically playing with equity or they are cashed up.”

Daniel says they’re still seeing a bit of first home buyer activity in the city apartment market, with the ability to buy a two-bedroom central apartment with a carpark for $500,000 being much more affordable than alternatives. There continue to also be owner-occupiers drawn to the high end of the city apartment market for lifestyle reasons, such as downsizers wanting to embrace waterfront living.

He says interest in city apartments has grown with the perception that the central city is bouncing back after Covid and has got its spark back, with more activities on and more tourists visiting.

Meanwhile the Auckland central apartment rental market has well and truly bounced back to pre-Covid demand. The number of city apartments advertised to rent has dropped sharply over the last eight weeks, with February being the month most tertiary institutions such as Auckland University re-start for the year. Available central apartment listings on Trademe have dropped from numbers in the early to mid-600s to the early 300s.

“This increase in demand is due to an influx of international students coming into the city and also more people looking for temporary and permanent accommodation due the recent flooding in Auckland.” This has caused the drastic drop in the number of rental properties available, which in turn is driving rents up.

“We’re seeing high attendance at viewings for apartment open homes – in some cases more than 100 people turning up to a single viewing.”

Buyers or sellers wanting to understand the specifics of the Auckland city apartment market in more detail are able to draw on the expertise of Ray White City Group’s licensed agents.

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