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Auckland Apartment Report | September 2022

By Daniel Horrobin

Ray White Auckland Central’s strong auction clearance driven by the under $500,000 category

Ray White Auckland Central had another strong month for auction clearance rates in August, underlined by solid interest in the under-$500,000 apartment category. 

Director of City Realty Group, Daniel Horrobin, says: “The sub-$500,000 category is performing extremely well and there has been active bidding on every single property we’ve auctioned in this category. 

“This is Ray White Auckland Central’s fourth consecutive month of strong auction clearance results. Over the last three months our auction clearance rates have averaged 78.4% and year-to-date, from January to the end of August, they are sitting at 75.57%.”

“So our auctions continue to drive strong results.”

This interest in city apartments selling for less than $500,000 continues to be driven by investors. Around 57% of city apartment listings fall into the sub-$500,000 category, making it a key driver of the market.

These investors are motivated by expectations of significantly increasing demand for city apartment rentals, with the expectation that the number of international students will rise markedly.

Pre-covid, Auckland attracted about 52,000 international students a year but Covid and travel restrictions has seen that drop to about 12,000 international students this year. 

Daniel says: “We are expecting a large increase in their numbers in the first term of 2023, opening up a significant opportunity in Auckland’s city apartment market.”

In terms of city apartments in the $500,000-plus category there is also an increased level of interest, bringing in all categories of buyers including First Home Buyers. 

CoreLogic’s Buyer Classification data shows that the share of First Home Buyers across Auckland has increased from 25% in the first quarter of this year to 27% in the second quarter. However these buyers still face challenges in purchasing, with ability to get finance being key.

Meanwhile the city apartment rental market continues its upwards correction as we head into Spring. The average days rentals are on the market is sitting at approximately three weeks for Auckland, Waitakere and Manukau Cities, according to latest Trade Me Supply and Demand Reports.

The number of Trade Me rental searches Auckland-wide is up 6% from the previous month. 

This pick-up in the rental market has not yet driven a significant increase to rental prices but there is anticipation that rents will increase further as we advance towards the end of the year.

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