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Lock-down lows lift as level 3 promises perkier Auckland apartment market

By Daniel Horrobin

Despite the slower pace we’ve experienced over the last month or so, New Zealand’s recent move to level three and the increase in activity that it brings has proven that bricks and mortar are still a popular, safe and secure investment option for Kiwis.

While it is still early days and we’re yet to see exactly how the market will respond post lock-down, the signs are positive with a real willingness from both buyers and sellers wanting to transact.

As a result, listing numbers have picked up and we’re getting a lot of buyer registrations, with many of our team reaching their daily targets before the week is out.

Also, the recent lift in LVR restrictions combined with historically low interest rates and net returns of more than 10% in some cases means we can expect a strong resurgence of investors, who make up a significant portion of the Auckland apartment market.

At the other end of the spectrum, we have some of the most affordable entry-level properties available for first home buyers – another area that’s showing encouraging signs as many maximise the current opportunities to get their foot on the property ladder.

All in all, despite the uncertainty that’s still in the air, confidence is returning. Buyers are leveraging current lending incentives and apartment owners are wanting to sell to beat the much-anticipated rush of new listings, which is yet to come.

As experts in Auckland’s apartment market, we can help you make the right move at the right time, whether you’re buying, selling, or investing. So get in touch with our team today.

Predictions for NZ’s post-Covid-19 property market –

Hot investor markets at risk: Kiernan expects the demand for investor properties to be on the soft side due to uncertainty. Out of town investors may be waiting out for 18 to 24 months until they score bargains, he says. 

“There’s a growing expectation among people that prices will be coming down and as an investor that’s how you make a big chunk of the money – through capital gain and you don’t want to expose yourself to price falls there.”

Wilson says investors will shift to areas with better longer-term return on rentals and employment opportunities, which is typically urban centres of New Zealand. The value figures coupled with historical data and economic insights suggest certain locations and property types will be better placed to weather the crisis than others. Here are some predictions.

Variety will save Auckland: While Auckland doesn’t have as much public sector presence as the capital it does have by virtue of being New Zealand’s biggest city more employment opportunities.The city’s housing market will be challenged but because it isn’t wholly dependent on tourism or other at-risk sectors, it won’t see huge price swings. 

Wilson says Auckland isn’t just one housing market either, which has the biggest suburb variety and they each will handle the effects of Covid-19 differently. “There are a lot of jobs in the CBD, South Auckland, Manukau and they’ll perform well,” he says.

Leafy suburbs are the ones to watch: Kiernan says people who can afford properties in prestige neighbourhoods are less sensitive to an economic crisis.“If you are a Kiwi earning overseas, New Zealand now looks like a good place to be. I can understand how demand for prestige homes continues, not indefinitely, but for the next six month or so.” 

Properties in Auckland’s Double Grammar Zone suburbs, such as Remuera, Epsom and Mt Eden, will also be more resilient to the crisis, Kiernan says. 

“They won’t be unaffected, but it might just take longer for the downturn to come through.”

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