Apartment Specialists Predictions for the Auckland Apartment Market in 2015 -
predictions for the auckland apartment market in 2015

Predictions for the Auckland Apartment Market in 2015

These are my market predictions for the 5 main apartment categories for the rest of 2015 and going into 2016.

Fringe Owner-Occupier [su_button url=”” target=”blank” style=”flat” background=”#42a648″ size=”6″ center=”yes” icon=”icon: long-arrow-up”]25%[/su_button]

  • Comments: This market I see really moving. Especially your two bedroom with a car park. These are apartments above 50 square meters. That market I see moving around about 25% in the next 18 months.
  • Why? Because house prices will increase. But also because they are selling below the cost to build and a lot lower than in the CBD.

Central City Owner-Occupier [su_button url=”” target=”blank” style=”flat” background=”#42a648″ size=”6″ center=”yes” icon=”icon: long-arrow-up”]20%[/su_button]

  • Comments: people in the city accept smaller sizes so this is one bedroom, 40 square meters above and two bedrooms, 50 square meters above. Obviously, the bigger, the better with a car park not being a necessity.
  • Why? This has been fuelled by the same driver, being obviously bank lending. The bank being favourable as well as the housing market pushing, almost forcing people into apartment living.

Investor [su_button url=”” target=”blank” style=”flat” background=”#42a648″ size=”6″ center=”yes” icon=”icon: long-arrow-up”]5-7%[/su_button]

  • Comments: These are apartments below 40 square meters.
  • Why? It’s being held back by the numbers which is your rent and your expenses. I do see rents going up but I also see expenses going up.

Leasehold[su_button url=”” target=”blank” style=”flat” background=”#42a648″ size=”6″ center=”yes” icon=”icon: long-arrow-up”]10%[/su_button]

  • Comments:  This is very interesting. You’ve got a specific type of buyer for this market. The leasehold market I do see moving 10% but this is your favourable leasehold. This is the leasehold where if you bought it for the same property freehold you’d be looking at least double or triple the price. When you’re dealing with that kind of property, it’s about opportunity cost.
  • Why? As the freehold market moves upwards, the attractiveness of your leasehold market moves upwards as well.

High-End[su_button url=”” target=”blank” style=”flat” background=”#42a648″ size=”6″ center=”yes” icon=”icon: long-arrow-up”]10%[/su_button]

  • Comments:  These are your apartments 90 – 100 square meters or above. Generally, two car parks in good locations and in great buildings. Aucklanders are still getting used to living in apartments and yes, the demographic that can’t afford houses as much, are getting pushed into apartments but the high-end apartments are still waiting to go.
  • Why? Aucklanders haven’t got ready, or haven’t got used to living in apartments yet. They will, but– this year I see the high-end market moving 10%. But the big movement for the high-end or the largest stock really coming in a few years time.

 

Transcript

Good day, Andrew Murray here from the apartment specialists with your Auckland apartment market prediction for 2015 leading into 2016. This is for the 18,000 apartments approximately in the CBD and another seven to eight thousand apartments on your fringes. These are the suburbs surrounding the Auckland CBD area, Auckland central.

It’s very positive. Overall, I see this market moving less than 15% in the next 18 months. Yet, some categories are only seen moving – will remain quite flat, moving maybe round about 5% and other categories moving at round about 25%. So it’s really important that you understand the categories and what’s moved.
The categories are, there are five main categories of apartments in Auckland and you’ve got your fringe owner-occupier. This market I see really moving. Especially your two bedroom with a car market where– so these are apartments above 50 square meters. That market I see moving up to around about 25% in the next 18 months. Why? Obviously, because of the housing prices will increase. But also because they are selling below the cost to build and way below like a lot lower than in the CBD.
Number two is your central city owner-occupier market. So people in the city accept smaller sizes so this is one bedroom, 40 square meters above and two bedrooms, 50 square meters above. Obviously, the bigger, the better with a car park not being a necessity. This has been fueled by the same driver. Basically being obviously bank lending, the bank being favorable as well as the housing market pushing, almost forcing people into apartment living.
Number three is the investor market. So these are apartments below 40 square meters. I only see this moving by about 5% and this is being held back by– [?] you’re only going to get about 50% so it’s being held back by the numbers which is your rent and your expenses and now, I do see rents going up but I also see expenses going up and so that’s the major increase in this area so 5% to 7% over the next sort of year or so.
Then you’ve got your leasehold market. This is very interesting. You’ve got a specific type of buyer for this market. The leasehold market I do see moving 10% but this is your favorable leasehold. This is the leasehold where if you bought it for the same property freehold you’d be looking at least double or triple the price. When you’re dealing with that kind of property, it’s about opportunity cost. So as the freehold market moves upwards, the attractiveness of your leasehold market moves upwards as well.
You’ve got your high-end markets. These are your apartments 90 – 100 square meters or above. Generally, two car parks in good locations, [?] in great buildings. Aucklanders are still getting used to living in apartments and yes, the demographic can’t afford houses as much, are getting pushed into apartments but the high-end apartments are still waiting to go. Aucklanders haven’t got ready, or haven’t got used to living in apartments yet. They will, but– this year I see the high-end market moving 10%. But the big market for the high-end or the largest stock really coming in a few years time.
Thank you for listening to my apartment predictions for the Auckland apartment market. In the next– I’ll be revealing this every six months and showing you how this all goes. Hope you found this informative and talk soon. Cheers.