auckland apartment sales Archives - Apartment Specialists

Tag: auckland apartment sales

i worry about tax

There are commonly 3 taxes which can be charged when property is bought or sold.

These are:

  • Goods & Services Tax (GST)
  • Capital Gains Tax (CGT)
  • Stamp Duty

There is no Stamp Duty in NZ (but it is charged in Australia).

CGT only applies if you bought after November 2015 and sell within 2 years.

GST applies when an apartment is on a commercial lease.

Summary:

When selling your apartment, it is important to know what taxes you may or may not have to pay as this effects the outcome.

There are three main taxes involved when selling your property/apartment in Australasia but not all or any will apply to you necessarily.

New Zealand is a great place for property as the taxes charged are lower than any other first world country.

There is no Stamp Duty which is a tax charged on purchasing a property in Australia or the UK.

Capital Gains Tax only applies to you if you bought after November 2015 and sell within 2 years.

However, the one tax to look out for which many owners forget or are unaware of is GST.

Goods & Services Tax or more commonly known as GST applies to you if the apartment is bought with the intention to be used for what is called a taxable supply.

I.e. for a commercial capacity.

For example, a guaranteed rental, commercial lease or an apartment in a hotel lease.

The important thing here is if your apartment was intended to be used as a taxable supply make sure you talk to your accountant, as there is a good chance that when your sell your apartment a 15% tax will be applied or passed onto the next purchaser both effectively reducing what you are left with.

As an owner, you might be wondering what YOU need to do, or help with, in the process of selling your apartment. After you choose the agent that you feel will best represent you and get a good price for your apartment in the time frame you need, what else needs to be done on your part?

Surprisingly little. We do the leg work for you. From the time you sign the listing agreement to the time your apartment goes on the market and we start getting offers, we are there for every single step of the process. And, we’ll keep you up to date on each step, too.

Summary:

As an owner you have to find an agent that best suits you and your needs when selling your apartment.

Finding an agent and building a relationship and setting expectations that both parties are happy with is the first and most important aspect of selling your apartment.

Once you have found an agency the rest is fairly simple. You will need to sign a listing agreement and as this is a legally binding document we suggest you get a lawyer to look over this for you. The difference with Apartment Specialists is that we don’t lock you in. You are in control.

The agent will advise you with all the details of the campaign, marketing, the current market and so on.

The final step is making sure you are kept up to date – setting these expectations and how much involvement you would like is up to you and we tailor these to suit you as an individual.

What a Sole Agency Agreement can mean for you.

What happens with you sign a sole agency agreement with an agency? Here are 3 examples from owners that we worked with who wanted to sell their apartment. Unfortunately the agencies with whom they signed just didn’t deliver at all or in a timely manner and this is due to the sole agency agreement in their contract.

Summary:

Signing and selling my apartment with a sole agency agreement and what that means for me. This is important to understand as a Sole Agency agreement is legally binding. At Apartment Specialists we don’t lock you in.

It is important to understand and know your rights as an owner when selling your apartment and what it means when signing a Sole Agency Agreement.

This is because it is a legally binding document and sometimes owners don’t realise this and what implications this may have.

The most common clause in an agreement is signing with an agency and being locked into 90 days with the agency. This means if you are not happy or you feel the agent is not working for you, you can’t change until that time period is up.

We trust in that if the service is good why would you want to leave.

The choice should be yours.

In any other industry this would not be accepted, so why real estate?

How much commission is charged when selling an apartment in Auckland? You should know what you are going to be left with after all the costs.

You also should know what’s most important to you, as an owner, to look for in an agent. We’ll bet it’s that they’ll maximise the amount of money you’ll be putting in your pocket. Just because the commission costs are higher it doesn’t mean you’ll be getting less when your apartment sells!

Get insight on what real estate agents in Auckland charge for commission and why, sometimes, it’s better to pay a little more commission to get a lot more value.

SUMMARY:

The commission charged when selling your apartment vary depending on your apartments value. You are charged 4% for a value up to $500,00, 2% for a value up to $1,000,000 and 1% upwards from $1,000,000 plus GST.

It is not always about the sales price you can achieve but rather you want to know how much you are going to be charged in commission and what you are going to left with after the sale has gone through.

Usually you will be charged around 4% for a property with a value up to 500,000. 2% for a property up to a $1,000,000 and 1% for properties sold for more than $1,000,000. This is plus GST unless you living outside of New Zealand and can prove your residency, then you won’t be charged GST.

There is however a minimum cost you will be charged and this applies to properties worth 3,000,000 and under.

These can vary across agencies and Apartment Specialists we charge $11,500 plus GST

When you sell a property below 300,000 there is a minimum fee, at Apartment Specialists ours is 11,000 plus GST (This is subject to change without notice).

However, it is more than just what your commission costs are going to be – you want to ensure the agent you have chosen is going to get the best possible deal for you. Asking your agent for their recent sales and what records prices they have achieved is a good idea to inform you with what price you may get.

We have an advantage in the apartment industry to help you realise your apartments worth as there are so many like for likes, for example the same apartment that has been sold in the building with the same specs and so on.

This is probably one of the first questions you ask yourself when you make the decision to sell. You want to know how long it can be until you make the sale to have the money to do what you need to do.

In this quick video, find out what the average rate is for selling freehold, leasehold, and high-end apartments.

SUMMARY:

On average freehold apartments take 30 days to sell and 3 weeks to settle. Leasehold usually takes double that time.

Planning on how long this process will take is an important aspect to consider when selling your property. We can’t say exactly but we can estimate due to averages that a freehold property takes around 30 days to sell including the campaign and then another 3 weeks to settle from there.

Leasehold properties are different, and typically take double the time to sell (around 60 days) but the same time for settlement, 3 weeks.

Bearing in mind that if your property is tenanted (Periodic) in both situations you are legally obligated to give them 42 days notice in writing if a purchaser prefers vacant possession.

When to sell, when not to sell.

If you’re looking to sell your apartment in Auckland, although there’s no real ‘right’ time there is definitely a period you want to avoid which. If you sell during this time, it can cost you anywhere from $20,000-$50,000.

In this quick video, Andrew Murray at Apartment Specialists tells us exactly when to avoid a campaign to sell your apartment and why! Listen in to find out when the sweet spot is to get your apartment on the market. Apartment Specialists knows… that’s why we’re the specialists.

SUMMARY:

Apartments are different to houses and can be sold most times of the year, we recommend the only time you avoid is December through to early January.

Selling at the wrong time can end up costing you more than you may have anticipated. However, apartments are very different to houses and most of the year is a good time.

However, the only time to avoid would be the December, early January period – the holiday period, this is due to a lot of events happening in people’s lives, end of deadlines, holidays, family commitments and so on.

Apartment Specialists Podcast No: 79

Summary:

Selling an Auckland apartment under a lease or hotel lease is relatively worthless, but there are situations when you really need to sell your apartment. In this podcast, Andrew Murray will show you the steps that you need to take when you plan to sell an apartment that is still in a lease. Get all the facts and more from this podcast.

TRANSCRIPTION:

Good day, Andrew Murray from Apartment Specialists. Today we’re talking about Auckland apartment sales and specifically, what happens if you can’t get your Auckland apartment out of its lease or its hotel lease. How do you sell it? We all know if an apartment is in a hotel lease, it’s worthless. But let’s face it, there are situations where you have to sell your apartment. If you have to sell it, well, because it’s in a lease and you can’t get it out, you can’t change that, so what do you do? The problem is, apartments are worth less when you sell them in a lease compared to when you’re out.

The reason why is, you can’t sell it to an owner-occupier, so that’s an emotional purchase, so, a person can fall in love with the apartment and pay more. Or, when it’s in a lease and then in every case I’ve come across, you receive less income than you are if you were renting it to a student, a family, or a professional, so it’s worth less again. So, if you have to sell your apartment and it is in a lease, there’s a way you can do it to get as close as you can to that value of what it would be worth if it was out of the lease. And you’re selling it as a long term investment. What you’re doing is, you’re selling it at the lowest return possible.

Whatever the mortgage rate is at the time, you’re selling it at that basically or less. So basically the new purchaser will just be having that as a.., but knowing in the long term there will be a little bit of capital gain when it comes out. So you’re raising that bar as much as you can. You have to realise if you are an owner, sorry, you need to do your very best to get it out of that lease, and if you can’t, you’re going to have to accept it that your apartment is worth less, and it’s minimising that loss as much as you can. So you can upsell it, and you can get very close, but unfortunately there’s not much you can do to get the true value unless you can get it out.

I can talk with anybody specifically on their apartment if they’re in that situation, on how you can get as close as you can possible, or how there are different ways you can get out of leases. Sometimes there’s some technicalities, that means you can get out. I’m happy to read through your original apartment lease for you if needed. I hope that gives you a bit of an idea, and I look forward to talking to you next week.

Cheers!

selling auckland apartments

Apartment Specialists Podcast No: 63

Summary:

When is the hot season for selling Auckland apartments? The hottest time to sell your apartment depends on the type of apartment you have. Whether the apartment is purely for investment or whether it is an owner-occupier. This podcast explains the difference and tells you when is the best time to sell.

TRANSCRIPTION:

Good day my name is Andrew Murray from the Apartment Specialists. Today I’m talking to you about, ‘When is the best time to sell your apartment?’ Now this is an interesting question that I get asked all the time, and it actually depends on what type of apartment you have. There really are two categories: Is it an investment apartment? Or is it an owner-occupier?

What I mean by investment is “Are you relying on the rental income? Is it going to be rented out?”. When it’s an owner occupier, “Is the best buyer or the buyer you want to sell to for the highest price, going to be a person who wants to live in the apartment?”

If it’s an investor apartment, basically, you want to be selling it when the market’s hot. When the rentals are really exciting and moving, if the rents go up that means the value’s going up. When that happens is in the first sort of half-year, that is sort of January, February, March, April. May period is when it’s a little slow. All the students have come back. Everybody that’s relocated has come back. And rental figures are up, it seems like really, prospectively, in the future, it’s really exciting when you’re selling those kind of apartments.

Now, towards the second half or more towards the end of the year, that’s the time when you have your vacancies. So you’re having your tenants move out or back overseas – your international ones – they go back over and you have a lot of vacancies. Rents can often drop. Those apartments – their values  or what they’re rented for – has a huge influence on what they sell for. So if you’re lucky enough to have an apartment that’s in a fixed-term tenancy that goes over that whole period. It’s got a very high rent, well that’s fantastic, it’s not as big of an issue.

But still, at the early part of the year, it’s more attractive investment time because that’s when everything is hot. Now when it comes to owner-occupier apartments so the purchaser you want to sell to is a non-occupier, now that’s a completely different story. Because that’s an emotional decision, that’s people who are wanting to find somewhere to live, and surprisingly, it doesn’t really matter in the apartment market. We had the whole spring thing with the houses and summer and all that kind of thing, it really doesn’t make too much of a difference.

The reason why is a lot of people relocate at the start of the year which is great, then decide after New Year’s, Yeah I want to buy an apartment, and sort of start researching January, February, March and around that time or throughout the year.

And then you have the people who know they’re going be moving or wanting to find an apartment and they still do their research. But they start the year before they want to purchase in the early year. So there’s all different kinds of buyers and they’re buying all the time. So when it’s an owner-occupier apartment it doesn’t really matter, unless it’s for the obvious period from about the 18th until about New years – over Christmas- everybody kind of forgets about property. And the rest of the year is actually fine. And surprisingly the first two weeks of January are really really hot because it’s actually a time when you’ve got, people have a break and can do all their research and they go on-line and looking up an apartment.

So in short, an investor apartment, ideally, when its really hot and the rental market is really positive which is at the start of the year when everybody is coming back. And with an owner-occupier whole time of the year, really, makes no difference. Hope that helps, and we’ll talk to you soon.

Cheers.

average period to sell an auckland apartment


Apartment Specialists Podcast No: 42

Summary:

The average time period to sell an Auckland apartment and the factors affecting the period of sales.

TRANSCRIPTION:

Good day. Andrew Murray from Apartment Specialists. Today, I am going to talk about how long it takes to sell an Auckland apartment.

Now, looking at the average of our last 25 sales, I can say, on average, it took 27 days per apartment for it to go on the market and then get sold. You can say the average time to sell an Auckland apartment in the current market is a month.

Why do some apartments sell in a day and others take up to three months, sometimes four? Well, it comes down to three reasons: one being the actual property. How suitable is the property? Is it a property that’s favourable? For example, if it is not an owner-occupier property and it doesn’t get very much light, it’s going to take longer to sell.

Does the property have anything that is not going for it? For example, maybe there are a few issues in the complex and they need to be resolved. Well, that’s going to turn off a lot of buyers and make it again, difficult to sell.

Another one is access and that’s huge. Which is very different in this market than with houses. Because most of this market has tenants. If the tenants aren’t giving you access, that can make it difficult to sell again. But at the end of the day, it all generally comes down to one thing which is the owner’s situation.

If they needed to move quickly, price is the one thing that eventually holds it up. If the apartment is priced very well, it will go out of the door. If it’s priced not very well, it will last a long time. If the apartment is priced very well, it would probably go in generally, about a month and if not, it can take a lot longer.

It comes down to the client’s situation. If they want a very high price for the apartment, it takes longer. Hopefully, the ideal client will give us that time to be able to try to achieve that for them. Through the whole time, you are giving them feedback and often, if it is priced too high, the market tells you that, and we give that information to the owner, and they adjust it accordingly.

To recap on this one. Basically, on average, it takes 27 days or around about a month to sell an Auckland apartment. I hope that helps. In the next podcast, I will talk about how much it costs to market an Auckland apartment.

Cheers.

 

Apartment Specialists Podcast No: 38

SUMMARY:

Simple steps that you need to do to look for the best agency to sell an Auckland apartment or house.

TRANSCRIPTION:

Andrew Murray from Apartment Specialists. Who specialises in selling apartments?

Now just like if – which happens quite often, I have people come up and ask me:

“Can I sell a house?”
I will say, “No.”
They will go, “Why not? You did a great job with me, with my apartment.”
I go, “Well I can sell your house. But I know I am not the best man for the job and the reason is, I do not specialise in houses”.

My market is apartments, which is a very specialised market. It is very unique. You’ve got a unit titles act. You’ve got a lot of different types of buyers. There is a lot of different ways you can add value which is very different to the housing market. I’m not confident in doing houses because I know there is somebody out there who can probably do it better.

Now that is not in case with apartments, then obviously that is what I do. Now I hope if somebody had an apartment and they went to a housing agent. And you know the majority of the business is houses – they said to them – “Would you like to sell my apartment?” That they would say – “No, I’m not the best agent for the job.” In an ideal world, that is what should happen. But unfortunately that does not happen. Most agents sell whatever they can, as that is the nature of the business.

Now to help you look for or find the best agent or agency for you, besides obviously listening to myself, from Apartment Specialists. There is also a few other agencies that do apartments or the majority of what they sell is apartments. Now you have got – the only two agencies which only do apartments – The Apartment Specialists and City Sales and you have also got Ray White. Their office down on Lorne Street, and Britomart. And then you have got Barfoots. Now they do a lot of the mortgagee sales. And you have got Baileys down on the waterfront. They do a lot of leasehold stuff. I’ve got a few agents who do some character stuff. And you’ve got Property Asia. The name says it all. And that is pretty much it. You’ve got other ones which dabble here and there but those are the main offices that have agents which – the majority of what they sell are apartments. That is where you will find the true apartment specialists. And there are those particular branches which are in the CBD.

So have a look around. Find out which agent or agency is best for you. Always make sure when you are going with an apartment or house you are going with somebody who specializes in: a. In your apartment and b. In your area. I hope that helps.

Next week, I am going to be talking about how to choose the right Auckland real estate agent for you.

Good. Thank you.
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