New Zealanders are Homing in on Flats

Weary buyers have been taking a fresh look at apartments – not houses.

Many New Zealand Property Investors and first-home buyers are giving up on the house in the suburbs and focusing on apartments in the centre of the city.

Martin Dunn, of apartment specialist real estate agency City Sales, said

there had been a shift in the demographics of apartment buyers. The proportion of owner-occupiers looking to buy had changed from 30 per cent of the market a couple of years ago to 45 per cent.

Martin’s office is seeing a lot of New Zealand property investment businesses and first-home buyers who are unwilling to outlay $600,000 for a house in the suburbs.

Auckland’s median house price increased by 1.9 per cent in November compared to October, to $540,000. Barfoot and Thompson reported an average price of $627,721 for the city.

A freehold two-bedroom apartment with parking spaces is selling for less than $300,000.

Real Estate Institute chief executive Helen O’Sullivan said it was logical for investors and first-home buyers to look at apartments.

If your price point is $400,000, you can do quite well in the apartment market.

Dunn said the fact that banks were easing their lending criteria had prompted the increase in activity, and with over 100,000 apartments nationwide, it is a growing market. Rising prices are reducing the yields for investors but many are still buying apartments.

Auckland Property Investors Association president David Whitburn said that Australian investors were very active in the city’s apartment market.

They think anything over 5 per cent is a good gross yield.

PropertyTutors advise that you need to be more careful when investing in apartments – you need to do due diligence on the apartment and the on the body corporate.

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For further reading on Property Investment NZ, click on the articles below:

Setting Goals for Financial Independence – click here

Tips for Becoming a Property Expert – click here

Buying Rules for Property Investment – click here

5 Tips to Add Value through Renovation – click here

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