|Auckland is changing from a ‘large town’ to a thriving city with $14 billion dollars of construction underway, creating jobs and rental property demand.|
We are coming out of our usual slow winter period with low numbers of listings. There is now renewed activity with increased listings as we move through spring and into summer, making it a great time to review the market and get up to date with the latest trends.
Did you know?
- There are a little over 20,000 apartments in central Auckland and another 2,000 in development due to be completed by 2021.
- In 2009 we were paying $6,000/m2 for existing stock. Now in 2018 we are paying $10,000/m2 for the same stock. Furthemore, off the plans ‘new stock’ is currently settling at $15,000 – $17,000/m2.
Because the central city is the cheapest property market to invest in within greater Auckland it is an obvious place to diversify your property portfolio or purchase your first investment property. With an average apartment price of $400,000 (half that of the average suburban price) it means less money and less risk. Even with the number of projects underway there are still not enough apartments being built to satisfy demand, especially with most developers finishing their current projects and taking a break. This means current stock will only go up in value in the short to medium term making apartments a wise investment.This is a great article
detailing where our largest city is heading. We also like the emerging Auckland website
where you can watch the current projects underway.Always invest where infrastructure is being built.
Personally I am keeping an eye on:
- the city rail link which is well underway;
- the Skycity convention centre taking shape, with potentially a 1000 new jobs;
- the 5 star Hyatt nearing completion in the Viaduct Harbour;
- Pacifica now rising out of the ground in Commerce Street;
- the 65 Federal Street high-rise proposal by Chinese investors;
- the $550 million dollar downtown skyscraper becoming a dominant figure on the city’s landscape; and
- the city gearing up for the 2021 America’s Cup.
Increasing petrol prices and limited public transport services have also been contributing to more people moving closer to their employment in an effort to reduce costs in both time and money. There are also more owner occupiers buying in the central city, which reduces rental stock and in turn increases rents. This is an attractive equation for investors buying apartments to gain returns greater than the banks are offering.
I have seen the apartment market evolve significantly over the last 13 years and l can only see the market continue to prosper, mature and reward those who choose to invest in this niche segment of the property market. There are some incredible construction projects currently underway making the central city a more enjoyable, fun and vibrant place to live and invest in. The future is certainly looking bright for the Auckland apartment market.