Auckland: Apartment Report February 2022

AUCKLAND: APARTMENT REPORT

FEBRUARY 2022 | PROPERTY REPORT

The group with the family factor

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CONTENTS:

RAY WHITE CITY APARTMENTS Market Comment Auckland Central Statistics Article – Covid headwinds upended NZ’s $42m penthouse February Sales Article – Auckland for under $1m Why Choose Us? Marketing Your Home Meet the Team

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MARKET COMMENT

AUCKLAND APARTMENT MARKET ST EADY DESPITE OMICRON I MPACT The Auckland City apartment market had a fairly steady month of sales in February, if somewhat curtailed by the effects of Omicron. Director of Ray White’s City Realty Group, Daniel Horrobin says: “The level of listings was good but we definitely have seen the effects of less people willing to come out and about as Omicron has been spreading in the community.”

“A portion of people have been reluctant to come out and inspect properties on offer, meaning sales have been continuing but are down in February 2021. This is to be expected during Omicron’s high growth phase in the community, which has also meant there has been less foot traffic generally around the CBD.” Daniel says: “Ray White City Apartments listed 72 new apartment listings in February, up on January’s traditionally subdued listings, so there has definitely been a good level of choice out there for buyers.”

Buyers have been taking stock of the fact interest rates have been creeping up and other new factors in the market. These include the tightening of loan to value ratios (LVRs) and lenders applying more scrutiny to borrower affordability as a result of the changes to the Credit Contracts and Consumer Finance Act 2003 (CCCFA).

There is anecdotal evidence that brokers have advised some buyers to take time to establish a more positive financial track record by pulling back on their day-to-day spending, given the increased rigour with which lenders are scrutinising their ability to make mortgage repayments. The CCCFA changes are impacting first home buyers most, as those already on the property ladder and looking to advance tend to be in a stronger financial position. Despite this, apartments remain a more affordable option for first home buyers.

Meanwhile, at the other end of the market, February showed evidence of some of the city’s more high-end apartments selling quickly.

Confidence is building amongst the investor segment of the apartment market, who remain its dominant segment. As news builds about the prospect of borders reopening, investors are anticipating the return of skilled migrants and overseas students to New Zealand.

Daniel says: “When this happens it is certainly going to put upwards pressure on rents, so the steady activity we’re currently seeing in the city apartment market may effectively be the calm before the storm.”

DANIEL H O R ROB I N City Realty Group Director 021 595 976 | daniel.horrobin@raywhite.com

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COVID HEADWINDS UPENDED NZ’S $42M PENTHOUSE Catherine Smith

The decision to carve up New Zealand’s most expensive listing - the super penthouse in New Zealand’s Pacifica tower - into three separate apartments has opened up debate on just how high prices for high-rise living can go in Auckland.

New Zealand Sotheby’s International Realty is inviting buyers to either submit tenders for the 1219sqm two-storey penthouse – previously on the market for $42.5m - or put their hand up for one of three other options for the space: a two-storey 603sqm apartment; a single-storey 300sqm apartment and a single-storey 260sqm apartment.

All are being offered as warm shells – finished on the outside, but awaiting full interior fit out.

New Zealand Sotheby’s International Realty agent Pene Milne, who is marketing the property, would not be drawn on the price points of the new offerings but said that central city highrise apartments with harbour views would always fetch more than apartments located in Auckland’s city fringe suburbs – even luxury ones.

“If you look at [luxury apartment markets] overseas, the prices here are not even close,” she said.

“I understand this is Auckland, but you’d have to travel a long way to get this sort of lifestyle in other countries.”

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Milne said top-end buyers who had been inclined to choose luxury apartments developments in their home suburbs were increasingly open to downtown Auckland as an option.

“They can walk to the ferry to Waiheke, they can walk to the office, they’re in the city seeing what downtown offers. That divide that we used to have – where North Shore people didn’t come across the bridge, and St Heliers didn’t move west - that’s going.

“New Zealanders are forward looking. In two years’ time we will have caught up [with international cities].”

Milne said that despite genuine local interest in the super penthouse at its previous listing price, “Covid headwinds” had slowed international interest.

“We got to the point where we said, ‘What are the other options?’. These options open out to people who have always wanted to design their own apartment but on a smaller footprint.

“There’s limited opportunity to build any more.

This gives people a chance to disregard the total price for the completed penthouse and think differently. They’ll come in with an open mind and bring in their architect.

“I’m really excited. I don’t know where else you could do this.”

Milne said that upscale apartment buyers were now talking about right-sizing, not downsizing when selling up their big homes in Auckland suburbs like Remuera or Herne Bay.

“Do I think $20m apartment is possible? Yes, absolutely. I don’t believe we’ve had one yet, but we’re seeing the buyer appetite. It will be the international CEOs coming home.”

They were more price savvy too, she said, understanding that selling the $15m home and moving into an apartment one third the size did not mean the price was going to be one-third.

Horrobin said that his agents were starting to field enquiries from Kiwis in Australia and the Middle East, including some interested in buying mid-market $2m apartments as sound investments once New Zealand’s borders open.

Horrobin said top apartments in both the CBD and inner-city suburbs were finished to similar high standards, so buyers were necessarily losing out if they opted for village life over spectacular views.

“They’re buying the best new construction, the highest specs, quality on a par with international standards and they understand that value.”

While New Zealand’s record apartment price, $15.5m paid in 2019 for the penthouse of The International in Princes Street, by Auckland University, still stands, asking prices for a couple of other penthouse projects in the city - the CAB on Aotea Square and 51 Albert on Albert Street – could challenge that.

And apartment prices on the edge of the CBD are climbing.

A boutique development of eight apartments at 87 Shelly Beach Road in St Mary’s Bay, which Milne is also marketing, has asking prices of between $7.4m and $11m, with three already sold.

However, he is optimistic about luxury buyers coming to the city centre. “The CBD will get polished up, there’ll be more development in mid-town, we’ll see more retro-fitting of office buildings like on the K-Road ridge as commercial space is freed up,” he said.

Bayleys agent Trent Quinton, who specialises in boutique developments in Auckland’s eastern suburbs, is more sceptical.

“At that $8m to $10m price range, no one wants to be in the CBD,” he said.

“I’m not sure there is an upper ceiling for luxury apartments in New Zealand,” she said.

“It’s been deserted since Covid and become a bit of a derelict place. People want to be in the fringe suburbs.”

Daniel Horrobin, director of Ray White franchise City Realty Group, said that the top end of the apartment market had momentum.

And Quinton said the definition of fringe stretches as far away as new suburbs like Stonefields, 11km from the city.

“In the last two years boutique city fringe apartments have been selling for $8m, with some getting $31,000 per sqm. The top end will keep gaining momentum - people want the lock up and leave in the city and the bach in Omaha.

“Auckland is totally different to Sydney. There’s not a downtown location like Circular Quay.

The fringe of Kingsland, Mount Albert, beyond Remuera to Orakei, that’s where buyers want to be.”

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AUCKLAND CENTRAL

MARKET STATISTICS

T O TA L S A L E S

MEDIAN SALES PRICE

February 2022

February 2022

February 2021

February 2021

There was a 30% decrease in the total number of sales year on year.

There was a 25% decrease in the total median sale price year on year.

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$400,000 $535,000

T O TA L S A L E S VA L U E

M E D I A N D AY S ON MARKET

February 2022

February 2022

February 2021

February 2021

There was a 46% decrease in the total sales volume year on year.

There was a 53% decrease in the total median days on market year on year.

$42,919,000 $79,181,000

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FEBRUARY SALES – AUCKLAND Property

Bedrooms

Date Sold

Sale Price

511/70 Daldy Street

1

1-Feb-22

$805,000

407/45 Union Street

2

2-Feb-22

$765,000

1207/152 Hobson Street

3

2-Feb-22

$900,000

1P/72 Wellesley Street

1

2-Feb-22

$585,000

L9/30 Beach Road

2

3-Feb-22

$42,500

1108/76 Wakefield Street

1

3-Feb-22

$293,000

601/105 Queen Street

1

3-Feb-22

$435,000

4005/10 Commerce Street

2

3-Feb-22

$1,490,000

3-Feb-22

$42,500

3-Feb-22

$215,000

4-Feb-22

$360,000

911/30 Beach Road 228/6 Dockside Lane

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403/35 Hobson Street 403/35 Hobson Street

1

4-Feb-22

$360,000

5B/24 Liverpool Street

2

4-Feb-22

$130,000

5-Feb-22

$513,000

624/35 Hobson Street 624/35 Hobson Street

1

5-Feb-22

$513,000

AU25 & AU26/32 Eden Crescent

0

6-Feb-22

$105,000

1028/72 Nelson Street

2

8-Feb-22

$515,000

8-Feb-22

$440,000

403/152 Hobson Street 803/27 Rutland Street

1

8-Feb-22

$850,000

305/105 Queen Street

1

8-Feb-22

$400,000

408/147 Victoria Street West

9-Feb-22

$860,000

8L/14 Waterloo Quadrant

9-Feb-22

$180,000

1312/2 Beach Road

2

9-Feb-22

$34,000

217/133 Beach Road

1

9-Feb-22

$35,000

10-Feb-22

$125,000

11C/31 Day Street

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13C/34 Kingston Street

2

10-Feb-22

$322,000

1025/430 Queen Street

2

10-Feb-22

$377,000

8A/76 Albert Street

2

10-Feb-22

$200,000

CENTRAL Property

Bedrooms

Date Sold

Sale Price

6L/34 Kingston Street

1

11-Feb-22

$255,000

1402/1 Hobson Street

1

11-Feb-22

$1,625,000

1302/1 Hobson Street

1

11-Feb-22

$970,000

13H/6 Princes Street

1

11-Feb-22

$517,000

701/70 Daldy Street

2

14-Feb-22

$2,400,000

1205/147 Nelson Street

2

14-Feb-22

$803,500

9D/92 Nelson Street

2

14-Feb-22

$753,000

3D/8 Scotia Place

1

14-Feb-22

$155,000

903/421 Queen Street

4

14-Feb-22

$535,000

2I/508 Queen Street

1

14-Feb-22

$140,000

610/1 Parliament Street

2

14-Feb-22

$855,000

514/149 Nelson Street

1

15-Feb-22

$468,000

807/17 Vogel Lane

1

15-Feb-22

$325,000

913/85 Wakefield Street

1

15-Feb-22

$375,000

1104/45 Union Street

2

16-Feb-22

$1,400,000

4G/14 Waterloo Quadrant

2

16-Feb-22

$195,000

1026/430 Queen Street

2

17-Feb-22

$395,000

1508/26 Albert Street

3

17-Feb-22

$2,625,000

6E/11 Durham Street East

1

17-Feb-22

$435,000

6E/5 Parliament Street

2

17-Feb-22

$1,350,000

1213/30 Beach Road

1

17-Feb-22

$30,000

204/80 Beaumont Street

1

18-Feb-22

$225,000

7L/113 Vincent Street

1

18-Feb-22

$140,000

604/100 Greys Avenue

1

18-Feb-22

$270,000

704/17 Vogel Lane

4

18-Feb-22

$498,000

2406/10 Commerce Street

1

21-Feb-22

$980,000

2702/10 Commerce Street

1

21-Feb-22

$1,140,000

3204/10 Commerce Street

1

21-Feb-22

$900,000

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FEBRUARY SALES – AUCKLAND Property

Bedrooms Date Sold

Sale Price

10E/14 Waterloo Quadrant

1

21-Feb-22

$70,000

603/421 Queen Street

4

22-Feb-22

$507,000

8F/76 Albert Street

2

22-Feb-22

$250,000

209/11 Union Street

1

23-Feb-22

$215,500

4B/14 Upper Queen Street

2

23-Feb-22

$195,000

701/138 Anzac Avenue

2

23-Feb-22

$71,000

221/4 Dockside Lane

2

23-Feb-22

$229,000

310/70 Daldy Street

2

24-Feb-22

$1,575,000

4G/132 Vincent Street

2

24-Feb-22

$905,500

1C/20 Pakenham Street East

3

24-Feb-22

$326,000

905 917 & 79/22 Nelson Street

0

24-Feb-22

$580,000

1306/10 Commerce Street

2

24-Feb-22

$1,280,000

1101/9 Princes Street

0

24-Feb-22

$2,550,000

9H/14 Waterloo Quadrant

1

24-Feb-22

$90,200

1K/14 Waterloo Quadrant

1

24-Feb-22

$85,000

405/2 Dockside Lane

2

24-Feb-22

$185,000

516/10 Ronayne Street

2

24-Feb-22

$240,000

618/10 Ronayne Street

2

24-Feb-22

$240,000

512/147 Nelson Street

2

25-Feb-22

$546,000

819/147 Nelson Street

1

25-Feb-22

$560,000

4D/22 Beresford Square

2

25-Feb-22

$815,000

603/85 Customs Street

1

25-Feb-22

$150,000

908/141 Pakenham Street

2

25-Feb-22

$1,900,000

806/47 Beach Road

1

28-Feb-22

$1,000,000

Sales data is from REINZ and covers the entire Central Auckland Apartment market.

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CENTRAL

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AUCKLAND FOR UNDER $1M: AN APARTMENT FOR $34,000, A HERNE BAY PAD FOR $850,000 Diana Clement

With Auckland’s average property value close to hitting $1.6 million, according to the latest OneRoof house price figures, and big sales dominating the headlines, it pays to keep an eye on what’s happening at the bottom end of the market.

OneRoof analysed 371 auctions that took place in Auckland last week and found that of the 100 sales where the final sale price had been published, just 21 were snapped up for less than $1 million.

Most of those closing sub-$1m deals were first home buyers or investors. The properties they were buying, however, were far from typical, with one located in New Zealand’s most expensive suburb and another selling for $34,000.

Ray White auctioneer and chief operating officer Daniel Coulson singled out 6/27 Wallace Street, in Herne Bay, as a good find for its new owner.

CBD revival?

Daniel Horrobin, director of City Realty Group, which operates Ray White City Apartments, said his agency had sold 35 sub-$1m apartments in the first half of February.

Of those that sold under the hammer last week,

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two were snapped up for less than $400,000: a one-bedroom apartment at 607/105 Queen Street, otherwise known as the Guardian apartments, which sold for $350,000; and a two-bedroom corner pad in the Volt Apartments at 1025/430 Queen Street, which sold for $377,000.

Both freehold apartments were marketed as “bank friendly” and were around 40sqm in size.

Horrobin said that investors and first home buyers were returning to the CBD market. “The resurgence is mainly driven by the news of the borders opening. We noticed a significant drop off in the investment sector when the borders closed. Vacancy rates went up following the mass exodus of students in the market,” he said.

Horrobin said that entry level buyers could expect to pay $300 per week on a mortgage.

Even with body corporate and rates costs added in it was still cheaper than renting if you could get the deposit together. “That’s quite a small apartment but it’s very affordable entry level,” he said.

“The sweet spot for first home buyers in the city and city fringes is the two-bedroom apartment with a car park, sitting from around $600,000 to $650,000 max.”

When called by OneRoof, Barfoot & Thompson auctioneer Marian Tolich quipped: “I’m surprised you can get anything under $1m.”

Barfoot & Thompson sold quite a few in the week, stretching geographically from Leigh in the north to Waiuku in the south.

Some of the sales include standalone homes within commuting distance of Auckland, such as the “fairytale cottage” that started life in Wenderholm Regional Park but ended up Manly.

At the other end of the city, Barfoot and Thompson agent Antony Greenfield sold a three-bedroom, one bathroom, one garage semi-detached home in 13A Victoria Avenue, Waiuku, for $740,000. The home didn’t really appeal to first home buyers. “It was a mature person’s home and appealed to people looking to retire or downsize.” In the end it was sold to a buyer relocating from Auckland, he said.

Passing in Looking back over the first two weeks of the month, Tolich said that more than a few $1m homes had passed in at auction – although many sold shortly afterwards.

One home that had passed was 1/39 Kervil Avenue, Te Atatu, a brand-new three-story townhouse awaiting title. The auction stalled at $800,000, and it now has an advertised price of $1,080m.

requirements have gone up and up. And there is a perception that the markets are racing away from [first home buyers].”

Many of the sub-$1m properties are one and two-bedroom traditional units that in the past would have been snapped up by investors.

Thanks to new tax rules, investors have turned their attention to new builds.

6/27 Wallace Street, in Herne Bay, Auckland 1312/2 Beach Road, in the Scene Apartment buildings, in the CBD, sold for $34,000. Photo / Supplied This created an opening for first home buyers, Tolich said. “Your first home is never going to be your dream home, and buying is probably cheaper than renting if they can get the deposit.”

Few buyers at any level of the property market get exactly what they want, said Coulson. “It all depends on what boxes you want to tick.

Whether you are looking at a property under $1mor over $3m or $4m, there’s always going to be things that you compromise on.”

That holds true for the biggest outlier of last week’s auctions: a two-bedroom apartment at 1312/2 Beach Road, which sold for $34,000.

The unit, in the Scene Apartment buildings, is leasehold and the block itself has an unusual ownership structure instead of a body corporate, which makes building repairs difficult.

Asked why some properties were passing in at under $1m, Tolich said: “Finance. The deposit

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RAY WHITE CITY APARTMENTS

WHY CHOOSE US?

WE’RE ON THE UP-AND-UP. Based in the heart of Auckland City, Ray White City Apartments is an award-winning agency in Auckland City that specialise in apartment sales for investment, luxury waterfront and lifestyle.

Our 183+ dedicated professionals who understand this unique market, are all top performers who have contributed to our phenomenal results.

As the Auckland apartment market continues to experience unprecedented growth, City Apartments & Wynyard Quarter is well positioned to maintain its leadership in the market.

City Realty has a strategic partnership with Loan Market, to provide clients with the best mortgage advice and rates with brokers throughout our offices that provide Home Loans, First Home Buyers Loans, Construction Loans, Refinance, Selfemployed Loans and Vehicle Finance – whatever the loan, Loan Market can help.

Our office achieved the No.4 Ray White office in the world for 2018 and the No. 2 Ray White office in New Zealand for 2018 and we do the highest volume of sales across all agencies in New Zealand.

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MARKETING YOUR HOME 18 12

A COMPREHENSIVE M A R K E T I N G S T R AT E G Y TO R E AC H AC T I V E & PA S S I V E B U Y E R S The marketing strategy is designed to reach the breadth of the active and passive buyer pool in the most effective manner, based on their Media consumption. Our marketing strategy comprises of 3 key components; property portals, social and multichannel digital strategy and print media.

PROPERTY PORTALS P R I M A R I LY A C T I V E & S O M E PA S S I V E B U Y E R S There are 3 key portals, TradeMe Property, Realestate.co.nz and Oneroof.co.nz. Property Portals generally attract active byers in the market, OneRoof has a unique position as it reaches both active and passive property buyers due to the diversity of information it has on the platform including property listings,

estimated property values, market news and commentary. It is important to run campaigns across all 3 to effectively cover the breadth of the active buyer pool and a part of the massive buyer market. None of the property portals have complete market coverage and each of these portals have a set of unique audiences.

DIGITAL MARKETING A C T I V E & PA S S I V E B U Y E R S The Ray White City Realty Group has introduced a state-of-the-art digital solution that is powered by artificial intelligence to reach the breadth of the active and passive buyer pool across social media and multiple digital channels, including news and other high traffic websites. The programme is fully automated in the back end, it creates an audience

segment of active buyers specific to the property as well as reaching the passive buyer pool. The campaign is structured to deliver quality leads for the property, and it auto optimises spend across social media and multiple digital channels, skewing the spend towards channels that are performing the best.

PRINT MEDIA P R I M A R I LY PA S S I V E & S O M E A C T I V E B U Y E R S Print continues to play an important role to cover the breadth of the market reaching quality and highly engaged audiences. It takes criteria-based search out of the equation with respect to the active market and is the most effective medium to reach the all important passive buyer market.

This is clearly evidenced by the fact that the New Zealand herald has seen a massive 48% increase in its print readership over the last 18 months and average time spent reading the paper is over 50 minutes. The value of print is also well supported by agent feedback.

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MEET THE TEAM

CITY A PA RT M EN TS M A N AGEM E NT

Daniel Horrobin

Vikas Verma

Cameron Brain

Director of City Realty Group

General Manager for City Realty Group

Auction Manager for City Realty Group

CITY A PA RT M EN TS SA L ES P EO PLE

Ady Huang

Aileen Wu

Casey Chen

Chris Cairns

Licensee Salesperson

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Chris Guilford

Craig Warburton

David Lee

Dene O’Kane

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Dominic Worthington

Dusan Valenta

Elena Mackor

Gillian Gibson

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Habeeb Urrahman

Hunter Freeman

Jean Ooi

Jeong Lee

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Jessica Choner

Jevin Chao

John Min

Judi Yurak

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Justin Choi

Katie Read

Keisha Gutierrez

Krister Samuel

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Leo Zhu

Lisa Zhang

Marco Sahar

Mark Li

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Matthew Haines

May Ma

Michelle Yurak

Nick Armstrong

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Ryan Bridgman

Rickus Moll

Sam Huang

Santana Munns

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Sapphire Munns

Sean Ma

Siming Zhou

Steve King

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Steve Kirk

Victor Liu

Warren Thomas

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Licensee Salesperson 21

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