tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, August 14th, 7:08PM

News

rss
Latest Headlines

Apartment market still dominated by investors

Baby-boomers might be a growing force in Auckland’s apartment market, as new Colliers research claims, but they are still far out-numbered by investors.

Tuesday, October 27th 2015, 7:05PM

by Miriam Bell

A Colliers International analysis of buyers in the Alexandra Park development shows that, to date, 82% are owner-occupiers and just 18% are investors.

It also shows that 79% of buyers were 45 years of age or older – and 37% were older than 60. Just 21% of buyers were under 44 years old.

Pete Evans, who is Colliers International’s national director of residential property marketing, said the Auckland apartment market has come of age with baby-boomers increasingly attracted to apartments.

“I think a lot of people still presume those buying apartments are investors wanting to put the likes of students in them or young people who can’t afford their own standalone house.

“These numbers blow those out-of-date perceptions out of the water.”

Until recently, many thought apartments were the domain of the young, were too small and not a good option for the average middle-class middle-aged Aucklander, Evans said.

“Twenty years on and it’s the baby-boomers who are the largest growth market.”

However, these claims have been disputed by one of Auckland’s apartment experts.

Apartment Specialists’ Andrew Murray said the Colliers data might be correct when it came to new high-end apartment developments on the fringes of the central city.

But he said it was incorrect when applied to the Auckland apartment market overall.

“Baby-boomers are attracted to the high-end apartment developments springing up in places like Mt Eden, Grey Lynn and Greenlane. For many, it means they can downsize but still move to another property in the community they are established in.

“They can afford to do it. But those new developments are well out of the price range of most first home buyers, while for investors they don’t offer the returns they are looking for.”

Looking at the apartment market across the board about 70% of stock being sold is still going to investors, Murray said.

“Most of the new apartment developments, particularly in the CBD, are still not high-end enough for baby-boomers. They sell to investors and also overseas buyers.”

The fact that established apartment investors are doing well out of the current property boom probably adds to their attractiveness to other investors.

Murray said the increase in apartment prices means that those who bought apartments years ago, when no-one else wanted them, are now seeing a net return of about 14%.

“With that sort of return, why would you get out of the apartment market? Where else can you get that sort of return?"

It’s all about cash flow and income for the older investors with smaller apartments, Murray said.

"Meanwhile, younger investors are buying the larger apartments which offer superious return figures with the proposition of selling to emotional first home buyers in the future.

"It's the holy grail of an investor if you will..... capital gain and return."

« Housing market dangersInvestors not as risky as RBNZ suggested - Treasury »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • a2: could the milk be starting to turn?
    “Great Fundemental look.I guess in the ASX50 . as long as Aussies still love buying the Dip..its no worries Graeme Adams...”
    1 day ago by Graeme33
  • It starts with governance
    “Hi David and thanks for your words also. I did read the FMA stuff before the post and also in my first response mention...”
    1 day ago by gavin austin adviser business compliance
  • AMP reports profit drop amid 'solid' result
    “Sadly, AMP is becoming less and less relevant. Apart from this tiny blip of positive cash inflow, they've been bleeding clients...”
    1 day ago by Contrarian
  • It starts with governance
    “Good words Gavin - might also mention the FMA publication - https://www.fma.govt.nz/compliance/guidance-library/corporate-governance-in-new-zealand-principles-and-guidelines/...”
    1 day ago by dcwhyte
  • It starts with governance
    “adviser1 - go talk to Partners Life. they have a great tool to help with this sort of stuff. ...”
    1 day ago by Tash
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 ▼2.93 ▼3.07 ▼3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 ▼3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 ▼3.55 ▼3.49 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.05 3.13 3.12

Last updated: 14 August 2020 1:06pm

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com