by Miriam Bell
City Sales director Martin Dunn has slammed the use of asking price data as a guide to the value of Auckland apartments.
When it comes to apartments, asking price data is a dishonest representation of how apartments are valued and sold, he said.
“It is a burden on the public to imply that the asking price measure is a true measure of the actual apartment market.”
Realestate.co.nz yesterday released data which indicated the average asking price for an Auckland apartment reached a new high of $660,001 in November 2015.
This was an increase of 31.5% from the average asking price of $500,000 recorded in November 2014.
It followed the release of Trade Me Property’s October asking price data which indicated the average asking price of a typical apartment rose 43% on the previous year to $573,850.
However, Dunn said the asking price data was skewed by the number of bigger, new apartments being sold and, as such, is not representative of the market.
He said that, while there can be no doubt prices for Auckland apartments were growing strongly, their value is actually assessed per square metre.
City Sales figures – which do not include new builds or leaseholds - show that, between 2010 and late 2014, the price of Auckland apartments grew from $4,000 per square metre to $6,000 per square metre.
Over the last six months, Auckland apartment prices have jumped from $6,000 per square metre to nearly $8,000 per square metre.
“That is a dramatic increase in price and, given Auckland conditions, apartment price growth will definitely continue, despite the current breather in the market.”
It seems that the apartment market, particularly in the Auckland CBD, is a difficult market to generalise about in terms of value.
Ray White apartment specialist Krister Samuels said the asking price data is interesting but, as there are 400 apartment buildings in the Auckland CBD, it is hard to generalise about the market.
“Auckland’s apartment market is a particularly granular one.
“Some buildings will have shot up over the last year, which raises owner expectations, but it often takes a while for others to respond.”
While the new, high end apartment developments are probably having an impact, the market has definitely risen over the last year, he said.
“For example, last year studio apartments were going for around $200,000 and now they are going for around $280,000.
“At the same time, bigger apartments have gone up from round $700,000 last year to around $900,000 this year.”
Due to the disparity of the market, it paid for investors who are interested in apartments to focus on a specific space in the market, like the studio space, Samuels said.
“If an investor does that, they can really keep tabs on what is happening in that part of the market and, potentially, anticipate growth.”
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