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SuperCity apartments winners for investors

Apartment investors have been bigger beneficiaries of Auckland’s booming market than investors who own houses, according to a new property data service.

Thursday, June 16th 2016, 11:30AM

by Miriam Bell

Homes.co.nz has just released data on house and apartment price growth in Auckland and Wellington over recent years and it seems that Auckland apartment owners are the big winners.

The data, which covers the period from January 1 2012 to March 30 2016, shows that, in Auckland, both houses and apartments saw hefty price growth over that time.

Auckland’s average house sale price was $539,637 in 2012. It had gone up to $986,206 by 2016 – which equates to 60.63% price growth.

Auckland’s average apartment sale price was $353,040 in 2012. It had gone up to $634,777 by 2016 – which is price growth of 57.21%.

Homes.co.nz CEO John Holt CEO said the data suggests Auckland apartment investors have done better than the city’s house investors over this cycle.

This is because of the higher yields available to apartment owners, alongside capital gains which were equivalent to those seen by in the housing market.

"There are arguably more variables at play in apartments keeping many investors at bay. But it looks to have been a cost effective option for Auckland investors who jumped in early.”

Capital gains on apartments are solid in Auckland, where the house price to median income now sits at a multiplier of 9, he said.

“Multiples like that force many to search for alternatives.

"Apartments are a great solution to a fast growing city. It doesn't take much travel into larger cities to see this. Central density creates more efficient infrastructure.”

While Auckland apartment investors might be sitting pretty, the same can’t be said for Wellington apartment investors.

The homes.co.nz data shows that apartment price growth in Wellington actually declined between 2012 and 2016.

Wellington’s average apartment sale price was $384,702 in 2012. It had gone up to $450,622 by 2016 – which indicates a decline of -11.31% in price growth.

Holt said that, in comparison to Auckland, Wellington hasn't experienced the level of price pressure or population growth to create the mind shift towards apartments.

"I wouldn't expect to see the Auckland level of growth in apartments in areas where population growth is slow, although those investors motivated purely by yield may still benefit in a long term buy.”

However, Wellington investors who own houses are in a better position than the city’s apartment investors.

Wellington’s average house sale price was $462,815 in 2012. It had gone up to $633,500 by 2016 – which equates to 35.59% price growth.

Holt added that homes.co.nz also has data which indicates that, in both Auckland and Wellington, the smallest houses are seeing some of the biggest price changes.

This means investors are likely to see larger price gains when buying smaller houses.

*Homes.co.nz is a new property data service which offers free sales histories and estimated values information.

 

« Blaming landlords not the answerFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

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Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 ▲4.29 ▲5.09 ▲5.35
Kainga Ora ▲5.43 ▲4.57 ▲5.58 ▲5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 ▼5.14 ▼5.79 6.15
TSB Special 4.79 ▼4.34 ▼4.99 5.35
Unity 5.65 ▲4.80 ▲5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

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