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: Saturday, May 25th, 1:32PM

News

rss
Latest Headlines

Who loves apartments the most

New Zealanders may have finally started to embrace apartments as homes but it is investors who buy them the most, according to new analysis from CoreLogic.

Thursday, December 12th 2019, 10:28AM

by The Landlord

Using their Buyer Classification data, the property research company has taken a look at which buyer groups have been buying both “new”* and “old”, or existing, apartments in Auckland.

It turns out that investors lead the pack in both categories.

The data shows that the largest buyer group for new apartments in 2019 is mortgaged investors. They had market share of 34%, up from 29% in 2018.

When it came old apartments the buyer group with the biggest market share was cash investors with 29%.

That share is lower than 31% in 2018, but the share of purchases going to mortgaged investors was up (from 22% in 2018 to 25% in 2019).

In contrast, first homes buyers had a 20% share of the new apartment market and 14% in the old apartment market.

CoreLogic Senior Property Economist Kelvin Davidson says that a key insight to take from this data is that it is further confirmation of the rising presence of mortgaged investors in the property market.

The reasons for this rise include the low returns on other assets (e.g. term deposits) and the boost to confidence (and profits) that was provided by the scrapping of capital gains tax proposals.

But Davidson says another factor has been rising rents and, now, the start of an upturn for yields as well.

“In terms of yields by property type, the appeal of apartments is pretty clear to see: for properties recently on the rental market in Auckland (not split by new or old), gross yields are already starting at a much higher level for one-bedroom apartments than three-bedroom houses.

“In Parnell, for example, the gross yields for one-bedroom apartments (5.1%) recently rented out are easily more than double the figure for three-bedroom houses (2.2%).”

Anecdotally, they hear quite a lot that yields on new-build apartments (and houses) are also higher than older properties, while new-builds are also exempt from the LVR lending speed limits, Davidson says.

“Alongside better (and rising) yields, there is another strong reason why some mortgaged investors will have found Auckland apartments to be a good buy lately.

“That is they may well have been finding sellers wanting to get a fast sale and managed to pick up some ‘bargains’.

“In Auckland City, the proportion of apartment resales made below the original purchase price has risen steadily over the past 2-3 years. No doubt some of these ‘loss-makers’ will have been snapped up by canny mortgaged investors.”

* New apartments are defined as those where the building age is in the same year as transfer/purchase. The rest are ‘old’, or existing properties.

Read more:

Revisiting apartments 

SuperCity changes enabled by Unitary Plan

Tags: Apartments Auckland capital gains tax CoreLogic housing market investment property investment real estate rental returns rents yield

« Buyer sentiment at seven year highRecord prices see upturn gathering pace »

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
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.29 6.59
SBS Bank Special - 7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

Last updated: 20 May 2024 10:01am

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