Quality apartments in Auck?

[tanmedia]

Auckland CBD apartments will shortly be in short supply. Very short supply.

Terry, can I tag a "why" onto that?

[CJ]

How many are currently under construction and how many have consent granted? My guess is very few.

The issue is demand and what types of apartment have demand and which attract the wrong sort of demand.

[tpr2]

Terry, can I tag a "why" onto that?

CJ has beaten me to the punchline.

Currently you can find property at well under what it costs to build a new apartment.

As construction costs are not going to halve in the near future it can only be assumed that developers will not build in such an environment, i.e build something that costs them say 300k only to find they can only sell it for 250k.

Look around and you will see very few cranes in Auckland at the moment and from what I understand there is only one new project about to start.

There are a couple that are finishing but thats it.

The one that is about to start won't finish until 2011 so that leaves a good 12 months or more at least where there is no new supply.

Auckland still has a positive net migration and as various factors impact upon our views of how a life should be lived apartment living becomes a more viable option for many.

Nearly all our new imigrants come from popultions that are used to high density living and generation y certainly don't have the same desires baby boomers and generation x had for the quarter acre and the dog.

Give them a balcony and the dog and they will be happy....lol.

It doe's not take much shift in sentiment to suddenly see Auckland CBD seriously short of property.

I think Kieran has stated there are 12,000 dwellings in the CBD (check that because I read it back in his december suburbwatch so I may be wrong). There are some 22500 residents and there is an average of 1.9 per dwelling.....someone may be able to help me with those stats.

So this would indicate that with people still moving to the CBD but no new apartments being built the current oversupply will be sucked up pretty quickly.

sure there are some crappy apartments but that just means the new ones or the larger ones will be even more desirable.

[Bob Da Builder]

Tpr2

You don't see the whole over supply of apartments repeating itself again in the future ? I do.

there are better areas of property to invest in. Not going to elaborate, you will have to work it out for yourself.

However I'm sure you could get seriously rich off appartment investing if you played your cards right. I think thats how Donald trump got started.

[mjmarketing]

Yes agree but not an area for the novice or faint-hearted! - you need to know the market really well - I'm happy to leave it to the experts(and yes I know the definition of expert).

Makaela

[Bob Kane]

I am also interested in peoples views on:
1 Hobson
H47
Statesman
Quay west

These as well as the ones mentioned above appear to be the higher quality tower blocks?

Quay West - I've never heard any bad stories about it so far.
It's apartments seem to always go up in price and they achieve high rents.
Plus it's on freehold land.
Can anyone tell a negative story about it?

[tpr2]

Tpr2

You don't see the whole over supply of apartments repeating itself again in the future ? I do.

there are better areas of property to invest in. Not going to elaborate, you will have to work it out for yourself.

However I'm sure you could get seriously rich off appartment investing if you played your cards right. I think thats how Donald trump got started.

Hi Bob.

Of course it will, thats the nature of the apartment cycle and why so much can be made from those in the know.

Severe undersupply leads to big jumps, every body gets in including the developers who then throw up so many new apartments it's not funny and you end up with over supply and the inevitable slowing down.

Donald didn't just start off getting rich through apartments he still makes his money from building them.

As for better areas to invest in, well that depends on what your after doesn't it.

And it depends on what you define as a better investment. I can't comment though as you haven't provided any more information than there are better areas.

[tpr2]

Quay West - I've never heard any bad stories about it so far.
It's apartments seem to always go up in price and they achieve high rents.
Plus it's on freehold land.
Can anyone tell a negative story about it?

Hi Bob

I've not heard of any bad stories either, the apartments I have viewed in there were up on the top floors though and they are fantastic in terms of size and fitout. Not you standard run of the mill investment property though as I doubt the yield would even hit the edge of most PT'ers radars.

[Bob Kane]

Cheers Terry.
Just add Quay West to that list of apartment buildings where prices don't go down.
Bit like houses really.

[tpr2]

Indeed Bob.

It's something people need to realise when you talk about Auckland CBD.

Each building is almost a suburb or village of it's own, a whole micro climate perhaps.

I went to check out a 135m2 penthouse today in fact, it's beautiful with incredible views and really the only thing that dissapointed me was that it was not the whole floor.

The vendor still wants up around the 1.7mill though and they have a recent val and sales to justify such a price.

Would you compare that to the 35 m2 apartments, I think most people would agree that you wouldn't and yet the catch cry is "stay away from Auckland CBD".

There are plenty or crappy apartments in Auckland but there are also some great ones.

[tanmedia]

Indeed Bob.

It's something people need to realise when you talk about Auckland CBD.

Each building is almost a suburb or village of it's own, a whole micro climate perhaps.

I went to check out a 135m2 penthouse today in fact, it's beautiful with incredible views and really the only thing that dissapointed me was that it was not the whole floor.

The vendor still wants up around the 1.7mill though and they have a recent val and sales to justify such a price.

Would you compare that to the 35 m2 apartments, I think most people would agree that you wouldn't and yet the catch cry is "stay away from Auckland CBD".

There are plenty or crappy apartments in Auckland but there are also some great ones.

It's pretty much the same thing wherever you go. There are 10s of thousands of places in Osaka that go for 5-6 million yen, but you wouldn't want to live in them.

It might be a bit optimistic for this to happen in the near future, but you might find developers actually aim at the lower end of the market with places that actually enhance people's lifestyles. Mind you, that would require creativity and effort, not traits you find easily among NZ developers.

[Green Fish]

Quay West is a quality building, with quality apartments. Check the unit plan: Large floor area, with high ceilings.

The last time I was in there was 1999, so I can't comment on the current state of the interior. But at the time I saw it, it was very good.

[tpr2]

It's still great greenfish.

Some of the sub penthouses are just magic.

[watchful]

Think I have said it before. The problem with many apartment sales are that you need to find a purchaser when it's time to sell. The way I see it, with credit slowly drying up, and general property prices falling, the primary owners of inner city apartments will be investors. If this is so, high B/C fees, water rates etc, and generally lower occupancy rates all work against apartments as being the best investment vehicles.

I believe, in the past, apartments were seen as a good opportunity to get onto the property ladder with soaring house prices. For many that is all that was affordable. This is and will continue to change rapidly. In the past there were not many houses that you could buy that were (reasonably located) close to CBD Auckland for $450,000. Yet you could buy a modern apartment for such a price. Now (some) house prices are nearly at those levels again. With interest rates forecast to drop these levels will be the most affordable they have been for quite some time.

Terry, I went for a stroll along the Westmere Peninsula the other day and for $1.7 mil I could buy a pretty nice ex-state on a sunny section backing on to the beach (Riparian rights I would imagine). Now each to their own, but why would I want a ($1.7 mil) apartment in central Auck, paying 8K P.A in B/C fees (prob more) when I could be a 5 min drive (or bus) to the same point and be able to launch my boat from my section with views to Birkenhead? Maybe it's just me...

I started my portfolio (around 10 years ago) with an apartment because that was all I could afford at the time. However if other housing - in the areas I was interested in - had've been more affordable to me at the time this would not have been the case.

[tpr2]

Great insight watchful and I agree with you, a 1.7 million apartment with 16k in BC fee's is not a great investment and I would not ever put it up in that category unless it was truly unique (Like a whole floor for example) as the rarity of it will provide some protection against capital losses.

I also understand some peoples love of dropping the boat into the water from the back yard.

I live from 3 homes though and for example in Auckland I love walking out of my apartment (whole floor ) and 80 seconds later I am in my office.

I have a lake home for holidays and riparian rights at the family bay on the barrier for all that other stuff.

At the higher end rightful its more about how we are living our life rather than whats a good investment.

As for the lower end, 200k to 350k, thats where I see the apartments as being great.
I have a mixed portfolio of houses, units and apartments in various locations and I kind of like the ease of owning the apartments.

My houses at the mount for example require a lot of maintenance as do my ones on the gold coast.

The apartments require very little as I am paying for it in the BC.

With property I don't actully believe there is a perfect investmen that fits everybody.
Each property will work for some people and not for others and I believe that is the key, making sure you understand what it is you need from a property and then finding the appropriate one to deliver that.