8 August 2012
New Zealand apartments are becoming more favourable for property investment according to real estate agency Bayleys who identified high returns and affordability as the driver.
Bayleys says market activity has increased noticeably since the beginning of 2011, with 340 transactions recorded by Real Estate Institute of New Zealand (REINZ) in the first quarter of 2012. This figure marks the highest amount of transactions in this quarter since 2007.
Apartment sales have been particularly strong in Auckland City where 1340 sales were recorded in the year ended March 2012. This was up more than 50% on the year ending March 2010 and 27% on 2011.
The median price for apartments has seen an increase from $180,000 in 2008 to $200,000 which is likely to also be a result of the shortage in Auckland property.
According to Bayleys researchers, upward pressure on rentals has led to healthier returns for investors.
“An analysis of auction sales over the last year has shown freehold apartments are returning 6%-8.5% per annum net of rates and operating expenditure.”