Activity in the Auckland CBD apartment market increases, but units in buildings with problems are selling at bargain basement prices

Activity is picking up again in central Auckland's apartment market although buyers remain fickle on price.

The sector has been hit hard by the reduction in overseas student numbers since the onset of the COVID-19 pandemic and that has flowed through into higher vacancy rates, lower rents and reduced prices, especially for the smaller shoebox apartments that are a mainstay of the CBD apartment market.

However buyers are still active and sales levels have recently perked up as vendors have started to become more realistic in their price expectations. However, it is still difficult to pick a trend or establish exactly where prices might settle.

That was evident at the latest auctions conducted by two of the biggest players in Auckland's apartment market, City Sales and Ray White City Apartments.

Eight apartments were on offer at each auction, with four selling under the hammer at City Sales and three selling under the hammer at Ray White.

Two of the apartments that sold at the City Sales auction had remediation issues. One was in the Connaught building on Waterloo Quadrant near the High Court, and the other was in the Harbour City complex on Gore St.

Prices of apartments in both buildings have been under downward pressure due to their remediation issues.

The Connaught apartment is a 56 square metre, one bedroom unit with a car park, which has a rating valuation of $730,000. It sold under the hammer for $350,000.

Prices in the Harbour City building have been under even greater pressure and the 51 square metre, two bedroom unit with a rating valuation $440,000 offered last week, sold for just $50,000.

Also on offer at the same auction was a 91 square metre unit in the Scene One building on Beach Rd at the bottom of town.

It had two bedrooms, two bathrooms and a car park and was rented out at $650 a week. But it is on a leasehold title and had combined outgoings (rates, opex and ground rent) of $30,765 a year, equivalent to $591 a week.

It sold under the hammer for $15,000.

The other apartment to sell at the same auction was a 47 square metre, two bedroom unit under management contract as part of a serviced apartment hotel in Hobson St. It had a rating valuation of $400,000, but sold under the hammer for $220,000 plus GST (if any).

At the Ray White City Apartments auction the following day two apartments in The Beaumont building opposite Victoria Park were offered.

One was an 82 square metre, one bedroom unit with a car park and had a rating valuation of $720,000. It sold under the hammer for $765,000.

The other was a 122 square metre, two bedroom unit with two car parks and a rating valuation of $1.12 million. Although there were multiple bidders for the property it was passed in with a top bid of $1 million.

Also sold under the hammer was a 76 square metre, two bedroom unit with two car parks in the Scene Three building on Beach Rd.

This was a leasehold property with total outgoings of $32,774 a year. After competitive bidding between two keen buyers it sold under the hammer for $80,000.

The third sale at the same auction was a unit in the Memphis building in Eden Terrace.

The 52 square metre unit had one bedroom and a car park and overlooked Basque Park.

It had a rating valuation of $510,000 and sold for $520,000.

Details of the individual properties offered at all of the auctions monitored by interest.co.nz , and the results achieved, are available on our Residential Auction Results page. 

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