An apartment in Auckland's CBD which increased in price by 63% over the last two years indicates the growing interest in better quality apartments suitable for owner-occupiers.
According to QV.co.nz, the 54 square metre, one bedroom apartment in the Shortlands building at the top of Shortland St in the CBD was purchased for $242,000 in 2012, sold for $315,000 in June this year and sold today at Ray White City Apartments' weekly lunchtime auction for $395,000.
That was a 25% increase in four months and a 63% increase in two years.
The quality of the apartment, its relative spaciousness compared to many inner city apartments, and location opposite the park at the top of Emily Place would all have added to its appeal to owner-occupiers.
Recent sales suggest growing demand for such apartments, which reflects the huge lift in suburban house prices in Auckland over the last few years.
Unfortunately Auckland does not have many CBD apartment buildings suitable for owner -occupiers because the vast majority of apartments built during the last boom were so-called shoe boxes, tiny apartments purchased by investors, often to rent out to students.
However the supply of apartments suitable for owner-occupiers could increase significantly over the next few years as a wave of new office buildings are constructed at the harbour side end of the CBD.
These are likely to draw their commercial tenants out of older office buildings further back in the CBD and the higher prices being achieved for better quality apartments means converting the older office buildings into apartments becomes a more viable option for their owners and developers.
At the same Ray White auction there was a mix of owner-occupied and more traditional investment fare up for grabs and a couple of leasehold units that produced some interesting results.
The full auction results are below:
411/72 Nelson St. The Zest building. A 21sq m one bedroom unit, sold furnished. Sold for $150,000. It was rented at $280 a week which provided a gross yield of 9.8%. Rates were $733 and the body corporate levy $1726. According to QV.co.nz the apartment was purchased for $103,250 in 2007 and resold for $190,000 in 2008.
7c/97 Shortland St. Shortlands building. A 54sq m, one bedroom unit sold with vacant possession but with potential rent appraised at $460 to $480 a week if offered furnished. Sold for $395,000. Rates $1104, body corporate levy $3220. According to QV.co.nz the property was previously sold for $242,000 in 2012 and $315,000 in June this year.
10 Dovedale Place, Parnell. A 102sq m, three level unit that was part of a large terraced housing development. It had three bedrooms, two bathrooms and a garage. The sale of this property was always going to be a challenge because it was on a leasehold title and the complex had weathertightness issues. Although maintenance plans are in place to fix the problems, a new owner would be required to pay the body corporate $47,560 towards the cost of remediation work. The property was rented for $530 a week and according to QV.co.nz it was purchased for $197,500 in 1999. The opening bid for this unit was $10,000 and several bidders forced that up to $40,000 but when they would go no higher it was passed in. Rates on the unit were $1184 and the body corporate levy and ground rent were $9119.
204/57 Mahuhu Crescent. Hudson Brown building. A 48sq m, one bedroom apartment with car park, rented for $400 a week This property was on a leasehold title but that didn't deter multiple bidders from putting their hands up and it sold under the hammer for $157,000. Rates were $1105 and the body corporate levy was $6184. According to QV.co.nz the property was originally purchased for $406,000 in 2006 and resold for $100,000 in 2011.
2204/74 Albert St. The Barclay building. A 45sq m, one bedroom unit with west facing city and harbour views. Vacant, but potential rent appraised at $450-$480 a week if furnished. Sold under the hammer for $311,000. Rates were $3386 and the body corporate levy $4652. According to QV.co.nz the property was previously sold for $369,000 in 2010.
802/11 Union St. The Harbour Green building. A 21sq m studio rented at $270 a week. There were no bids on this property and it was passed in.
50/24 Norrie Ave, Mt Albert. A 65sq m, two bedroom, upper level unit in a two level suburban complex with pool. The opening bid for this property was $270,000 which the auctioneer trumped with a vendor bid of $320,000, but when no further bids were received it was passed in. It was rented at $380 a week, with rates of $1265 and body corporate levy of $3520.
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