Auckland CBD apartment market will stay strong
October 10, 2005
Quality Auckland CBD apartment market will stay strong – Kellands forecast
Auckland’s central business district (CBD) larger apartments and heritage building market will not collapse, according to the latest study by a prominent Auckland real estate company Kellands.
Chief executive Deborah Kelland said their recent inner city heritage apartment properties resold within one year of purchase, are still producing outstanding gains for buys and investors of approximately 13 to 25 percent.
Kellands’ quarterly forecast report released today said after unprecedented growth, a combination of high-priced land, a shortage of good development sites, rising building costs and stricter urban design rules, Auckland’s CBD apartment stock is just naturally slowing.
``The product availability has really slowed because of these factors. There is next to no new product coming onto the market.’’
A summary of their recent sales shows outstanding capital gains which go against so many negative comments.
Along with a 15 percent increase on assessed rentals for “off the plans” apartments sold two years ago also demonstrates that the market place is discerning and good properties are selling and renting well.
``We have one of our buildings –Ascent in Nelson Street settling at the moment and after two years of construction, we are currently reselling those apartments showing a 7.6 to 52 percent gain to the original buyers”
Ms Kelland said the poor quality ‘little boxes’ will slump as will those rents, but there were plenty of upmarket apartments that are fetching excellent prices as people sought to live in the CBD for lifestyle reasons.”
``The city is its own neighbourhood now and with a $20 million lift to revitalise inner city streets and Auckland City’s 10 year plan with an additional $100 million in the CBD we see this continuing”
``We believe the outlook is positive. The astute end of the CBD apartment market (that our company specialises in) will continue to develop and prosper due to the lack of progress on the road programme, the rising petrol prices and the interest that tenants and owners have in brand new accommodation,’’ the report said.
Meanwhile, the recent general election was a non-event in the property market, Ms Kelland said.
``Our research into the party politics tells us that no
matter which party holds the balance of power we will not
see the huge drops that were
experienced in Sydney.
``Labour traditionally facilitates a strong property market
as we’ve seen over the last two