UNAFFORDABLE
The CBD (Central Business District) Apartment market has offered a frustrating opportunity to "first home buyers" in the past but there are rapid changes afoot that may mark the end of a short term era.
Frustrating opportunity because (as opposed to a rundown group house in Henderson with Falcons on blocks and pitbulls on guard and Bank finance thrown at you at 95% of purchase price) our first home buyers have had to (or more likely Dad and Mum have had to) stump up usually 30% cash and more if the suite is smaller than a Melbourne-based Bank Director likes.
However we have managed to keep this market alive with all sorts of creative techniques in the past even down to the age old (and legally fraught) post-dated cheque for a final payment.
But this was in the days not long past (2002) when we were selling studios in the City for $95,000 (yes the last $5,000 was a cheque dated 6 months post settlement!) and no, no one cancelled their cheque.
Did we tell the lawyers???
Can't remember.
Times have changed.
With Marketing Guru/Auctioneer Gary Hendrick from Melbourne on the Team we are anxiously and accurately watching the Melbourne, Sydney and Brisbane markets for signs of growth, culture change and affordability in these sister cities.
The news is good for owners but bad for new entrants.
No matter how many apartments are supplied to Auckland's CBD we have noticed an unassailable effect from surrounding, established suburbs.
As Grey Lynn villas ($150,000 in the 90's) pass $600,000 so City Apartments lift in concert. Because they will always have to.
Entry to the CBD Apartment market hovers around the $130,000 mark today (if it's less buy it but be prepared to assault your Bank Manager for finance) and rising. A good studio (please watch floor areas) now starts at $160,000 (see the Statesman, 30m2) and run to over $200,000.
There is little Real Estate in Auckland now that is in the writer's opinion "good real estate" available under $200,000 and that's where we see the CBD Apartment Market headed rapidly.
On an academic note we predict a final resurgence in dearer Apartments - the $600,000 to $1,500,000 range.
Apartment sales in our market have traditionally stopped at $600,000 with higher sales being celebrated events (don't feel sorry for us, we sell a LOT of cheaper Apartments!).
However the disgraceful Auckland roading chaos (it often takes the writer an hour to traverse from Milford to our Karangahape Penthouse offices), the huge suburban wealth lift in property values and the continuing excitement of the City Apartment culture and sophistication is bringing more and more "first time lookers" to our CBD-wide OPENS on the weekends.
And the impulsive buying brings a tear to my eye.
(No, I live in Milford because I have got too many kids.)
My prediction is that we will follow Sydney and Melbourne particularly and than by 05 it will be difficult to invest in The City for under $200,000.
Please email the writer or phone at any time for an update on OUR market.
We currently have over 30 staff solely dedicated to the City Apartment Market - sales, rentals and property management and our motto is to "tell it like it is"!
It's going to be a great year!
MARTIN
