SUBURBAN HOUSING VS CITY APARTMENTS
While we are strong advocates for Auckland 's residential housing market for investment as well as our Apartment Market, the Apartment Market is starting to look decidedly cheap.
We looked at, last weekend, the cheapest residential areas in Auckland - Beachaven and Birkdale on the North Shore and Weymouth/Clendon in South Auckland .
Beachaven and Birkdale were always easy to spot on the "Shore" - you looked for the Police Helicopter and the suburbs were directly below.
How things change in a short time.
Now "villagey" and quaint Beachaven starts at $250,000 and many homes are nearer $400,000. Birkdale is dearer.
Rents are from $270 per week and will rise as the infrastructures of cafes and shops improve.
You are looking at a 5% gross return, probably 2.5% net if you're honest about maintenance, and dropping.
But good Real Estate.
Clendon, known to Aucklanders as the "New Otara" (sorry to all those we offend - if you haven't heard of Otara, good), now has an entry level just under $200,000 and the returns would depend on your nerves.
A typical City Sales studio investment would be $250pw on purchase price say $125,000. Occupancy? 52 weeks (yes we're Salesmen). Gross 10.4% Net - lets say rates $650 and Body Corporate fees $1,500 giving 8.7%. A little less (7.8% ) if we're managing it but worth it.
We're embarrassed to be selling Metropolis suites at near 9%!
Talk to us about setting up a carefully organized portfolio of investment apartments. On top of the robust returns and the fact that you have a wide spread of properties the depreciation allowed is significantly higher than in the suburbs where the land content (not depreciable) is the major asset.
Make an appointment to see me or my Sales Manager, Mike Richards to discuss an overview of the Apartment Market.
It'll be expensive, but worth it!
Have a great October.
MARTIN
