Downsizing close to home
In apartment living, the pendulum is swinging away from the city, reports Catherine Harris.
Desperate to stay in the pricey areas they have long enjoyed, some Aucklanders are switching to apartments in the suburbs.
Latest figures on Auckland’s apartment sales show that the number of apartment sales are on the decline, but most severely in the CBD.
Colliers International’s twiceyearly ’’off the plan’’ apartment report, also shows that prices in the suburbs are on a steep growth path.
The per square metre asking price for suburban apartments rose 15 per cent to $10,780, compared to the first half of last year.
By contrast, apartments in the CBD and city fringe rose a modest 2 per cent to $12,715 per sqm and $13,058 per sqm respectively.
Nevertheless, Auckland’s city fringe was where the most apartment sales were made - about $144 million of sales between July and December last year .
The suburbs followed closely with $142m in sales, and the CBD with $74m.
Demand for city fringe apartments was strong, said Will Coates, Colliers’ residential marketing projects manager.
‘‘We are seeing a trend in downsizers wanting to stay within 5km of their family home,’’ he said.
Other purchasers were moving away from the traditional CBD unit and looking to city fringe and suburbs for high-quality apartments to replace the family home..
The report also showed that tougher finance criteria for developers is having an impact on the pipeline of new apartments.
Some $360m of apartments were contracted during the period, a big drop from the first half of the year, when $920m worth of sales were inked.
But while more apartments were now being built, there were fewer new ones were coming on stream.
In the first half of the year, 50 per cent of the 25 projects in the survey were being constructed, while the rest had not found a buyer.
In the second half, three-quarters were under construction, 12 per cent had been finished, and 12 per cent were still to be sold.
‘‘We have noticed due to tougher development lending policies by the banks, fewer new projects are coming to the market,’’ Coates said.
The most under-supplied market was the city fringe, which had less than six months’ supply of apartments.
A strong example of this was Epsom’s Alexandra Park, where 246 apartments had sold and were due for completion next year.
There was much more supply in the CBD, where there were enough apartments for the next 13 months, while in suburbia, there was just under seven months’ supply.
Colliers’ report covered 25 apartment projects with more than 2100 units. Four projects were in the CBD (673 apartments), 11 in the inner city (860 apartments) and 10 in the suburbs (618 apartments).