Value added
Apartments cost more per square metre than houses but buyers are told they can expect better quality fittings.
Apartment buyers can expect better fittings and more modern homes – but on a per-square-metre basis, you get better value for money from standalone houses.
Data from Trade Me’s Property Insights team shows that nationwide, lower-quartile apartments are selling for $5909 per sqm.
Houses in that same bracket, by contrast, change hands for $2735 per sqm.
The median was $8667 for apartments and $5000 for houses.
In Auckland City, the lower quartile apartments were $8333 per sqm, and houses $6208. The median price was $10,000 for apartments and $7884 for houses.
In Wellington, lower-quartile apartments were $5128 per sqm and houses $3846. The median apartment price was $6325 and, for houses, $4825.
‘‘We’re measuring the total value of the dwelling by square metre but we’re ignoring a few elements that obviously make apartments and houses very different,’’ head of Trade Me Property Nigel Jeffries said.
‘‘Houses include a defined area of land that you own on top of the house itself while apartments don’t. Also, apartments have benefits that some buyers really appreciate, such as garage parking, central city location, pools, gyms and no land maintenance.
‘‘Houses can often be further from the city and have all the maintenance required so they’re a very different proposition for many buyers.’’
Martin Dunn, of Auckland apartment specialist real estate agency City Sales, said people could expect a higher quality home if they opted for an apartment compared with a house at the same price.
‘‘There’s a feeling that [the apartment market] is the most legitimate residential investment market in Auckland now.’’
He said many new apartments were selling for between $12,000 and $15,000 per sqm.
‘‘We think the Auckland apartment market is at critical mass. When you look at the culture around where my office is, all the infrastructure is changing, the retail is changing and it’s normalised apartment living.’’
Andrew Bruce, president of the Auckland Property Investors Association, lives in an Auckland apartment and said he was able to buy a much better quality property by opting for a high-rise life.
‘‘There is absolutely no way the money we paid would get the sort of thing anything close to it with a house, not even close.’’
He said the apartment lifestyle suited him and his partner, who worked from home and did not have to worry about traffic.
More empty-nesters were selling their houses and moving to apartments, he said.
When you buy an apartment, the bulk of what you pay for is the dwelling itself.
Data from Homes.co.nz shows that the average Auckland apartment’s rateable value is 64 per cent made up of the building itself and just 36 per cent for the land.
Houses are almost the exact opposite – 37 per cent improvement value and 63 per cent land value.
The capital valuations of Wellington apartments were 65 per cent improvement value compared with 35 per cent land value, while houses were 56 per cent improvements and 33 per cent land value.