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Tim
11-05-2004, 04:39 PM
Thinking of buying apartment for daughter at Auckland University. Yield looks good.Any advice on what to but or what not to buy

Thanks

Tim

willy_wonker
11-05-2004, 04:41 PM
I wouldnt touch the Auckland apartments with a 10 km pole.

I forecast a crash in the near future for apartments.

whatsup
11-05-2004, 04:43 PM
Tim, hold off for now, the coming rise in interest rates will squeese the market ,then do your research well, put offers 20% below(min) the asking price then wait remember NOW its a buyers market CASH IS(AND SHOULD BE )KING>

moimoi
11-05-2004, 04:50 PM
tim,


don't touch anything under 50sqm.!!!!!!!!!!!

moi

Capitalist
11-05-2004, 05:16 PM
Buy Metropolis. Not talking my book, but this is advice from property guru who made me 100% on property in the last 8 months.

Tim
11-05-2004, 05:54 PM
Capitalist. Interesting comment.
Why Metropolis.
Do they have high body corp

Tim

Capitalist
11-05-2004, 06:08 PM
I don't know about the body corp Tim. My pundit believes these apartments are underpriced for their position etc. If you were thinking about it, he says to offer 100k less than what the seller is asking. It is often ~not~ the distressed seller who wants rid-- a lot of the very wealthy don't really give too much of a damn about the price.

$imon
11-05-2004, 07:59 PM
Metropolis apartments havent moved in value for 2 years! And the body corp is massive, something like $5k for a 1 bed. Total rip-off in my opinion.

If you want a funky apartment with polished jarrah floors that oozes character then you can have my 96m2 2 bed in George Court for $400k. mainly owner occupiers in this sought after building. Currently under rented at $450/wk to a mate, avoiding property mngmt fees, but could easily get $500+

$imon

skinny
11-05-2004, 08:13 PM
$imon - even at $500 rent per week you would get a gross yeild (before tax and expenses) of only 6.5%. No wonder you are looking at selling it ! Maybe Caps rule of offering $100k below the selling price is right - would bump up the yeild to a more respectable 8.7% ;)

drum
11-05-2004, 09:13 PM
If I'm not mistaken, a large canvas used to hang on the side of the Metropolis while the leak damage was being fixed up.

dinosaur
11-05-2004, 09:30 PM
And if I'm not mistaken, some apartment owners in a Hobson St block got hit with a 26K+ special body corp levy to fix leaks, not to mention the apartments had to be vacated while the repairs were done. Not good if you need the rental income to pay the mortgage.

Tread carefully, but as most have said, why rush to buy at the moment.

willy_wonker
12-05-2004, 08:18 AM
Why would you want to buy apartments in a country with only 4 million population and plenty of land? Unlike other major cities in the world with large population and low supply of land.

Capitalist
12-05-2004, 09:00 AM
quote:Originally posted by $imon

Metropolis apartments havent moved in value for 2 years!

By George, I think you've got it !!;)

wsheridan
12-05-2004, 10:16 AM
quote:Originally posted by $imon

Metropolis apartments havent moved in value for 2 years! And the body corp is massive, something like $5k for a 1 bed. Total rip-off in my opinion.

If you want a funky apartment with polished jarrah floors that oozes character then you can have my 96m2 2 bed in George Court for $400k. mainly owner occupiers in this sought after building. Currently under rented at $450/wk to a mate, avoiding property mngmt fees, but could easily get $500+

$imon


I think you need to take account of the prestige and services in the Metropolis building before dismissing it like this. Then, of course, there is Location.
I have a 1 bed there bringing in $600 a week. Am very happy with its performance.
As for property managers .... why bother with them.... they still tend to have all the problems we can encounter on our own!

Halebop
12-05-2004, 10:48 AM
quote:Originally posted by willy_wonker

Why would you want to buy apartments in a country with only 4 million population and plenty of land? Unlike other major cities in the world with large population and low supply of land.


As an apartment dweller (but not owner) I can clearly define why I live in an apartment and it has nothing to do with either the quantity of land or size of population.

I live in a character building in CBD Auckland. We have oversized furniture which fits perfectly in our two bedroom, two bathroom, 12-13 foot stud apartment. It's austere off-white walls are the perfect backdrop for our budding art collection. 30 metres it is not - probably 80ish, 90 max.

Pros:
I no longer own a car (yes this is a positive folks!). In my case this saves about $150 per week including depreciation but allowing for additional taxi expenses. And I don't have to wash the fuc%ing thing!
My commute is the 10 seconds or so it takes to get from my Bedroom to my Office in the room nextdoor.
Most of my clients are in the Auckland CBD and my home provides my business with a CBD address.
We pay $400 pw rent which is no better or worse than elsewhere in Central Auckland suburbs
Walking proximity to everthing I love: Character Buildings, Numerous cafes & restaurants, Galleries, Cinemas, Theatres, Parks, The really big book stores.
We have a fantastic outlook from every room.
No Land also means no gardening, no mowing etc.
Living in the CBD without a car immediately justified grocery shopping online. You have no idea how good this actually is until you find yourself back in a supermarket... Grrrrr. What we spend in extra delivery charges we save in impulse purchases and stress.

Cons:
Ummm...

Having said all this I wouldn't be buying right now either. I'd wait for the impact of the many apartments still coming online. Howver, if the NZ dollar comes down you will probably see a return of the Asian students at something closer to last years numbers (We're down by about half this year). This would put upwards pressure on rents again.

wsheridan
12-05-2004, 10:54 AM
quote:Originally posted by drum

If I'm not mistaken, a large canvas used to hang on the side of the Metropolis while the leak damage was being fixed up.


You are mistaken ... I think you are thinking of the Very Appropriately named Nautilus

Tim
12-05-2004, 04:36 PM
Thank you for the many comments. Very helpful. Will hold off.

wsheridan
12-05-2004, 04:54 PM
quote:Originally posted by Tim

Thank you for the many comments. Very helpful. Will hold off.


My advise is not to hold off .... its to look for a value purchase in a good location ... if you also weigh the investment up against other options such as equities.
I'm sure there are some good apartment deals in the Auckland market at the moment - especially if you take a five year view. The good apartments are unlikely to get significantly cheaper - though the bad ones might.

Capitalist
12-05-2004, 05:57 PM
There sure are some good deals. El cheapo will crash just like the Sydney market. Buy Metropolis. It is undervalued on several levels. If you snooze you lose in this life :)

$imon
12-05-2004, 08:17 PM
Skinny, the yield is just fine for the quality of apartment and size. If you look at the cr@p being built at the moment and the price/m2 i think you will find that around $4k/m2 is pretty reasonable!

$imon
12-05-2004, 08:23 PM
Metropolis is fine if you like living in a hotel with very small rooms. I personally wouldn't want to stay there more than a few weeks.

wsheridan
13-05-2004, 08:12 AM
quote:Originally posted by $imon

Metropolis is fine if you like living in a hotel with very small rooms. I personally wouldn't want to stay there more than a few weeks.


You need to move out of the cheap seats simon. There are some very large apartments there as well

CAM
13-05-2004, 12:08 PM
OK folks, besides Metropolis, what are considered some of the good apartments that one should look at??

wsheridan
13-05-2004, 12:46 PM
quote:Originally posted by CAM

OK folks, besides Metropolis, what are considered some of the good apartments that one should look at??


Soho Apartments are quite good. Central and solid

$imon
13-05-2004, 05:23 PM
With metropolis, are we talking an investment or to live in?

The yields must be fairly average to poor, especially once you add in those monumental body corp fees. And as previously mentioned, capital growth hasn't moved, at least for the little ones that I have been looking at. In fact the entry level price appears to be slightly cheaper than when I looked back in 2002!

To get any half decent sized apartment with a carpark there, you would have to spend some big pinga's. Much better places to stash $ in my opinion. Happy to be proven wrong though, I just don't see value for money.

cheers
$imon

Gryffyn
13-05-2004, 05:33 PM
Unlike residential or coastal property, there is plenty of scope to make more apartments. Price rises tend to be short-term blips when demand temporarily exceeds supply or just the cost of building rises as those resources are in demand.

Easy to have large flat spots in market as per Metropolis etc.

Plenty of horror stories about the guaranteed returns for 2 years etc but after that low occupency or reduced rates + high body corp.

Better and more stable investment in commercial property. Much better class of tenents.

Lawso
13-05-2004, 08:40 PM
quote: Better and more stable investment in commercial property. Much better class of tenents.

Or in listed property trusts/companies - KIP etc.No tenants, no hassles, no mortgage, steady income - admittedly little capital gain, but one can find that elsewhere if that's what you want - your own home and growth stocks like FPA.

In property investment, I know which I prefer.

truedragon
13-05-2004, 09:39 PM
I own a one bed apartment at Metropolis with a carpark, paid a fortune for it. I really bought it on impluse and the view and the fact that I am still a bachelor who like a bit of a nite scenes. I would be much better off if I had bought a property with land aye. But then again, I had fun while I lived in it. At the moment, rented out as a corporate apartment. Return is so so la.

Tim
18-05-2004, 03:41 PM
Where is the demand the most, for studio, 1bdr, 2bdr. Is a car park impt for resale.
A view impt?
Thanks for your thoughts so far.

Capitalist
30-05-2004, 01:17 PM
Just been to look at Metropolis...the 2 bedroom apartments are bloody palatial, with great views.Even the studios are good. Buy in gloom :D

Gryffyn
30-05-2004, 01:35 PM
Have a look at Phoenix on Grafton if there are any available!

Lawso
30-05-2004, 01:35 PM
What sort of prices, Cap?

Capitalist
30-05-2004, 02:27 PM
Thanks Gryffyn--I'll take a look at those. Lawso, the 2 bedroom ones were about 700k. There is no way I would be paying that. If I was to put in an offer if would be for 200k less than the asking price.

Lawso
30-05-2004, 03:59 PM
Agree 700k is too high. At 500-550k I could be interested.

willy_wonker
31-05-2004, 12:44 PM
quote:Originally posted by Capitalist

Just been to look at Metropolis...the 2 bedroom apartments are bloody palatial, with great views.Even the studios are good. Buy in gloom :D



There will be plenty of gloom to come.

donner
31-05-2004, 04:56 PM
Does anyone know what a deposit bond is? and where can I get one?

31-05-2004, 05:38 PM
Donner the developer of the property can usually tell you if any one is issueing deposit bonds on his projects. They are getting pretty hard to get in australia at moment. because of the glut and falling apartment prices. to best of my knowledge. hope this helps.

JBmurc
31-05-2004, 08:29 PM
[?]wouldn,t live in auckland if ya payed me [xx(]80sqm units for 400 odd grand[xx(][xx(] the internal garage in the house i built&sold in queenstown 5brm,3bath was 70odd sqms[:0] whats in that water u guys drink [?] 6%returns[xx(]interest rates on the up[xx(]capital grow for aucks 5/8 or F all[?]

Lawso
01-06-2004, 08:40 AM
aspex

You misunderstand me. I'm no property punter. I'm quite heavily into PFI and KIP and comfortable with both. Also got LPTs in Aust. It's my preferred form of investment in property - OK income, modest growth, while I look to other stocks for, hopefully, capital gain.

Was only once ever a landlord. Never again. I could be interested in Metropolis or other apartments only if and when I've sold the waterfront apartment I live in.

JBmurc: You don't know what you're missing!

JBmurc
01-06-2004, 09:11 AM
yeah for a safe investment PFI-KIP are a great way to invest in property as are other LPTs-INVESTED in KIP yrs ago sold 1.04 divs good.
but for me i don,t mind taking the risk of building&selling or holding property the gains can be huge last yr 500% this yr looking at a 150-250%return on money invested in company;)

JBmurc
01-06-2004, 09:49 AM
JBmurc: You don't know what you're missing!
if your mean missing in auckland i liked to know[?][?]
-if its veiws i don,t think so the top of queenstown hill got pently
-if its restaurants&nightlife i don,t think so 100+
-if its things to do ADVENTURE CAPITAL RING Any BELLS.
-if its millions of people&shops yeah we don,t have that but a least twice a year i cach a 5min taxi & 2 hour direct flight to syndey to get my rat race fix .:)

halcyon9
13-12-2004, 03:38 AM
how has this topic shaped up recently...

whats the story now??

wait?

some good deals coming up?

Halebop
13-12-2004, 08:38 AM
In Auckland supply is still pouring out from developers. As apartments are largely bought by investors and immigrants and largely occupied by students and immigrants it will be sensitive to interest rates and immigration.

I'm not real hot on this sector but for my money I'd wait until you are reading about developer bankruptcies and reckless supply and lending practices. There were quite a few bargains around during the previous apartment slump and I don't think we are there at the moment.

Bling_Bling
13-12-2004, 10:58 AM
We have plenty of land and a small population, so why live in apartments if not to keep up with the trend from watching American TV shows?

Halebop
13-12-2004, 11:50 AM
Until very recently I lived in 2 different apartments in Auckland's CBD and I loved it. Both were quiet and spacious character apartments in very central locations. The 5 minute walk to work was my most taxing commute. It had close proximity to everything I do regularly - art galleries, movies, restuarants, work. ...and I actually saved money living there because I no longer needed a car.

We now have a cat so that precludes apartment living but I'd go back to it in a moment otherwise.

Longtack
13-12-2004, 12:20 PM
The Cat as a factor in lifestyle choice Halebop - indeed it's a reality.
Paper Tiger will be pleased.;)

peterafaj
14-12-2004, 04:41 PM
Hi WSheridan

Re Metropolis

There was a two bedroom apartment advertised on the 26th Floor

How does one establish a value for it ?
What are the Corporate fees ?

What is the availability of carparking?

Would you live there ?

Cheers

Peter

duncan macgregor
14-12-2004, 05:11 PM
PETERAFAJ, establishing the worth of a property is easy especially an apartment. It all reverts to mathematics. 10pc deposit and lever your position with 90 pc finance. Will the rent cover all out goings or not?. If the answer is not then the price is to high. A lease or gov tenant is best. If inflation increases your mortgage then the rent goes up and the value goes up so inflation is great if you remember to have enough behind you to cover the short term increase. Since house and apartment prices increase at lets say 10 pc pa on average you are on a winner if you buy right useing other peoples money and only pay the interest. Been there done that its a dopes way to get rich. best of luck macdunk

Mr_Market
14-12-2004, 05:28 PM
quote:Originally posted by Bling_Bling

We have plenty of land and a small population, so why live in apartments if not to keep up with the trend from watching American TV shows?


You obviously don't live in Wellington[:0]

pearljam
14-12-2004, 09:27 PM
This is when property gets fun, all the emotional purchasers of the last couple of years who took "leverage" a couple of steps too far suddenly get put under pressure. Lets face it the general population ain't to bright, they are all fixing even while Mr Bollard and most other economists who are reasonably in the know are saying that this will be the last rate rise.
Personally i believe now and for the next two to three years is the best time to be looking, auction sales are down,the time to sell is rising and the general media is predicting doom and gloom.
I don't believe there is ever a good or bad time to buy, only a good purchase, a couple of posters on this site said it, if you manage to purchase a good quality apartment for 15%+ undervalue i don't believe you can go wrong. There is so much Sh#t being put up in the city that you will survive and prosper. In the two and a half years that the company i have worked for has been there, there have been five apartment buildings go up and all of these have been boxes.

Just remember that several things are being looked at:

1. The government will make sure that some changes are made relating to depreciation
2. Apparently the IRD are looking into people who have sold 5+ properties in the last two to three years even if they have resided in them(don't know if this is true but came from a good source)
3. Long-term i have been told that stamp duty may come in. I have a guy who I trust who does quite a bit of asset planning for some of the people spoken about on this site and he specialises in property. I asked him if he could see CGT being bought in and he said no but he did believe that stamp duty would come in at some stage. Again only an opinion but make sure your calculations aren't too tight.

I'm personally still focusing on home and incomes at the moment which need some cosmetic detail fixed up as i believe that i can get both the cashflow and the gains that i'm after

Good Luck

moimoi
14-12-2004, 09:34 PM
peterafaj..........best way to assess value is to get hold of some sale statistic's in the building.(call an agent...or a valuer)

-2 bed on the 26th floor i imagine your looking at 450k+...possibly up to 600k depending on what shape it is...ie: an 03 or an 08
-body corp is high in this building as part of it is run as a hotel.
-if you want a c/p then you'll pay another 55k for one.(and there are bugger all available)

duncan macgregor

-i would look forward to your posting when you've located an apartment that will self service at 90% finance..(thats in a reasonable building). There are not many about....
95% is available on some of these apartments...westpac will give to most folk 95% on H47 for example....westpac's property finance boys funded the developer so they need to get their dough back from the end purchasers.


cheers
moi

Bling_Bling
15-12-2004, 07:27 AM
If you have bought into a property 2-3 years back, you would have at least made over 100% capital return. Who has made that much in an apartment investment apart from the developers?

Halebop
15-12-2004, 09:21 AM
Four years ago a former work mate of mine bought a studio apartment at mortgagee sale for about $110k using 10% deposit. About a year ago he told me it had been valued at $150k. Also been returning cash at gross 10% on the purchase price. The return would have to be well over 100%.

Pleased with his efforts he bought another small apartment off the plan about three years ago. This cost him around $125k on a $16k deposit (12.8%). Although he calculated gross cash returns at 10% this one has been vacant quite often and he's only acheived 8% but it's still almost been self funding. Valued about a year ago at 140k. Although cashflow negative this one still managed a 100% return.

I'm not enthused with the outlook at the moment but he is taking a very long term view and his debt exposure is still quite low in absolute terms rather than ratios. He's on the prowl for a couple more.

duncan macgregor
15-12-2004, 03:15 PM
MOIMOI, look about ask the questions failng all that see me. macdunk

Bling_Bling
28-09-2005, 06:26 AM
The apartment market is stuffed. Wont be long before it is all over. Abit like the Gold Coast a few years back. Doggy developers and sales techniques follow with dumbass investors who think they are getting a bargain.

duncan macgregor
29-09-2005, 06:39 AM
The apartment market is not stuffed as you say, but is starting to come right for the buyer. Anybody with half a brain would have got out at the top to sit on the sidelines, waiting on the opportunity to buy at the bottom. Every thing works in cycles, buy at the bottom sell at the top. Higher inflation, looming slow down in the market, bargains from forced sales. The real people in property are starting to sharpen the pencil and get the sums right, and will lay off buying until the price is right. Understanding the cycles is easy, look up the past, it is all a big merry go round, knowing when to jump on and off is the secret. Nothing rises fast forever without a correction.
macdunk

quote:Originally posted by Bling_Bling

The apartment market is stuffed. Wont be long before it is all over. Abit like the Gold Coast a few years back. Doggy developers and sales techniques follow with dumbass investors who think they are getting a bargain.

willy the plunger
30-09-2005, 11:56 AM
Studios of around 30 square metres which were originally being sold for around $150,000 are now only worth about $100,000

http://www.tvnz.co.nz/view/page/411415/614362

When they get alot cheaper I will buy some and there will be some good money to be made in the medium/longer term.

WTP

duncan macgregor
30-09-2005, 12:18 PM
WILLY, bide your time, wait on interest rate rises, the falling NZ dollar, and mortgagee sales. The correction must come. The sellers are selling in a dropping market. macdunk

willy the plunger
30-09-2005, 03:25 PM
macdunk

Yes, that is my intention. I am now out of all my residential properties (except my personal dwelling - which is also mortgage free). I'm fully cashed up except for a couple of commercial properties.

Just trying to decide the best thing to do with all this cash if the NZ dollar is shaky. Any brilliant ideas?

Current term deposits offering 7.04% - 30 days. 7.12% - 60 days.

WTP

duncan macgregor
30-09-2005, 08:28 PM
WILLY, You and i both know that the time always comes to stop swimming. start to paddle water, then take your bearings. Nothing rises forever corrections make smart people rich, and dumb people broke. macdunk

BRICKS
02-10-2005, 03:16 PM
Right which is the best Auckland suburb South of the Harbour Bridge to BUY a reasonable price Apartment min 2 bed, bathroom, car lock up..[8D]

huds
04-10-2005, 06:03 PM
City Centre offers the widest range, but I prefer parnell, newmarket area.
Other than that, theres really no where else.

Halebop
04-10-2005, 06:27 PM
There are apartment developments in other isolated areas around the city. Aside from numerous terrace developments there are bona fide high rise apartments in Remuera, Takapuna, Henderson, even Manukau. Also City fringe locations like K Road, Grafton, Eden Terrace, Grey Lynn, Ponsonby, Herne Bay.

As with Huds I like Parnell and Newmarket although I also like selected CBD locations - mostly character buildings clustering in a triangle around Albert Park, Shortland Street and Queen Street. I suspect this segment of the apartment market will hold up best because they can offer character, location and in some cases not to be built-out park view benefits all those dodgy offers along the Hobson and Symonds ridges fail to match. (in the last slump, perenial character apartment favourite "The Brooklyn" held up quite well despite some cut price offers elsewhere).

ragwort
12-12-2005, 02:22 PM
Has anyone had anything to do with NZ Finance & Investments Ltd. They are selling apartments in Auckland, they organise the finance (100%), the property etc and use tax savings as an incentive. Any comments would be appreciated.

Halebop
12-12-2005, 03:27 PM
New Zealand Finance & Investments is a subsidiary of Bluechip. I personally avoid investments that require or are sold on the basis of "tax efficiency". With real estate such an equation invariably involves you being "negatively geared", which is a nice way of saying leveraged and loss making.

If you want to invest in an apartment be patient and buy what makes sense at the front end of the equation, not the fancy stuff that involves accountants and salespeople. The high dollar is still impacting student numbers and there is plenty of supply coming online in the apartment market.

Dough Boy
16-01-2006, 02:01 PM
I am sure that Bluechip and their brethern will all offer those enticing rental and maintenance guaranttees and that wonderfully low insurance policy that only they could source for your short-term 2-year benefit, then they will cast you adrift in the real world of market rents, vacancies, property managment fees, maintenance costs and escalating insurance costs. Then to finally cream you off the price of the apartment drops!

Dazza
14-03-2006, 06:48 PM
what do people tink of apartments at albany?

patsy
16-03-2006, 10:34 AM
quote:Originally posted by Dazza

what do people tink of apartments at albany?


Very big glut of apartments over there, some of which (especially those around the Old Albany Highway) are aimed at the Asian student population, i.e., 95% at Massey Albany campus. Due to a considerable drop of Asian studnets, those apts are not driving high rents at the moment. Peak time traffic is atrocious in Albany, and with no upgrade to the Auckland motorway within our lifetime, it is likely to get worse, regardless whether you work in the City or in North Shore. This would definetely impact on demand for such properties.

Personnally, if I wanted to buy something in Albany, I would go with land only, possibly more towards Dairy Flat, and subdivide.

Tim
08-10-2006, 04:58 PM
any advice for apartment purcahses in CBD. Daughter at university. For resale what must I look for

Halebop
08-10-2006, 10:37 PM
quote:Originally posted by Tim

any advice for apartment purcahses in CBD. Daughter at university. For resale what must I look for

If you want to do it for approaching 2007 academic year I'd pick that paying rent would be money better spent than paying interest or opportunity cost on an apartment. Unless you spot a bargain / cheap mortgagee sale I don't see much scope for capital gain and for all but the crappiest apartments yield is marginal versus interest / cost of capital. I'm not yet convinced the interest rate cycle has peaked either despite persistently hopeful commentary in the media.

In terms of long term value rather than a special situation:

Something overlooking a park or sea. Don't count on planning laws or surrounding low rise buildings to protect your views. Don't be fooled into thinking it's an "investment" so these things don't matter. The kind of tenant you would prefer would like these things too.

One carpark per bedroom. Even if not needed it helps resale.

Most banks apply lending restrictions on apartment below a certain size. Depending on the lender around 35 to 40m. This reduces the scope of the purchasing market to cash buyers or people with alternate security. So avoid small apartments despite tempting yields or be prepared for slow resale.

On size also - apartment living comes with different expectations in terms of size but experienced apartment dwellers know what to look for... Storage, Convenient waste disposal, High Stud Lifts or Service Lifts, Adequate Lift Ratios, Secure Postal Boxes and Lobby, On site management, On site parking, Proximity to amenities (Think "micro proximity" - people living in the CBD only drives cars when they leave the CBD - so the right mix of shops and amenities within a few hundred metres is a huge advantage).

As a former apartment dweller I preferred character, high stud and large windows for natural ligght. Was happy to sacrifice bedroom size for living area size although character places often provide bigger rooms all round because of their lower sunk cost. People moving form the burbs to the CBD often have inappropriately sized furniture for CBD dwelling so a large living area provides attraction in more ways than one ...later once I'd tried and liked apartment living I gained an appreciation that the living area gets lots more use than in a suburban home and needs to be a refuge. Something tiny struggles to deliver this.

Tim
19-12-2006, 11:15 AM
I like advice, trying to find 2 bedroom apartment in city for 2 daughters. Cannot understand $350 will rent only a small aprtment you will likely go insane in 45m2.
Where can I get a better deal.

spector
19-12-2006, 01:48 PM
quote:Originally posted by Tim

I like advice, trying to find 2 bedroom apartment in city for 2 daughters. Cannot understand $350 will rent only a small aprtment you will likely go insane in 45m2.
Where can I get a better deal.



Can I suggest that one of the best things about leaving home is actually 'leaving home'. Going to varsity in a new town, having to find your own flat and deal with crap flatmates who eat all your food and don't pay their bills etc is actually one of the best places to start learning the realities of life. You may be doing your daughters a disservice by providing them with their own place to live.

Just a thought.

Tim
01-01-2007, 04:52 AM
Interesting to see if he does get $500 week rent.What increases property returns is leverage which is difficult to do with GPG and IFT.

arco
01-01-2007, 09:09 AM
From a US site 'Smart Choice Realty', but the figures should be similar. There are also some Estimated Appreciation Tables on the site showing end values, etc.

http://www.forsmartchoice.com/charlotte.asp

[i]Housing can be a good investment

How do stocks compare with home investment?

The National Association of Realtors reports the median existing-home price increased a little over 4 percent last year, while Freddie Mac said home values increased 7 percent in 2000. At the same time, stock indexes finished in negative territory.

However, the true return on a home investment should not be based simply on home appreciation, but also the amount leveraged. Homebuyers typically use their own money to cover only 5 to 20 percent of the home purchase price, yet the appreciation they realize is based on the total value. In other words is a leveraged buy-in.

In addition, homebuyers receive tax benefits for their investments, in the form of deductions allowed for mortgage interest and property taxes. This leveraging of borrowed funds gives housing a return far in excess of the market's appreciation.

"Housing is not a quick-in, quick-out investment.” However when purchased for the long term, housing is one of the safest investments a consumer can make. In addition to the savings accumulated through a buildup of equity and the tax advantages, a home provides shelter. Absolutely no other investment provides this benefit.

How does buying stock on margin compare, you may ask? Most people can only buy stock on 40% - 50% margin, and you cannot buy stock on margin in a tax-advantaged account such as a 401K or IRA. But for the sake of argument, let's say you purchase $15,000 worth of stock with the original $10,000. Now let's assume that the stock and the house go up in value by 7% over the next year (a likely probability in the case of the house, since the average home price in the United States has gone up 7% per year for the past 50 years.) At the end of the first year, our stock investor has made the tidy profit of $1,050 ($15,000 x 7%). Our property investor, on the other hand, has made $7,000 in equity on his or her rental home ($100,000 x 7%). PLUS the tenant has paid down some of the mortgage (albeit a very small amount in the first year). The effective rate of return for our stock investor is 10.5% on the original $10,000 invested. Our property investor has made a 70.0% return on his or her initial $10,000 investment.

Much like stocks, the yearly increase is a compounding return on investment. Unlike stocks, property rent will rise over time and the house will yield a positive cash flow (income) as well as build equity. Some stocks may pay a dividend, but it pales in comparison to the income that will be derived from property rent and appreciation over time.

Property investments also have leverage advantages over stocks. In the example above between the investors, the difference in the rate of return (10.5% stocks vs 70.0% property) is a result of leveraging. A bank or financial institution will lend you most of the purchase price of real estate since it is considered a low-risk loan. Although this money is borrowed, you as the investor do not have to share the increase in property value with the lender. In effect, the lower your domain payment, the higher your rate of return will be.

As you accumulate property and it appreciates in value, you can refinance, obtain second mortgages or use other financing methods to purchase additional property. As rents increase over time, the higher rents will most likely cover the additional equity utilized. This is an example of the tremendous advantages of leveraging available with real estate investment. In time it is entirely likely that your real estate holdings will provide the equity to purchase more property, relieving you from using your personal capital ("sash on hand") to keep investing.

Another distinct advantage property investment has over other forms of investing are the tax breaks. While your rental properties are appreci

Steve
01-01-2007, 10:26 AM
Does anyone know where to get a comparison of current market rentals vs existing rent guarantees to try and estimate the capital effect once the rent guarantees expire?

Jess9
10-01-2007, 10:15 PM
What are the most popular apartment blocks in CBD fringe (and non-leaky etc ; )??

Bel
12-01-2007, 09:08 AM
quote:Originally posted by belgarion

Find below a letter from a private seller of an appartment ...

Hi [Belgarion],

Just wondering if you are still looking and interested in an apartment.

I've had 2 conditional offers for $320k both of which have fallen through due to finance.

I've relisted at enquiries over $310k, looking at $315k being my minimum target. I've also listed it to rent and had over 200 views in 3 days, at $525/wk, with a couple of people quite interested.

Therefore if it rents around $500/wk the numbers should stack up as follows:

26000 Rent Less
3500 Body Corp
1200 Rates
Equals
21300 Per Annum Income

Divide this by the purchase price to get your return and your return is over 6.7% which is better than the average residential return of 5%.

The apartment below me just sold for $350k with an extra carpark, these being $30-$40k in this particular building. That places mine around $310k however I've spent $5k renovating it and it cost $5k per level as you went up the building, which effectively gives mine an approximate value of $320k.

Anyhow if you are still interested then please let me know.

Kind regards,
[name supplied]

Should I email him/her back and say that few investors are very interested 6.7% when GPG and IFT (both of which I hold) return 20% per annum? [}:)]


According to my property calculator you would need a deposit of ~$85,000 to make this property positively geared. ($300 a year lol). Assumming after inflation capital gain of %4.4 that will yield you a %8.39 return or IRR of %22.00

But only while the depreciation for a tax return holds true!

Tim
12-01-2007, 11:51 AM
How about details about the apartment, you never know there may be a buyer on this site. Out of interest which building is this in, how many bedrooms and aprtment size. Thanks

Steve
26-02-2007, 03:35 PM
quote:Originally posted by belgarion

Out by a couple of months ?

We bow before you...;)

Crypto Crude
13-05-2007, 04:52 AM
Ive just been over to China....
and While I was there I got a chance to have alook at a few apartments, traditional housing as we are used to is non existant (in citys), and with land ownership rights controlled by Govt, makes apartments the only real way to go ahead in the industry...
...
looking at a brand spanking new apartment Block in Harbin, 30mintues drive from central city, all Infrastructure, and motorways in place...... 70meters squared...
seems quite small, but was fairly spacious for how the Chinese live (IMO)....
190k Yuan... or 34K NZ...
could negotiate slightly better deal...
Great mate wants one and suggesting to me....
any thoughts?
[8D]
.^sc

duncan macgregor
13-05-2007, 03:59 PM
SHREWDCRUDE, Its not what we think that matters stick to the golden rules.
1,Only invest in what you understand.
2,Never ask for advice.
3,Keep your investments where you can keep close watch.
4, Learn to speak their language or you are sitting duck material.
Other than that it sounds great.:D:D:Dmacdunk

Crypto Crude
13-05-2007, 05:34 PM
quote:duncan macgregor
SHREWDCRUDE, Its not what we think that matters stick to the golden rules.
1,Only invest in what you understand.
2,Never ask for advice.
3,Keep your investments where you can keep close watch.
4, Learn to speak their language or you are sitting duck material.
Other than that it sounds great.macdunk


hey mackdadunk,
1. I understand that 34k max is cheap and no loan will be required let alone a 30yr one here in NZ
the apartment is in this area where air quality is far better than in the city... Theres like a whole shopping district being setup, and within a few yrs the whole area will be built up...

on the other Hand, then One child family means that population will be falling in the Future dramatically... so excess apartments... still wondering if this could be offset by higher wealth,(so prices rising) through large GDP growth expected to continue...

as for renting it out, Id be likely to get 220 Yuan per week or just over 40bucks
don't have to pay deposit until October...

2. I don't stand by this suggestion at all... thats just rubbish... im just a kid growing up and if I didnt ask for advice then I wouldnt be where I am today... maybe a wiser head like yourself doesn't need suggestions... But if thats the case then why do you post at Sharetrader mackdadunk?... personally Im here to give a few tips as well as feed off other posters... surely you have invested off someone elses recommendations!... I have!


3. Yes I would be living there if I got it...also friend would have the apartment next door, so between the two its in safe hands...

4. found a chinese girl to teach me the goods...also great friend who I trust dearly is fluent translator...

sound advice bar #2...
[8D]
.^sc

coge
13-05-2007, 08:50 PM
Shrewdie, you can't go wrong for 34K. At the very least look at it as an educational opportunity. Go for it.
;)

duncan macgregor
14-05-2007, 08:45 AM
quote:Originally posted by coge

Shrewdie, you can't go wrong for 34K. At the very least look at it as an educational opportunity. Go for it.
;)
Dont give my mate the wrong advice when all he needs is a kick up the backside to make him see sense. He goes over to china gets his leg over, and she is all out to get him nesting. KEEP RUNNING MATE STUFF THE APARTMENT[:0][:0]. They are all the same mate regardless of which way their eyes are pointed, You will be drying nappies out the bloody window if you dont come right. Macdunk

Crypto Crude
14-05-2007, 11:43 AM
quote:duncan macgregor-Dont give my mate the wrong advice when all he needs is a kick up the backside to make him see sense. He goes over to china gets his leg over, and she is all out to get him nesting. KEEP RUNNING MATE STUFF THE APARTMENT. They are all the same mate regardless of which way their eyes are pointed, You will be drying nappies out the bloody window if you dont come right. Macdunk


Mackdadunk...
she has nothing to do with it... all I said was that I have a girl to teach me Chinese so I wouldnt be a sitting duck as you say with the language barriers....
and infact I never met the chick in China, she is from my home city..
CHCH...
The girl doesnt even know about the apartment...
nor shall I tell her or anyone else wanting to latch on SC...

mackdadunk, the only nappies I'll be drying are yours after NZOOD get exercised in the money[:p]
:D
.^sc

Brut
14-05-2007, 12:14 PM
Hey Shrewd Crude, you only live once so go for it!

My suggestion would be to go and live there for 6mths before buying the Apartment. I'm sure after 6mths you'll know whether China is the place for you...

There will still be Apartments for sale like the one you mentioned & you won't be tied to anything. If I was your age again, I think I'd travel the world before getting married & having kids (& changing nappies as Macdunk would say)

duncan macgregor
14-05-2007, 12:21 PM
quote:Originally posted by Shrewd Crude


quote:duncan macgregor-Dont give my mate the wrong advice when all he needs is a kick up the backside to make him see sense. He goes over to china gets his leg over, and she is all out to get him nesting. KEEP RUNNING MATE STUFF THE APARTMENT. They are all the same mate regardless of which way their eyes are pointed, You will be drying nappies out the bloody window if you dont come right. Macdunk


Mackdadunk...
she has nothing to do with it... all I said was that I have a girl to teach me Chinese so I wouldnt be a sitting duck as you say with the language barriers....
and infact I never met the chick in China, she is from my home city..
CHCH...
The girl doesnt even know about the apartment...
nor shall I tell her or anyone else wanting to latch on SC...

mackdadunk, the only nappies I'll be drying are yours after NZOOD get exercised in the money[:p]
:D
.^sc
Thank goodness for that shrewd one, I was a worried boy for a moment or two.[^]:D:Dmacdunk

wns
14-05-2007, 08:14 PM
quote:Originally posted by Shrewd Crude

Ive just been over to China....
and While I was there I got a chance to have alook at a few apartments, traditional housing as we are used to is non existant (in citys), and with land ownership rights controlled by Govt, makes apartments the only real way to go ahead in the industry...
...
looking at a brand spanking new apartment Block in Harbin, 30mintues drive from central city, all Infrastructure, and motorways in place...... 70meters squared...
seems quite small, but was fairly spacious for how the Chinese live (IMO)....
190k Yuan... or 34K NZ...
could negotiate slightly better deal...
Great mate wants one and suggesting to me....
any thoughts?
[8D]
.^sc


Hi SC,

What's your reason for buying the apartment (if you do in fact buy it)? To rent it out an earn a cash flow from it? Or to make a capital gain? Or both?

220 per week on a 190,000 rental price is a 6% gross yield. You could earn that by putting your money in a bank term deposit (with less hassle).

Then you've got expenses...

- Property management fee?
- Body corporate?
- Insurance?
- What's the likely vacancy rate?

How much is left over after those expenses are subtracted from the rent you receive and what return does it represent on your investment?

I suspect it will be less than 4%. Is that acceptable for you?

From that point of view, even though its "only" $NZ 34k, it doesn't seem like a screaming buy to me.

What yields are investors are purchasing at?

What are the factors that will affect the future possible price of the apartment? Will they have a positive or negative affect on the future value?

Those are the questions I'd be asking.

I have no idea what the future price of the apartment will be but from a yield point of view, I wouldn't buy it.

Hope this helps.

Crypto Crude
14-05-2007, 08:55 PM
good questions WNS...
I can't answer all of those Q's...
I never went there to buy an apartment... and I had bugger all time to look into it further, as I was there on other dutys...

I'd be looking at living in it to start off with, and then sell the thing when I left after a few years..... I have met a few contacts and would be well looked after with a real decent job....... wages probably on par with NZ when taking into a/c exchange rate, but far higher than what the rest of their Pop earns...
same wages but can save a hell of alot more as its so so cheap to get by there...

I don't have my heart set on it... but im thinking about it, thats all... I'm likely to re-visit next year...

management fees-with my friends family living next door there would be no property managment fees...
4% would not be acceptable for me, It would be all about future expected capital gains...
rubbish apartment in the city much smaller 50M^2 200k Yuan...

the Chinese are only getting richer over time...

the apartment block is being sold off in two stages and the first stage is almost sold out...


quote:What are the factors that will affect the future possible price of the apartment? Will they have a positive or negative affect on the future value?
as I mentioned in one of my earlier posts there are numerous positive and negative future effects that could swing this one...
including the Beijing Olympics...
moving away from a fixed exchange rate into floating would be good as currency is held undervalued by Govt...
There is a growing number of Chinese who are now becoming alot more wealthier and is set to continue...
increased foreign workers coming into country...
and my unexperienced mate reckons this area will be real built up over time...
major highway around the corner...
hospital around the corner...

negatives- falling population due to 1 child policy...

cheers for your feedback...

cookiemannz
15-05-2007, 08:00 AM
What are peoples thoughts on the Metropolis nowadays? What seems to be the market rate of a 1 bedroom apartment in metropolis? If I was to buy there I would live in there myself.

Does anyone see an increase in demand for the apartment market? Would a successful Americas cup challenge or the rugby world cup 2011 make a difference?

Last question, has anyone dealt with Apartments in Auckland? What are they like? How much do they charge in commission if I was to rent the place out for a while?

Appreciate any comments on this

patsy
15-05-2007, 06:26 PM
quote:Originally posted by cookiemannz

What are peoples thoughts on the Metropolis nowadays? What seems to be the market rate of a 1 bedroom apartment in metropolis? If I was to buy there I would live in there myself.

Does anyone see an increase in demand for the apartment market? Would a successful Americas cup challenge or the rugby world cup 2011 make a difference?

Last question, has anyone dealt with Apartments in Auckland? What are they like? How much do they charge in commission if I was to rent the place out for a while?

Appreciate any comments on this



In the Viaduct Harbour, a $950K two bedroom apartment drives a rental of $650 pw. Body corporate is $15K pa. Absolutely ridiculous as an investment.

arco
17-05-2007, 06:40 PM
They are still asking amazingly high prices in Aus (Sunshine Coat)for old apartments.

These were $100k cheaper last year at this time - now $399,000 aussi$

http://www.raywhite.com/objects/props/3056/104003056,20070514142650,p,5,RayWhite-Image-m-400-300.jpg

http://www.raywhite.com/cgi-bin/rsearch?id=104003056&a=o&header=

peat
18-05-2007, 08:12 PM
re Metropolis
http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?search=1&mcat=0350-5748-&sidebar=1&132=PROPERTY&selected135=&selected136=&134=&153=Metropolis&29=&122=0&122=0&49=0&49=0

CJ
22-05-2007, 07:16 PM
quote:Originally posted by cookiemannz

What are peoples thoughts on the Metropolis nowadays? What seems to be the market rate of a 1 bedroom apartment in metropolis? If I was to buy there I would live in there myself.
Have you been inside one. They were too hotelly for me (large bathroom, tiny kitchen, bedroom and lounge) though I only looked at a smaller 1 bed which was in the hotel pool.


quote:Does anyone see an increase in demand for the apartment market? Would a successful Americas cup challenge or the rugby world cup 2011 make a difference?

If we win the americas cup, and they hold it in Auckland, the effect will be huge. Rugby WC is too short term though will be good if you go on holiday for that period.


quote:Last question, has anyone dealt with Apartments in Auckland? What are they like? How much do they charge in commission if I was to rent the place out for a while? It will be between 7-9% depending on who you get to do it.

peat
25-05-2007, 09:57 AM
quote:Originally posted by CJ
They were too hotelly for me (large bathroom, tiny kitchen, bedroom and lounge) though I only looked at a smaller 1 bed which was in the hotel pool.

Yes that was my impression too when I was apartment shopping back in 2002.
For a home - even if its an apartment - you need some character.

rmbbrave
30-05-2007, 08:54 PM
Investors losing out on apartment sales

5:00AM Wednesday May 30, 2007
By Anne Gibson

Many Auckland apartment investors are taking big price drops, a trend one agent has blamed on units having been over-priced in the past.

Martin Dunn of City Sales said the sector had been dogged by overly optimistic valuations and wild rental income predictions.

Buyers - including Southland farmers - had been lured into Auckland's once-booming apartment market by promises of big money, but Dunn said investors were experiencing large losses when they found the rental predictions were far too high.

These people were now leaving the sector sorely disillusioned.

"The main market is quite buoyant but there is still the fallout from the spruikers and appalling valuation practice by some valuers," Dunn said.

Damian Piggin of Ray White City Apartments said prices in most apartment categories had risen in the past six to eight months, although the bottom end of the market was still stagnant.

He is selling eight 75sq m Quadrant apartments beside the Hyatt on Waterloo Quadrant for Melview Developments, asking $499,000 each.

Dunn said ill-informed investors had bought units off the plans and relied on valuations and income projections from developers which had been proved wrong, he said.

The investors had often attended seminars or been swayed by investment or financial advisers, promising big personal income tax deductions via apartment investment, Dunn said.

But rising interest rates and lower-than-promised rental returns were forcing many people to sell and causing financial hardship.

He cited the example of a "very plain two-bedroom unit" at 36 Eden Cres up for auction today.

"The owners bought it about three years ago for $266,000 and were told it would rent for $500 a week. This was never going to happen. The tenant is paying $310 a week. The reserve has been set under $150,000," Dunn said.

The vendor could lose $116,000 on that unit, he said. Even if bidding reaches the reserve and the place sells for $150,000, the vendor will still lose a large amount of money, Dunn said.

Sale and auction costs of $15,500 would mean the vendor's total loss could be nearer $130,000.

City Sales was getting units like this offered for sale daily, Dunn said.

"It never fails to amaze me how the public deal so readily with salespeople who are not real estate agents and that this practice continues. It would not happen if the valuation profession had not prostituted itself by allowing the intellectually dishonest practice of comparing one off-the-plan sale with another, completely disregarding the existing market and blindly regarding the purchasers as informed."

He said a basic principle of valuation was to deal with a willing vendor using prudent marketing and a willing and informed buyer.

Yet he said many buyers were grossly uninformed.

"A Southland dairy farmer at a spruikers' tax seminar is hardly informed on Auckland's apartment market, I can tell you, because they end up coming to me," Dunn said.

City Sales sold a two-bedroom unit in the Railway Campus in Auckland's Quay Park precinct without any reserve this month because Dunn said the units were so hard to sell.

An investor had bought the unit for $76,000 in December but got only $44,000 for it this month.

That amount was reduced further because City Sales charged a minimum $11,500 commission plus the $4000 auction fee. Dunn said these properties were hard to sell.

A disadvantage of the Railway Campus units was that they were on leasehold land with ground rent reviews coming up in 2011. Returns on these units are low and many investors in this complex have had big losses.

Ian McGowan, a director of the valuation practice of Seagar & Partners, also said many apartments had dropped in price.

"Over the last three or four years, the apartment market has been dominated by people selling off the plans, which has created a two-tier market. Prices paid for off-the-plan units were at a premium over and above the secondary market."

G

CJ
30-05-2007, 11:14 PM
It would be good to get a balanced article (we can dream).

Everyone knows there are lots of crap appartments out there. But why dont they review resale prices for Metropolis/quay west/viaduct.

I dont know what the results would be but it would be interesting.

cookiemannz
26-06-2007, 09:09 AM
Go the Americas cup - 1 all. Bring it home boys.

Does anyone have any historic figures on Pre AC, during then post AC Auckland Apartment prices and rental prices?

Anyone heard any stories of outrageous rental prices during the last AC in Auck?

Appreciate your thoughts

peat
26-06-2007, 05:50 PM
yeh apartments in my building were being s/t leased for twice the std rental back then.

Arbitrage
12-07-2007, 12:34 PM
If you want to learn about apartments in a mature market, go and spend a week in New York. Two points emerge and it is showing up in Auckland now as the secondary market develops.
First is the precinct or neighbourhood. In Auckland the area around the High Court and Viaduct are the prime apartment spots. Upper Hobson and Nelson Sts are not so prime.
Second is the building itself. Talk to various apartment building managers and they will tell you which are well run and which are "Party" apartment buildings. And don't be fooled that "character" ie older buildings are better. Some are old store or office conversions with wooden floors and thin walls that transmit sound throughout the building. Some of the character buildings however were purpose built and are worth a serious look.
There will always be a demand for quality apartments which in turn drives the prices. Do your homework. Ignore the rest, buy the best.

Tim
12-07-2007, 03:50 PM
how about compiling a list of these quality apartments
Quay West
Metropilis
Statesman

Who else shall we add.

CJ
12-07-2007, 09:36 PM
Heritage
1 Hobson
Scene 1-4
Princes wharf
Viaduct ones.

Arbitrage
17-07-2007, 07:48 AM
Good Historical Apartment Buildings:
Westminster Court (Parliament St)
Brooklyn (Emily Place)
Shortland (Shortland St)

JBmurc
22-10-2007, 09:57 AM
I'm current sold out of my southland investment propertys for a good gain and am now quite keen to invest a small amount back into decent rental property whats the views on the auckland apartments which seem to be under alot of selling pressure now.
Would like at least a %8 yeild(I can get in Invercargill)

---Could there be a good mid-term bargins in the CBD aparts---------------------


CBD apartments hammered
5:00AM Thursday October 18, 2007
By Anne Gibson

Only one out of eight Auckland apartments auctioned yesterday sold for more than the previous sale price and three units received no bids, further signs of a decline in the apartment market.

A Mount St unit sold for $10,000 above its previous price but the units passed in all failed to reach reserves set by the vendors.

Other units auctioned by City Sales at the Hopetoun Alpha on Beresford St sold for less than the vendors had paid.

A studio unit in Queen St's City Life Hotel sold at yesterday's auction for $100,000. Mike Richards, sales manager at City Sales, said the vendor had previously paid far more for the level-19 unit leased to the hotel.

A one-bedroom unit in the 40-level Harbour City block on Gore St which had sold off-the-plans for $270,000 three years ago yesterday fetched just $196,000.

Yesterday's auction came after a string of low-priced sales in the last few months and Hanover Group's move to quit 92 units in Vincent St. Hanover put these up for tender after problems recovering its money.

Martin Dunn of City Sales said it was only units sold off the plans which were fetching low prices and other apartments were selling at good levels.

Bidding was strongest yesterday for a two-bedroom unit in the high-rise Mount Terrace block at 33 Mount St in the CBD. That unit on level 13 previously sold for $195,000 but yesterday fetched $205,000.

Three units passed in after vendor bids were placed with auctioneer Neil Newman were:

* A two-bedroom unit in Santa Fe at 21 Day St in the CBD. Vendor bidding on this place with one carpark got to $325,000 when Newman announced the reserve was not met. The owner bought it in July 2005 for $223,500.

* A one-bedroom unit with two carparks in a leaky project at 3 Morningside Drive in Kingsland was passed in after a bid of $155,000. The owner bought it in March 2002 for $158,000.

* A ground-floor two-bedroom unit in Eden Apartments at 32 Eden Cres in the CBD got to $140,000 before Newman passed it in. The owner paid $188,000 for this unit in June 2002.

Newman drew the auction room's attention to a clause in the Kingsland unit's auction sales contract which protected the current owner against litigation from a buyer over leak issues.

It said the buyer must sign off a clause stating they had been advised that there were extensive remedial works to be undertaken, so would release the vendor from warranties relating to structural integrity, water damage and weathertightness.

Year of the Tiger
10-11-2007, 05:00 PM
I've been starting to look at the Apartment market in Auckland and have come across a block (3 years old) with a couple of Apartments for sale. These are leasehold title (I'm really only interested in freehold), but I thought I would check them out anyway. Currently there is a tenancy agreement with Housing New Zealand Corporation (HNZC) who manages the tenancies on behalf of the owner. Rent is guaranteed every week regardless of whether the property is empty or tenanted and they pay the maintenance costs.

I'm really just wondering if anyone on here has had any experience with these types of arrangements or has heard any stories (nightmare ones or not) that they might share.
Thanks and cheers
YOTT

duncan macgregor
10-11-2007, 05:58 PM
I've been starting to look at the Apartment market in Auckland and have come across a block (3 years old) with a couple of Apartments for sale. These are leasehold title (I'm really only interested in freehold), but I thought I would check them out anyway. Currently there is a tenancy agreement with Housing New Zealand Corporation (HNZC) who manages the tenancies on behalf of the owner. Rent is guaranteed every week regardless of whether the property is empty or tenanted and they pay the maintenance costs.

I'm really just wondering if anyone on here has had any experience with these types of arrangements or has heard any stories (nightmare ones or not) that they might share.
Thanks and cheers
YOTT YOTT, I bought a 3brm brick&tile at a mortgagee auction about five years ago. I leased it to the housing corp. I never went near it. I sold it to my daughter who visited the place twice once with a valuer to on sell it which was no problem. The housing corp were very good with us no problems whatsoever. Do the numbers if it makes sense then buy it. Be very carefull lots of leaky apartment buildings about. Exterior concrete or dont even think about it. Macdunk

Year of the Tiger
10-11-2007, 06:32 PM
YOTT, I bought a 3brm brick&tile at a mortgagee auction about five years ago. I leased it to the housing corp. I never went near it. I sold it to my daughter who visited the place twice once with a valuer to on sell it which was no problem. The housing corp were very good with us no problems whatsoever. Do the numbers if it makes sense then buy it. Be very carefull lots of leaky apartment buildings about. Exterior concrete or dont even think about it. Macdunk

Thanks Macdunk, I was curious about the standard of tenant that housing corp put in (I know, I know, that is not very pc), but nice to hear your views. I will do the numbers and the research...thanks,
YOTT

duncan macgregor
10-11-2007, 06:46 PM
No problems with bad tenants the housing corp fix all malicious damage at their expence you are only up for general maintanance redecorating etc. Macdunk

Serpie
10-11-2007, 07:15 PM
I like the sound of that MacDunk.
I've got an ex- state house that is becoming vacant in the new year. I've just been checking the Housing Corp's website, and I think it may match their criteria nicely. I'll give them a call and see if they're interested. It would be nice to have a guaranteed tenant for the next 5 years.
Thanks for the tip.
Serpie

Arbitrage
12-11-2007, 03:56 PM
I recently heard from owners in an apartment building in central Auckland who were concerned about the values of their apartments being reduced because one of the landlords had sublet to Housing Corp. This was in a quality building that had solid values in a good precinct. Can letting to Housing Corp do this or were they over reacting? Do Housing Corp tenants pay the market rents in these situations or are they subsidised?

AMR
22-10-2009, 09:07 PM
Been a while since the last post here.

IMO still an overhang in the market, but once that's gone, prices will rise due to zero new supply entering market. Even the shoeboxes.

peat
22-10-2009, 10:10 PM
Especially the shoeboxes. it may take a while but if shoebox demand grows then there just wont be any new supply at all to match it. quite straightforward to figure the markets response to that situation. regulation generally affects markets - and often not in the way the regulators intended.

Dr_Who
23-10-2009, 09:49 AM
Just watch the body corporate clauses and costs. Dont touch leasehold.

AMR
25-10-2009, 01:48 PM
Peat you sound like you have some experience with this. Have you been buying lately? Which buildings are you keen on?

peat
25-10-2009, 10:55 PM
AMR
I own and live in a AKL CBD apartment (not a shoebox , but a large studio) so I am interested in the market to some extent. I only have the one though, so I dont have a landlords perspective, just what I see going on around me.
Prices never really dropped much in my building, and that statement is based on actual sales. Rental demand remained strong - there was occasionally a ' for rent ' sign go up but never for long.
But its an east side 'character' building so I think that makes a difference as they dont tend to build true character anymore.

re the small apartments , while there may be some financing issues i.e larger deposits are required if using bank financing, I just think that in the largest city in NZ there will always be a market for cheap accomodation especially central and so if the rules prevent any more being built then demand is likely to at some stage outstrip supply supporting rents and prices in reasonable buildings no matter their smallness.
No one wants to live cheaply on a permanent basis but some people choose to while they eg study or save for other things. A number of landlords on this website have said that its best to own cheaper buildings as the yields are better.... so it might not be wrong to apply that to apartments as well.

Arbitrage
27-10-2009, 12:06 PM
I think you will find that a lot more of the character apartment buildings on the east side of Auckland cbd are occupied by their owners. This usually means the buildings are better managed and the apartments values are more stable.

The "shoebox" apartments were often designed for student type accommodation. When the downturn in the language schools intakes occurred, the values of many of these apartments plummetted as they sat empty. I attended a recent auction of some of these and there was mayhem as bidders were valuing them on rental yields which appeared quite high. However i wonder about how long these will be sustained. I also wonder how much major mantenance (ie cost to owners) will be requred in the medium term for some of these blocks. Some of the buildings are alearedy looking run down.

No wonder the banks are being cautious.

AMR
27-10-2009, 10:57 PM
Yea a whole pile of shoeboxes on Hobson and Nelson Rd. Would prefer to buy a nice character apartment as well but the yields on them don't look as good.

Looking at one in the Ascent at the moment, just turned down on on upper queen st.

Dr_Who
28-10-2009, 06:55 AM
Becareful very with older character buildings. Due to their age the maintenance cost is very high. One example is the old hydraulic lifts that constantly breaks down. To replace an air cond unit for a 10 story building cost over $100k.

Arbitrage
29-10-2009, 07:50 AM
Yes that is right about maintenance. Also some of the old commercial buildings that were converted to apartments. The walls and floors aren't as soundproof as the old purpose built apartment blocks.
Two suggestions.
First, before you buy ask for a copy of the minutes of the last AGM of the body corporate. These can give you an idea of any issues plus look at the accounts for a decent sized sinking fund for future maintenance.
Second, make contact with a building manager of one of the apartment blocks and ask if there are any issues with the building you are interested in. Most of them know each other and they talk fairly regularly about building problems. Some of the buildings managers contact numbers are in the phone book under the building name.

CJ
29-10-2009, 02:21 PM
The walls and floors aren't as soundproof as the old purpose built apartment blocks. Or they could be better. I use to live in Brooklyn apartments and I swear the walls/floors were a solid 1 foot thick concrete. Some of the character conversions might not be the same though.

Arbitrage
29-10-2009, 02:57 PM
Yeah Brooklyn is a great example. Shortland nearby is another. There are two or three other character buildings in that part of the city near the High Court that have good reputations and apartments seem to hold their value and always have a good level of buyer interest. Great location too being close to the university and Queen St, but in a reasonably quiet part of the city.

AMR
31-10-2009, 11:04 PM
The office conversion I was looking at earlier was very nice and roomy, and also very quiet. A few of them have apparently been badly done though.

Joshuatree
08-09-2021, 04:46 PM
Remembering the petrie dish cruise ships being a wonderful transmitter of Covid, will living in apartments be similar for Delta; (currently nearly under control atp fingers crossed) when the next virus arrives. Will expensive air flow systems need to be retrofitted or xtra costed into new builds. Will apartments lose popularity or not?

Arbitrage
09-09-2021, 08:10 AM
No they won't lose popularity. There are usually no airflow systems between apartments and many body corporates have professional cleaners looking after the communal areas. The benefits of not having to commute or spend weekends doing exterior maintenance are very attractive to many people. Plus NZ will be 100% vaccinated or close to it this year.

Joshuatree
09-09-2021, 08:25 AM
Cheers.I was thinking about all the hallways.This is where they could retrofit or add aircond etc if not already there?.This is where alot of covid spreads.And I hope we get that high a % but there are quite a few anti Vax retrobates around and there will be more viruses.