Apartments

[patsy]

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]

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/cgi-bin/rsea...56&a=o&header=

[peat]

re Metropolis
http://www.trademe.co.nz/Browse/Cate...22=0&49=0&49=0

[CJ]

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.

quoteoes 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]

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]

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]

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]

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]

yeh apartments in my building were being s/t leased for twice the std rental back then.

[Arbitrage]

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.