Overall, good news. It's not boom time by any account but buyer confidence is still going strong since the election. In fact, it's the strongest for the Auckland Apartment in 3 years.

The result, the number of Auckland apartments sold has shot up 15%.

In our world, that is a big change and very positive.

So where are we... are values going up?

Yes, in short, they are, with the largest increases (% wise) happening towards the smaller end of the market due to their values having a stronger correlation with rents. 

Remember 70% of all Auckland apartments are rented out...This also points to why each apartment category is behaving differently. 

I.e. only 20% of high-end apartments are rented compared to a whopping 95% of apartments under 30m2. 

But is this an increase in value or a recovery of value? 

I don't see this current movement as a change in value; more of a recovery of value resulting from an event that artificially lowered values in the first place. 

Remember back to 2020 when COVID struck, and lockdowns became apparent, sending the majority of the CBD population home (working visas, international/local students and tourists), with rents plummeting a whopping 20% to 30%.

We saw the average rent in our largest building go from $480 to $360 per week in months. 

Well, this artificially lowered values by varying degrees over all the Apartment categories and all while the housing market soared. 

Earlier this year, this missing population of the CBD came back, and although a different city remained, rents bounced back to previous levels by March. 

Yet values didn't bounce back at all. The current economic climate didn't allow it. 

Turns out all we needed was a bit of buyer confidence and a little bit more buyer inquiry. This recovery is happening as we speak. 

So, apartments are going to increase in value more than houses? 

I say recover value… but yes, over the next few months, they will increase more than houses. I think the latest stats show houses are expected to go up a few percent...apartments will recover much more than this. 

From what I am seeing Apartments will increase in the first half of 2024 by 10% with some categories by 20%. 

But I say again, this is a bounce back from values artificially lost...I don't see any real, measurable increase beyond this occurring until interest rates start to decrease. 

Will all complexes recover back to pre-COVID levels?

No, some will be quite a bit less, yet some possibly more.

You see, each apartment complex has been affected so differently over the last 4 years. 

Some areas still have major safety issues that weren't here in 2019. This affects values. Some are improving. Most have higher BC fees, but some are a lot higher, and for some, their location has improved or is about to, due to development. All this affects value up or down. 

So, each complex is quite different, but the good news is I see them all recovering part of their lost value, it's just each will recover by varying amounts. 

What about the further drop in value in the last 18 months? 

This is what will also hinder value recovery, but property sentiment is on the up right now, and apartments didn't reach the same inflated heights. So how much is the question, as the last 18 months did push values down further? 

This is why this is all very complex. So, while being so immersed in what I do enables me to see the trends before others, when it comes to more accuracy, in this case, I am highly likely to be out, so please bear this in mind.

But I still back myself as I have been pretty on point to date 🙂

If you have any questions about where I think your complex and apartment will get to, feel free to reach out. And don't worry if selling is not on the agenda at all, it's fine. I really do enjoy what I do and look forward to hearing from you.  

Next Month... Jan 2024 

More time equals more accuracy, I will have some more concrete numbers on the recovery as well as more insight into the suburbs where there are fewer apartments and therefore sales. 

And as always...