Late last year I wrote a report predicting the Central Apartment market would bottom out well before the housing market and in about 6 months. This was due to the large amount of positive stimulus I could see coming to Central Auckland and not other areas (students, cruise ships, tourists, office workers, etc).

Now, of course, this was just a prediction, so not guaranteed, however, the first signs of this stimulus showing itself is now happening in the rental market. - (Which I'm quietly very excited about.)

The Numbers

In January 2021 there were 1226 apartments available to rent. Due to students returning, more immigrants being let into the country and rental apartments moving to Airbnb, we are now down to only 514.

Apartments that were previously taking 3 or 4 weeks are taking days to rent and the overall level of interest is equal to or even more than pre-COVID levels. (And I don't say that lightly).

This has of course flowed through to rents levels (the foundation of apartment values) with rents being achieved currently 10 -15% higher than they were last year.

Have values gone up too?

Unfortunately, it hasn't flowed through to values. This is literally straight from the streets so very early days but I'm still celebrating. For the last 3 years we have watched other markets go through the roof and our own, go to the dogs. So this is big, the recovery has actually started and we have proof - people are flooding back and rents are up an estimated 15% !!

So, when will we have a big value lift?

This is very hard to predict as it’s not just about the fundamentals (rents, office worker numbers, foot traffic), the emotional element of the market has to be there for the fundamental pressure to be released. So, I can't see a huge bounce back in the short term. For a large value lift, we need positive sentiment in the property market, and I can't see this happening till at least after the election.

However, for Auckland Central, as the recovery continues, I do see the bottom being found in the coming months and the recovery of some of the value lost. So, some small rises in values.

The CBD has large capital gains to be realised long term and the coming stimulus will provide proof of this journey for tentative and unconfident buyers who currently sit on the sidelines.

So how do I follow the progress? 

I will be constantly looking at all kinds of measures to gauge what’s happening out there to help keep you updated and ahead of the curve. From foot traffic and rents to how many coffees are being bought among 5 coffee houses I will be looking at all types of gauges and reporting it to you each month....can you tell I am a little bit excited ha-ha.

And as always...