Auckland’s suburban residential apartment sales volume is nearly as high as that of city fringe, suggesting the two markets remain strong with minimal supply.
Colliers International’s biannual ‘off the plan’ residential project survey covered 2151 apartments offered for sale across 25 projects in the Auckland region from 1 July to 31 December 2016.
The survey concluded the asking price per square metre for suburban Auckland apartments increased substantially by 15 per cent, compared with that of the CBD and city fringe, which increased by a modest 2 per cent.
The city fringe recorded the highest sales volume, with $144 million of sales, followed by suburban with $142m and CBD with $74m.
Will Coates, Projects Manager for Colliers International’s Residential Project Marketing Team, says the survey shows a significant shift in demand for apartments.
“Purchasers are moving away from the traditional CBD unit and looking to city fringe and suburbs for high quality apartments to replace the family home,” he says.
In the six months to December 2016, $360m of apartment sales were contracted, representing 17 per cent of the $2.2 billion total value of the surveyed projects. This is a significant reduction compared to a similar survey of the first half of 2016 with $920m in contracted sales.
Of the 25 projects surveyed, 76 per cent were under construction, 12 per cent were recently completed, and 12 per cent were being sold off the plan. This compares to the first half of 2016 survey where 50 per cent were under construction and 50 per cent were being sold off the plan.
”A lot of the projects surveyed in the first half of 2016 are now under construction, and we have noticed due to tougher development lending policies by the banks less new projects are coming to the market,” Coates says.
“The city fringe remains the most undersupplied market with less than six months’ supply.
“We are seeing a trend in downsizers wanting to stay within 5km of their family home – this is largely evidenced in Epsom’s Alexandra Park development, where 246 apartments have now completely sold out are under construction due for completion next year,” he says.