City Apartments’ strong results continue in June.
Ray White City Apartments continued the pattern of success shown in May, with a strong auction clearance rate of 79% achieved in June.
Director of City Realty Group, Daniel Horrobin, says: “This comes on the back of really strong auction results in the month of May which had an auction success rate of around 87%. And negotiations are continuing on a number of apartments which went to auction with Ray White City Apartments in June, which is likely to boost that 79% auction success rate even further.
“These two months of strong auction activity are bucking the trend we are seeing outside the apartment market. A reasonable number of residential suburban properties are getting no bidding at auction but we have had active bidding in our auction rooms on every single city apartment property.”
“These results are explained by us having seen investors come back into this market in force.
“They are seeing the opportunity to get in before the gates open up and migrants and international students again come into the city in large numbers. When these groups come into Auckland their first stop is normally the Auckland Central apartment market, where they sign up to short or medium-term tenancies.”
The average sales price investors must outlay for apartments is a lot lower than that of all Auckland residential property. Renting out apartments tends to provide the highest amount of net return on investment for property investors.
Daniel says: “We track the comparison between days-on-the-market for properties that go through the auction process and properties which are sold by other methods. Even outside the apartment market we are seeing that properties not sold by auction are taking a lot longer to sell and the longer a property sits on the market the more likely it is to get a lower price.
“Yes, auction clearance rates have dropped a little compared to those achieved at the peak of the market but total sales volumes have dropped even more steeply. So, the method of sale that is still delivering the best results across the Auckland market, in terms of days-on-the-market and price, is auction.”
Ray White City Apartments’ June sales numbers were up 26% month-on-month compared to May.
“This is a very strong result for the middle of winter.”
The Auckland property rental market is continuing to correct as we head into the year with average rents continuing to steadily increase in most areas (with our own portfolio showing a 2% increase from June 2021 to June 2022). We are also pleased to report an increase in inquiry, with Trade Me reporting rentals’ ‘days on market’ have come down by five to six days across the board.
We believe that the main reason for this correction is due to an increase in immigration levels. Immigration New Zealand reported almost double the number of people coming into the country in May 2022 compared to May 2021. We predict this trend of increasing demand for Auckland rentals to continue with the borders relaxing and more students and skilled migrants entering the city.