Apartments finding favour: Bayleys

It says activity in the market is up significantly on the beginning of last year.

For the first quarter of 2012, 340 transactions were recorded by REINZ. That's the highest figure for a March quarter since 2007.

Bayleys says the market has bounced back strongly from a 10-year low in January 2011, when there were only 44 apartment sales.

In the year to March 2012, 1340 Auckland City apartment sales were recorded, up 27% on the previous year and more than 50% up on the year to March 2010.

Median prices are also rising, now more than $200,000 - compared to the $180,000 level of 2008.

Bayleys says buyers see apartments as an affordable way to enter the city real estate market as an owner-occupier of investor.

In the year to March 2012, more than half of Auckland City's apartment sales were for less than $200,000.

Upward pressure on rentals has resulted in better returns for investors.

Bayleys researchers sayd: "An analysis of auction sales over the last year has shown freehold apartments are returning 6%-8.5% per annum net of rates and operating expenditure."