Apartments more popular

Central Auckland apartments have increased in price by 43% since 2000, compared to 133% for houses in the same area.

Small apartments dropped in value by 13% before the market peak in 2007.

Since 2010, the price of both apartments and houses has risen significantly but the value of standalone houses has increased more quickly than that of apartments, 33% compared to 24%.

The smallest apartments have grown in value the fastest of all units since 2010, at 34%.

But the average price of an Auckland City apartment is now $405,000, compared to $961,000 for a house, which the QV analysts said could prompt a change in buyer behaviour.

QV said there had been an over-representation of buyers who were new to the New Zealand market purchasing apartments since January 2012.

Almost 18% of apartment sales since then have been to new-to-market cash buyers, compared to only 7% of house sales. 

Multiple property owners were the other over-represented group, the data showed, accounting for 47% of apartment sales, compared to 37% of house sales.

“So while it seems that cash buyers and investors are probably dominating the Auckland City apartment market at this time, with the recent LVR limits put on the market it will be interesting to see if over the coming year or two these trends change,” QV said.

“If first-home buyers especially continue to aim for cheaper properties, and choose between either proximity to the city and property size and type then apartments may surge in popularity and value still. The dream house with a section may be forced to be something only people already on the property ladder can achieve as they look to upsize.”