Apartment returns down: Report

The agency, which specialises in Auckland apartments, has released data based on its own transactions since 2012. It sells about 80% of its apartments to investors.

The report shows that the average sale price of the freehold CBD apartments has increased from less than $250,000 in April 2012 to almost $400,000 in February this year, an increase of more than 35%.

But the average cost per square metre has increased a lot less and is still hovering around $5000 sq m, a similar level to what was recorded in 2012.

The report said that new builds were selling off plans for between $7000 per sq m and $10,000 per sq m.

Average rents have remained virtually static at that time, at about $350 per week and the average return for investors has dropped from more than 10% in 2012 to less than 7.5%.

The agency said investors in the apartment market did best out of studios, which are the cheapest option, because movements in rent made the biggest difference.

It said now could be a good time for investors who were struggling with apartments picked up via Blue Chip and other “seminar” sales promotions to sell.

City Sales managing director Martin Dunn said the trends shown in the report were more important than the figures themselves.

He said both sale price and dollars per square metre were rising steadily and the rents being achieved for apartments remained constant.