Property

Apartment market still dominated by investors

Baby-boomers might be a growing force in Auckland’s apartment market, as new Colliers research claims, but they are still far out-numbered by investors.

Tuesday, October 27th 2015

A Colliers International analysis of buyers in the Alexandra Park development shows that, to date, 82% are owner-occupiers and just 18% are investors.

It also shows that 79% of buyers were 45 years of age or older – and 37% were older than 60. Just 21% of buyers were under 44 years old.

Pete Evans, who is Colliers International’s national director of residential property marketing, said the Auckland apartment market has come of age with baby-boomers increasingly attracted to apartments.

“I think a lot of people still presume those buying apartments are investors wanting to put the likes of students in them or young people who can’t afford their own standalone house.

“These numbers blow those out-of-date perceptions out of the water.”

Until recently, many thought apartments were the domain of the young, were too small and not a good option for the average middle-class middle-aged Aucklander, Evans said.

“Twenty years on and it’s the baby-boomers who are the largest growth market.”

However, these claims have been disputed by one of Auckland’s apartment experts.

Apartment Specialists’ Andrew Murray said the Colliers data might be correct when it came to new high-end apartment developments on the fringes of the central city.

But he said it was incorrect when applied to the Auckland apartment market overall.

“Baby-boomers are attracted to the high-end apartment developments springing up in places like Mt Eden, Grey Lynn and Greenlane. For many, it means they can downsize but still move to another property in the community they are established in.

“They can afford to do it. But those new developments are well out of the price range of most first home buyers, while for investors they don’t offer the returns they are looking for.”

Looking at the apartment market across the board about 70% of stock being sold is still going to investors, Murray said.

“Most of the new apartment developments, particularly in the CBD, are still not high-end enough for baby-boomers. They sell to investors and also overseas buyers.”

The fact that established apartment investors are doing well out of the current property boom probably adds to their attractiveness to other investors.

Murray said the increase in apartment prices means that those who bought apartments years ago, when no-one else wanted them, are now seeing a net return of about 14%.

“With that sort of return, why would you get out of the apartment market? Where else can you get that sort of return?"

It’s all about cash flow and income for the older investors with smaller apartments, Murray said.

"Meanwhile, younger investors are buying the larger apartments which offer superious return figures with the proposition of selling to emotional first home buyers in the future.

"It's the holy grail of an investor if you will..... capital gain and return."

Comments

No comments yet

Most Read

AIA - Go Home Loans 4.00
Unity First Home Buyer special 4.15
SBS FirstHome Combo 4.29
ICBC 4.49
Kainga Ora 4.59
SBS Bank Special 4.69
China Construction Bank 4.85
Co-operative Bank - First Home Special 4.89
TSB Special 4.99
Co-operative Bank - Owner Occ 4.99
ASB Bank 4.99
China Construction Bank 4.95
Kainga Ora 4.95
ICBC 4.99
SBS Bank Special 5.29
Westpac Special 5.29
Co-operative Bank - First Home Special 5.29
BNZ - Std 5.35
AIA - Go Home Loans 5.35
ANZ Special 5.35
ASB Bank 5.35
Kiwibank Special 5.39
SBS Bank Special 5.49
ICBC 5.65
Kainga Ora 5.69
ASB Bank 5.75
BNZ - Std 5.75
AIA - Go Home Loans 5.75
Westpac Special 5.75
Kiwibank Special 5.89
Co-operative Bank - First Home Special 5.89
TSB Special 5.99
China Construction Bank 5.99
SBS FirstHome Combo 3.29
AIA - Back My Build 3.34
SBS Construction lending for FHB 3.79
CFML 321 Loans 4.20
ICBC 5.39
Co-operative Bank - Owner Occ 5.69
Co-operative Bank - Standard 5.69
Kainga Ora 5.79
Pepper Money Prime 5.99
Unity Standard 6.04
Unity Special 6.04

More Stories

Can the NZ economy grow while house prices stagnate?

Thursday, July 09th 2026

Can the NZ economy grow while house prices stagnate?

The question of whether the New Zealand economy can grow much without a recovery in the housing market remains a live issue.

Thursday, February 19th 2026

RBNZ expects slower house price growth in the current recovery

The Reserve Bank thinks house prices will rise at a much slower pace during the current recovery than they have in past cycles.

Wednesday, January 07th 2026

Queenstown not off the radar for first home buyers

First home buyers are not being deterred by Queenstown’s soaring house prices.

Record levels of first home buyers taking out low deposit loans

Tuesday, December 23rd 2025

Record levels of first home buyers taking out low deposit loans

About half of all first home buyer lending has been done at a less than 20% deposit in recent months.