NZ Apartments

George it’s too much like inner city Melbourne apartments, my money’s going elsewhere.

I totally agree! Apartments….*holds up cross and gets wooden stake ready*

I too have read the sad statistics of Melbourne apartments and i wouldn’t imagine Auckland apartments to be much different.

Read this:
http://bulletin.ninemsn.com.au/bulletin/EdDesk.nsf/All/716CA9A406A48FDACA256C170010BF31

“Investors have rushed into new inner-city apartments in Melbourne and Sydney over the past few years, often in the mistaken belief they could make a killing by way of quick capital gains. A comprehensive study of resales of new apartments in Melbourne over the past 10 years provides the most damning hard evidence of the capital growth myth. The new study by property analyst Charter Keck Cramer of the 3000-plus new central Melbourne apartments sold since 1992 shows the average price gain was 1.3% a year after inflation. “

etc etc

And so now you get my armchair reasoning as to why that is. 1) too many built 2) they date quickly and so the resale value doesn’t hold, because people can buy the new ones rather than the two years ago ones….3) they are negatively geared and people realise that doesn’t work, especially when they’re not going up in value because of 4) Basically the more land you get the better the chances of capital growth. Land appreciates, buildings depreciate. So apartments have a small land component in the value and a whole lot of ‘building in today’s dollars’ costs, the highest priced building you will ever get… 5) Strata fees are out of the investor’s control, really 6) depreciation made it seem like a tax break, but in the end a loss is a loss

etc etc etc
joy to the world and my semi-photographic memory which meant I could find that article again…

There are reasons to buy apartments. One is that they’re usually cheaper than houses, so they provide an entry to the market- it depends on where they are located, of course- a sydney apartment will cost maybe 10 times more than a rural house. Another is that some people choose apartment living over house living. There is an article in a recent issue of API which discusses the demographics of apartment dwellers- they wish to live close to cities, and have different lifestyles- with no need for a yard etc. Many young people and families are now living in apartments in cities. The article referred to family types, and as we know, households are getting smaller. In sydney, where you have 1 or 2 persons living in a dwelling, apartments can become the choice for them.

I think the oversupplied areas can become ghettoes. I can’t help but look at some large apartment blocks and see them as looking like the old dept of housing towers- not pretty.

Mini, I don’t think *all* land appreciates in all locations. Some rural land in NSW used to cost a couple of thousand per block before the boom, and still does.

Apartment living in sydney will only increase. There’s about a million rules about which kind of places to buy, and there’s a heap of articles on the net people can check out. Certainly, some apartments have not achieved great CG- no disputing that. But I guess sometimes we buy what we’re used to- I live in an apartment myself- as do most of my friends and colleagues- and I see the benefits of that kind of living.

I am not, in what I’ve written, making reference to the OTP over-supplied exxy apartments. I am saying that apartments make an alternative purchasing decision to houses, if people are catering to a particular market.

kay henry