Before news of Covid-19 hit our shores, the Auckland apartment market was picking up speed.
In some buildings, one-off sales dragged prices down, and in others, time on the market increased prices. Some would say it was a ‘buyers market’ and had been for over a year.The amount of stock that has changed hands over the past six or seven years was significant in Auckland central. These investors are now a different breed than those who bought circa 2000’s. They made their purchases in a real marketplace, many working with the benefit of hindsight from historical figures of existing stock occupancy, values, and building knowledge. This hindsight gave increased certainty and confidence.
This type of city investor who has owned their property for half a decade, and those who have placed their property on the market without a large capital gain, have little inclination to sell for less than they paid. Many of these listed properties are tenanted, and the urgency to sell in most cases does not outweigh realising a loss. And so we have a widening gap between Vendors' expectations and Buyers who are chasing bargains and cash flow instead of capital gains.
Now fast forward to announcements over the past few weeks that the market is due to fall as far as 10%. There is no crystal ball, and we will wait and see how well our market performs during the Covid-19 aftermath. International student numbers, short term accommodation demand, rent prices, and unemployment will all have their parts to play. Most owners should be able to hold on to their investments, but those who wish to free their money up might be in for a bumpier ride than anticipated.
It is more important to protect your assets with as much information and knowledge as possible. Keep an eye on the market, get regular appraisals, and stay in touch with your tenants' plans – insulate yourself against risk and if you plan or need to sell, make your property stand out from the crowd.
We are here to talk to you, with no obligation about campaign strategies and the best methods of sale to help you move forward as quickly as possible.