Archive | Market

2 apartments sell at Ray White auction

2 of the 5 units auctioned at Ray White City Apartments today were sold under the hammer, one in the Grand Chancellor hotel building and the other in Eden Terrace.

CBD

Learning Quarter

Forte, 37 Symonds St, unit 1302:
Features: 48m² corner unit, 2 bedrooms, balcony
Outgoings: rates $1383/year including gst; body corp levy $4149/year, special levy $703 to fireproof riser shafts
Income assessment: $500/week fixed until 30 April, appraisal $530-560/week furnished
Outcome: passed in after bid at $300,000, vendor bid at $400,000
Agents: May Ma & Mark Li

Uptown

Q Central, 36 Liverpool St, unit 3A:
Features: leasehold, 59m², 2 bedrooms
Outgoings: rates $1188/year including gst; body corp levy $3534/year, ground rent $7173/year, next ground lease review December 2018
Income assessment: $1894/month on Housing NZ lease expiring in March 2019
Outcome: passed in on sole bid from vendor of $100,000
Agents: May Ma & Mark Li

Victoria Quarter

Grand Chancellor, 1 Hobson St, unit 803:
Features: 57m², one bedroom, with a new title excluding the parking space (and reducing rates & body corp levy accordingly)
Outgoings: rates $1812/year including gst; body corp levy $4763/year
Outcome: sold for $612,000
Agent: Josh Muriwai

Waterfront

Sebel Suites, 85 Customs St, unit 610:
Features: leasehold, 57m², one bedroom, study, balcony overlooking Viaduct Basin
Outgoings: rates $1913/year including gst; body corp opex levy $8852/year, ground lease $6806/year
Income assessment: $500/week current, appraisal $620-680/week furnished
Outcome: passed in at $201,000
Agents: Damian Piggin & Daniel Horrobin

Isthmus west

Eden Terrace

10 Ruru St, unit 9:
Features: 114m², 3 levels, 2 bedrooms, deck, tandem internal-access garage, storage
Outgoings: rates $1596/year including gst; body corp levy $2913/year
Income assessment: appraisal $650-700/week
Outcome: sold for $700,000
Agent: Krister Samuel

Attribution: Auction.

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3-apartment auction attracts no bid

All 3 apartments taken to auction at Barfoot & Thompson’s city office this morning were passed in without a bid being offered.

Image above: The Wiltshire, across Victoria St from the SkyCity casino & hotel, is unusual for providing owners with extra income from a billboard on the western side. Behind it in the picture, Conrad Properties’ Victoria Residences apartment development is nearing completion.

CBD

Uptown

Eclipse, 156 Vincent St, unit 7C:
Features: 62m², 2 bedrooms
Outgoings: body corp levy $5079/year
Outcome: no bid, back on the market at $590,000
Agents: Bett Shao & Rico Zhao

Victoria Quarter

Wiltshire, 89 Victoria St West, unit 8A:
Features: 88m², 2 bedrooms, 2 bathrooms, balcony; the building earns owners $125,775/year + gst from a billboard up the western side
Outgoings: body corp levy $4237/year
Income assessment: $630/week, fixed until 28 February
Outcome: no bid
Agent: Jason Buckwell

Lord on Nelson, 11 Nicholas St, unit 7A:
Features: 131m², corner 3 bedrooms, 2 bathrooms, enclosed balcony, tandem carpark; the building is leaky and owners launched proceedings against the developer & Auckland Council in 2011; the vendor has agreed to assign rights & obligations from that claim; based on a $6 million remediation estimate (tenders to go out soon), this unit’s repair share would be $294,000
Outgoings: body corp levy $8689/year
Outcome: no bid
Agents: Livia Li & Alan Guo

Attribution: Auction.

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Spread of sales & leases by Shore agents

Latest transactions signed by Bayleys’ North Shore agents included sale of a hostel in the university precinct of downtown Auckland, the lease on a Ranui shop and a sale & 2 leases in the Rosedale area of Albany.

Sales

CBD

Uptown

47 St Paul St, unit 2B:
Features: 179m² 10-room Central Hostel, parking space
Outcome: sold in September for $1.18 million + gst
Agent: David Han

North-east

Rosedale

27-29 William Pickering Drive, unit F4:
Features: 210m² office, 6 parking spaces
Rent: about $55,600/year net + gst
Outcome: sold in September for $765,000 + gst at a 7.27% yield
Agents: Ildy Meixner & Alex Strever

Leases

North-east

Rosedale

1-3 Parkhead Place, unit 2:
Features: 448m² office unit, 9 parking spaces
Rent: leased in September for $95,000/year net + gst, parking $16/space/week      
Agents: Alex Strever, Laurie Burt & Matt Mimmack

10 Vega Place, unit G:
Features: 330m² industrial unit – warehouse 190m², showroom 70m², office 70m², 6 parking spaces
Rent: leased in September for $53,000/year net + gst, premises rental $160.61 (including parking)
Agents: Alex Strever & Laurie Burt

North-west

Ranui

20B Pooks Rd:
Features: 90m² retail
Rent: leased in August for $20,000/year net + gst, premises rental $222/m²
Agents: Dev Choudhury & Damian Stephen

Attribution: Agency release.

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Wigram sale, 6 commercial leases in Auckland & Canterbury

Knight Frank agents have reported a Wigram warehouse sale in Canterbury and 6 commercial leases in Auckland & Christchurch.

Sale

South Island – Canterbury

Wigram

22 Sonter Rd, unit 1:
Features: 470m² warehouse, 180m² office/showroom
Outcome: sold for $1.45 million at a 5.4% yield (market yield 6.5%)
Agent: Craig Edwards

Leases

South

Favona

70 Favona Rd:
Features: 1500m² industrial yard
Agent: Scott Worrall

Papakura

14B Vernon St:
Features: 250m² warehouse unit
Rent: $34,000/year + gst + opex 
Agent: Josh Franklin

South Island – Canterbury

Burnside

41 Sir William Pickering Drive, unit 5:
Features: 74m² ground-floor office unit, 3 parking spaces
Rent: $21,990/year net + gst + opex      
Agent: Campbell Taylor

CBD

48 Fitzgerald Avenue, unit 11:
Features: 347m² warehouse, 246m² showroom, 8 parking spaces
Rent: $82,000/year net + gst + opex      

Agents: Sam Stone & Elliot Clayton

68 Fitzgerald Avenue, part level 1:
Features: 159m² first-floor office tenancy, 4 parking spaces
Rent: $47,909/year net + gst + opex      
Outcome:
Agent: Tom Lax

Innovation Precinct, 181 High St, unit D3:
Features: 99² ground-floor retail tenancy
Rent: $49,005/year net + gst + opex
Agent: Tom Lax

Attribution: Agency release.

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Summit on Symonds commercial units & Grey Lynn demolition yard sell

3 commercial units on the ground floor of the Summit on Symonds building (pictured), at the corner of Karangahape Rd & Symonds St at the top of the cbd, have been sold by Bayleys agent Millie Liang.

Also sold is a Grey Lynn property currently used as a demolition yard.

CBD

Uptown

Summit on Symonds, 103-105 Symonds St, new retail units on ground floor of apartment building on the corner of Karangahape Rd:

105 Symonds St, unit 9:
Features: 43m² unit occupied by Wash Station NZ laundromat
Rent: 8-year lease from March 2016, 2 4-year rights of renewal, 2% annual rental increases & reviews to market every 4 years       
Outcome: sold for $570,000 at a 5.33% yield
Agent: Millie Liang

103 Symonds St, unit 10:
Features: 40m² unit, parking space, occupied by physiotherapist
Rent: 3-year lease from August, 2 3-year rights of renewal, 2% annual rental increases & reviews to market at renewal
Outcome: sold for $600,000 at a 5.2% yield
Agent: Millie Liang

105 Symonds St, unit 11:
Features: 68m² unit occupied by The Corner Café
Rent: 8-year lease from March 2016, 2 4-year rights of renewal, 2% annual rental increases & reviews to market every 4 years
Outcome: sold for $890,000 at a 5.37% yield
Agent: Millie Liang

Isthmus west

Grey Lynn

18 Westmoreland St:
Features: 2782m² development site zoned mixed use (18m height limit), warehouse & office building of about 1850m², currently used as demolition sales yard
Outcome: sold with vacant possession for $8.5 million at $3055/m²
Agent: Alan Haydock

Attribution: Agency release.

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House sale statistics wander around

The nearest thing to a trend in house sales is that the under-$500,000 price bracket remains a few points below 50%, but even that’s wobbled a couple of times over the last year.

The Real Estate Institute’s statistics showed the median sale price in August up around the country compared to both August last year & July this year, but down in Auckland compared to a year ago.

Sales were down compared to a year ago but up compared to July.

The bottom price bracket used to be under $400,000 and its share of the market was declining rapidly. But the bracket marker was lifted to $500,000 early this year and, although it’s still falling, it’s in the mid-40% region.

The institute view

Real Institute chief executive Bindi Norwell said: “Banks’ lending criteria & loan:value ratios (LVRs) are still impacting first-homebuyers & investors. If you looked at the number of properties sold, without looking at the bigger picture, one might assume that the market was showing significant signs of slowing. However, as prices are holding up, and even increasing, then it suggests that people may be holding off from selling their property unless it’s absolutely necessary.”

Median house price this August compared to July 2017 & August 2016 (in brackets):
National: $530,000 ($518,000, $490,000), up 2.3% in month, 8.2% in year
National excluding Auckland: $428,000 ($417,500, $386,000), up 2.5% in month, 10.9% in year
Auckland: $840,000 ($830,000, $850,000), up 1.2% in month, down 1.2% in year

Sales by auction nationally fell 55% from a year ago to 799, representing 14% of all sales. In Auckland, auction sales fell 61% to 418, representing 23% of all sales.

Sales nationally fell from a year ago in all price brackets, but were up from July in all but the $500-750,000 bracket. The breakdown of sales in price brackets and their share of the market in August 2017 & August 2016:

$1 million-plus: 787 (964), down 18%; 13.3% (13.1%) of all sales
$750-999,999: 790 (941), down 16%; 13.4% (12.8%) of all sales
$500-749,999: 1614 (1717), down 6%; 27.4% (23.3%) of all sales
Under $500,000: 2705 (3746), down 38%; 45.9% (50.8%) of all sales
All sales: 5896 (7368), down 20%.

In last month’s item on the housing figures I managed to present you with an Auckland sales graph twice, omitting the price brackets. Here’s that breakdown of sales in price brackets and their share of the market in July 2017 & July 2016:

$1 million-plus: 708 (1002), 12.9% (13.8%)
$750,000-999,999: 674 (925), 12.3% (12.8%)
$500,000-749,999: 1478 (1741), 27.0% (24.0%)
Under $500,000: 2615 (3583), 47.8% (49.4%)
All properties sold: 5475 (7251).

The institute’s house price index, which measures the changing value of property in the market, showed a 0.5% increase nationally. Excluding Auckland, it rose 7.0%. The Auckland index fell 2.9%.

Housing stock available:
Nationally: 21,555 (21,462), down 0.4%
National excluding Auckland: 15,389 (13,825), down 10.2%
Auckland: 7731 (6073), up 27.3%

The Auckland view

On the Auckland market Ms Norwell said: “The Auckland market is stable but improving, with house prices in Auckland increasing $10,000 from July, with much of this activity being driven by school zones, age of homes & location. LVRs & the banks are still impacting the market & first-homebuyers, leading to a reduction in investors in the market. Similarly, clients are still cautious as the political parties continue to announce their policies, but post-election the market is expected to lift.

“Compared to August 2016, the median price decreased $10,000 (-1%). However, most of the territorial authorities [on the old boundaries] within the region saw increases in their median price over the same time period, with Franklin District leading the way with a 9% increase. It was Manukau City & Waitakere City only that saw decreases in their median price since August 2016, the latter most significant at -5%.

“Compared to July 2017, the overall region median increased 1%. The performance of the territorial authorities was largely positive, with only Manukau City experiencing a decrease (-3%).

“Sales volume in the Auckland region increased 7% compared to July, with large boosts in sales numbers in Manukau & Waitakere (24% & 15% respectively). Compared to August 2016, sales fell 22% with volume decreasing in all territorial authorities, most notably in Rodney (-30%), North Shore (-28%) & Auckland City (-26%).”

Attribution: Institute release.

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More apartments? Not under this tightening scenario

The political call is for housing that’s more affordable, and more of it. Construction costs militate against the first hope, and a combination of central bank constraints & tightening of commercial bank asset quality ratios is likely to deal with the second.

Auckland specialist apartment agency City Sales, headed by Martin Dunn, has produced its own research – out today – which indicates an easing in supply over the next 3 years and a sharp drop in supply in 2021.

The graph shows a dead market post-global financial crisis, returning to life in 2015 and growing strongly for the last 2 years. This year Mr Dunn expects close to 1500 completions, falling to a range of 1000-1300 over the next 3 years, then dropping sharply to fewer than 500 as regulatory constraints have their impact.

Off-plan stock unsold after regulatory changes

City Sales owner Martin Dunn.

Mr Dunn said the agency’s research was based on fact, not hope. Already, the agency has had parcels of unsold off-the-plans stock in new developments to take to the market after investors failed to proceed with their purchase.

Some had borrowed for their deposit and were unable to produce the balance. Others had to walk away because of the 40% equity ratio now required of investors.

He expects more of that as new developments are completed, and said this week the impact would result in a marked slowdown in development.

“The banks call the shots on supply,” Mr Dunn said in his latest market report.

The big 4 New Zealand banks are Australian-owned, and the Australian Prudential Regulatory Authority warned them at the end of July that it would require common equity tier 1 capital ratios of at least 10.5% to meet the authority’s “unquestionably strong” benchmark. That meant all had to tighten their lending and adjust the ratios for different market sectors.

Mr Dunn said City Sales had assessed proposed developments – many not yet unveiled – and determined the likelihood that they’d proceed.

One unknown at the moment is the amount of Chinese money available to China’s overseas developers. Already the screws have tightened on the availability of funds to individuals buying outside China for investment, but the position for developers has been varied.

There were some suggestions emanating from China this week that funding might be freed up, but I haven’t verified that yet.

Other market factors

Other market factors are the returns to investors – who have been integral to making any apartment development work, because they form about 80% of the market, but may have their domination reduced – and development costs.

According to City Sales’ market report – based on figures from its own transactions dating back to 2005, including sales of both new apartments & secondary stock, and from its property management business – average sale prices would continue upward: “Uber, electric cards, congestion & Boomer empty nesters are normalising Auckland central living and it’s an exciting moment. Have a look at K’ Rd these days.”

Mr Dunn said prices of the top secondary stock had eased recently, from $10,000/m² to about $8500/m² as sales volume dropped: “Uncertainty often ‘pumps the brakes’ on a largely investor-driven market, however City Sales sees activity returning to a familiar pace in the coming months.”

Finance, the investor as predator, contributing costs

The City Sales picture is accurate as the market stands. Politicians & bankers can change that overnight. They can also get things wrong, especially when they’re arguing for more supply but activating supply-reducing measures.

One of the ironies has been the clamour to lock investors out. Auckland would have no apartments in its city centre without investors, who were sought in presentations locally, in Singapore, Kuala Lumpur, Hong Kong & London over the last 20 years.

Investors in suburban homes have always made up a proportion of the market – as low as 30%, currently about 40%. Their presence has ensured there’s a stock of upgraded homes, something the management of Housing NZ by political windchange has ensured has not been the case with the state-owned stock.

The biggest change has come with the advent of the international investor, seeking to pop money into whichever market offers the best speculative opportunity. Auckland, Australia’s eastern state capitals & some Canadian cities have been prime targets.

That investment is easily regulated. Outside the investment in both new & existing stock, the other 2 cost issues are land price & construction cost. In Auckland, the greater ability to build more intensively through a wide swathe of suburbia will gradually change land costs, more than removing urban boundaries on the perimeters, where major infrastructure installation is required first.

And construction cost? Fletcher Building Ltd took the smart step long ago to create a vertical supply chain, something which makes it hard for any newcomer to match at any supply point. That vertical integration plus the lack of competition generally make it hard to lower material costs, while the construction sector has been slow to adapt to new ways.

Links:
City Sales
APRA benchmarks release, 19 July 2017

Attribution: Discussion, City Sales report, APRA.

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4 provincial sales for Bayleys

Bayleys has sold 4 properties down country in its Total Property auction series – in Tairua, Taupiri, Opotiki & Lower Hutt.

South of the Bombays

Bay of Plenty

Opotiki

108 Church St:
Features: 413mcbd site, 330m2 building occupied by ANZ Bank since construction in 1985
Rent: $48,685/year net + gst       
Outcome: sold for $516,000 at a 9.44% yield, bank currently on a one-year lease from July with 5 one-year rights of renewal
Agents: Brendon & Lynn Bradley and Kim Williams

Coromandel

Tairua

148 Main Rd:
Features: 822mcommercially zoned site on State Highway 25, single-level streetfront building with established bakery tenancy, 3 storage sheds at rear
Rent: $29,807/year net + gst
Outcome: sold for $553,000 at a 5.39% yield
Agents: Josh Smith & Belinda Sammons

Waikato

Taupiri

1 Railway Rd:
Features: 3948m2 site, 986m2 Fonterra subsidiary Farm Source rural supply services store
Rent: $137,842/year net + gst
Outcome: sold for $2.25 million at a 6.12% yield, 8-year lease runs until 2023, 4 3-year eights of renewal
Agent: Josh Smith

Wellington

Lower Hutt

305 Jackson St:
Features: 290m2 site, 175m2 single-level office building, 71% new building standard seismic assessment
Rent: assessed potential rent $43,700/year net + gst   
Outcome: sold with vacant possession for $676,000
Agents: Andrew Smith & Paul Cudby

Attribution: Agency release.

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Office building in new intensive housing zone sells

An office building (pictured) in Panmure now zoned for terrace housing & apartments sold at a flat 5% yield at NAI Harcourts’ auction yesterday.

Isthmus east

Panmure

2 Kings Rd:
Features: 951m² corner section, 509m² floor area, in new terrace housing & apartment buildings zone
Rent: $66,625/year net + gst + outgoings, one year remaining on lease
Outcome: sold for $1.33 million
Agents: Peta Laery & Richard White

Attribution: Agency release.

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Docks unit with parking sells

A leasehold Docks apartment (pictured) plus 4 parking spaces sold at Ray White City Apartments’ auction today, while an Eden Terrace unit attracted no bid.

CBD

Quay Park

The Docks, 4 Dockside Lane, unit 138:
Features: terminating leasehold (in 2161) – next review November 2018, 45m², one bedroom, 4 parking spaces (2 tandems); discovery underway for remediation works, now estimated at $8.5 million
Outgoings: rates $1604/year including gst; body corp levy $9687/year including $3722 ground rent
Income assessment: current $490/week for unit + one tandem space, rented long-term
Outcome: sold for $150,000
Agents: Dominic Worthington & Ady Huang

Isthmus west

Eden Terrace

Newton Rise, 121 Newton Rd, unit 4A:
Features: 93m², 2 bedrooms, parking space
Outcome: no bid
Agents: Susan Woods-Markwick & Clarissa Searle

Attribution: Auction.

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