Report reveals buyer group who buys the most apartments

by Roxanne Libatique16 Dec 2019

It seems more and more Kiwis have started to embrace apartments as homes – and CoreLogic’s latest report has revealed the buyer group who buys most apartments in Auckland.

Using Buyer Classification data, the property research company found that investors have been mostly buying new, old, or existing apartments in Auckland – with the largest buyer group for new apartments this year being mortgaged investors.

The buyer group with the biggest market share this year was cash investors with 29%, although it is lower than 31% in 2018.  However, share of purchases going to mortgaged investors increased from 22% in 2018 to 25% this year. Meanwhile, first-home buyers had a 20% share of the new apartment market and 14% in the old apartment market.

Read more: Report reveals values picking up the pace

Kelvin Davidson, senior property economist at CoreLogic, said recent figures confirmed the rise of mortgaged investors in the property market.

“In terms of yields by property type, the appeal of apartments is pretty clear to see: for properties recently on the rental market in Auckland (not split by new or old), gross yields are already starting at a much higher level for one-bedroom apartments than three-bedroom houses,” he told Landlords.co.nz.

“Alongside better (and rising) yields, there is another strong reason why some mortgaged investors will have found Auckland apartments to be a good buy lately. That is they may well have been finding sellers wanting to get a fast sale and managed to pick up some ‘bargains’.”

“In Auckland City, the proportion of apartment resales made below the original purchase price has risen steadily over the past 2-3 years. No doubt some of these ‘loss-makers’ will have been snapped up by canny mortgaged investors,” Davidson concluded.

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