An odd news release on Friday from the Real Estate Institute exhorts buyers looking to gain an entry point into some of Auckland’s top suburbs to consider apartments “rather than a residential property”.
It’s a release that:
- demonstrates why you should be wary of comparisons using median prices
- says nothing about the differences between houses & apartments in size & utility, and
- doesn’t define “a residential property” to distinguish it from an apartment, which you might have thought was also a residential property.
The institute suggests buyers could save over $1 million by buying an apartment in suburbs such as Parnell, Epsom & Takapuna instead of, I presume, a house on a section.
The institute cited its research on median prices for apartments & “residential” (including or excluding apartments?), but didn’t acknowledge differentiating factors: “The median price for apartments in Parnell was $772,500 compared to a residential median price of $2,067,500 – a difference of $1,295,000. For Epsom the apartment median price was $865,000 compared to a residential median price of $2,100,000 – a difference of $1,235,000, and for Takapuna the median price of an apartment is $817,500 compared to a residential median price of $1,870,000 – a difference of $1,052,500.”
Institute chief executive Bindi Norwell said: “For those wanting to gain an entry point into some of Auckland’s top suburbs, considering an apartment rather than a residential property is a much more affordable way of getting into some of these areas. Apartments have come a long way in the last 20 years to having top-end fixtures & fittings, eco-friendly/energy saving features & extensive communal areas.
“A saving of more than $1 million to live in a fantastic location or a good school zone is not something to be ignored.”
“For first-time buyers, apartments are an excellent way to get a foot on the already expensive Auckland property market. Apartments are usually close to public transport & other amenities such as cafes or restaurants, gyms & other retail outlets. But most importantly, they’re in a price bracket that people can more realistically actually afford.
“An apartment may not be the property that a young couple end up living in their whole life, but it allows them the chance to build up equity in their apartment and then, further down the track, if they plan a family it means that they can then look to make the next step to a larger home with more room.”
Ms Norwell said the research uncovered one anomaly in the Auckland market, Orewa, where the median price for apartments was $11,500 above that for “a residential property”.
Attribution: Institute release.