As more people snap up apartments, we look at the reasons why.
In New Zealand main centres, apartment living is a fast-growing trend, particularly for baby boomers. The pull towards the convenient locations and urban, cosmopolitan lifestyle that apartment living offers are taking priority over home size, contributing to some of the factors
driving the shift.
The benefits are easily visible with security, shared facilities, sociability and ‘a less is more’ lifestyle.
Over the past decade, there’s been a significant rethink of cultural ideals as to what constitutes a Kiwi home. Driven by rising property prices and a changing employment landscape, the transition from house to apartment is one that’s gaining momentum.
It’s a mix of ‘downsizers’, first-home buyers, and investors that are leading the charge and inspiring other Kiwis to rethink their approach to home ownership. In this series, we profile three apartment buyer types.
Purchasing an apartment as an investment is a popular choice, driven in part by rising house prices, population growth and an increasing number of people seeking an urban lifestyle. Good quality rentals are in demand.
As with any property purchase, it’s important to do your homework. As an investor, is the apartment somewhere you may one day live or is it purely an investment? If you’re purchasing with a view for renting, then remaining as objective as possible is important. Your decisions should be driven by what a prospective tenant will be looking for.
Buying a new apartment, rather than an existing one, means you’ll be less likely to spend time maintaining the property. Additionally since 2005, the new building code means that apartments are more robust, with more space and better amenities.
Choosing to purchase your apartment off the plans means that if you get in early, you’ll be able to secure your preferred location and layout in the development.
Apartments on higher levels provide better views, whilst ground floor apartments often appeal to families with children or an older, less mobile demographic. These are all important factors in determining the rental income.
Avoid investing in an apartment building or development that has a high number of similar units. This could lead to an over-supply, which may affect the rental value of your property. By investing in a smaller development, you’re more likely to attract good tenants. If possible when purchasing, ask for a break-down of owner–occupiers and investors in the building. It’s best to purchase in a building where most apartments are occupied by owners.
New apartment developments in quality suburban locations are worthy of consideration, especially if there is nothing else comparable in the area.