Market Research

ISSUE 116 | September 2015

Everything Property!

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Average Rental Price - 1 Bedroom | 12 Month Rolling Average

Metro Apartment ReviewRentals Across New ZealandThe premium paid for a 1-bedroom rental in Auckland has declined over the past 5 years while the average rental price in Christchurch has increased at a greater rate to be more in line with the national average. In contrast, 2-bedroom rental prices in Auckland have trended upward over the last ten years. Christchurch 2-bedroom rental prices have also trended upwards over the last 5 years to be more in line with the national average - after historically being under. Wellington’s 2-bedroom rental prices have moved below the national average over the last 2 years.

Sale Prices and Number of Sales DistributionThe number of mid-price to upper mid-price apartment sales in Auckland ($350k-$699k) has increased sharply since July 2011 and to a much greater extent than the number of apartment sales in the $700k-$1million+ price bracket. In part this will be due to an increasing average sales price and apartments that were previously in a lower price bracket moving into the next price bracket. Since 2011, there has been a steady decline in the number of apartment sales in the less than $150k price bracket and since 2013, there has been a sharp decline in the number of apartment sales in the $150k - $249k price bracket. The trends are also reflected at the National level.

Average Rental Price - 2 Bedroom | 12 Month Rolling Average

Differential Between City and Average NZ Rental Prices - 1 Bedroom12 Month Rolling Average

Differential Between City and Average NZ Rental Prices - 2 Bedroom12 Month Rolling Average

$100

$200

$300

Jul 0

5

Jul 0

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8

Jul 0

9

Jul 1

0

Jul 1

1

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Aver

age

Rent

al P

rice

Auckland Wellington Christchurch Dunedin New Zealand

-30%

-20%

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0%

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30%

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Auckland Wellington Christchurch Dunedin

0 =

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onal

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rage

Auckland Wellington Christchurch Dunedin

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$200

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rice

Auckland Wellington Christchurch Dunedin New Zealand

0

20

40

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Num

ber o

f Apa

rtm

ents

Less than $150k $150k - $249k $250k - $349k $350k - $499k$500k - $699k $700k - $999k $1m+

Jul 08 Jul 09 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 150%

10%20%30%40%50%60%70%80%90%

100%

% O

f Apa

rtm

ents

Auckland Apartment Sales Distribution (%)12-month rolling average

Jul 08 Jul 09 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 15

$1m+ $700k - $999k $500k - $699k $350k - $499k $250k - $349k $150k - $249k Less than $150k

Auckland Apartment Sales Distribution | 12 Month Rolling Average Auckland Apartment Sales Distribution (%) | 12 Month Rolling Average

New Zealand Apartment Sales Distribution | 12 Month Rolling Average New Zealand Apartment Sales Distribution (%) | 12 Month Rolling Average

Source: REINZ

12-month rolling average

$1m+ $700k - $999k $500k - $699k $350k - $499k $250k - $349k $150k - $249k Less than $150k

0%10%20%30%40%50%60%70%80%90%

100%

Jul 08 Jul 09 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 15

% o

f Apa

rtm

ents

Less than $150k $150k - $249k $250k - $349k $350k - $499k$500k - $699k $700k - $999k $1m+

0102030405060708090

Jul 08 Jul 09 Jul 10 Jul 11 Jul 12 Jul 13 Jul 14 Jul 15

Num

ber o

f Apa

rtm

ents

Source: REINZ

Source: REINZSource: REINZ

Crockers Property | PO Box 74054 Greenlane, Auckland 1546 | 525 Manukau Road, Epsom, Auckland 1023 | T 09 630 8890crockers.co.nz | Crockers Property Management Ltd and Crockers Realty Ltd, Licensed (REAA 2008)

Crockers Property Group uses market data from a variety of sources which we believe to be accurate and reliable. This enables Crockers to provide analysis and interpretation on the property market. Opinions, statements and analysis are from general information only and should not be relied upon for any specific purpose.

Crockers takes no responsibility for decisions you make based on data provided through this printed material. ©Copyright Crockers Property 2015

In our latest Crockers Property Investment (CPII) survey in association with Ipsos, we asked investors what factors they consider when buying an apartment investment property. The most important factors in buying an investment property are location and being freehold. Small investors focus on location more (62%), while larger investors are almost equally likely to feel freehold is important (55% vs 57%). Gearing and body corporate fees are also taken into account by a sizeable number of investors.

Location, Location and... Freehold

Investing In ApartmentsThe majority of investors surveyed (54%) prefer a professional property management company to manage their investment, while most of the rest (40%) prefer managing their investment property themselves. In interpreting these answers we have to bear in mind that as the sample was sourced from Crocker’s newsletter recipients, that a bias towards preferring property managers is expected. Small-scale property investors are more likely to prefer professional management, while larger property investors are equally likely to manage their property investment themselves.

Auckland Sales & Rental Update Median Auckland Prices and Sales FiguresThe Median Sales price has declined for the first time since January 2015 but still sits 20% above the same time last year. Sales volumes are up again and remain fairly strong.

$735K

$440k$480k$520k$560k$600k$640k$680k$720k$760k

Jan

Feb

Mar Ap

r

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

Med

ian

pric

e fo

rre

side

ntia

l pro

pert

y so

ld

Median price 2013 Median price 2014 Median price 2015

3,160

1,5002,0002,5003,0003,5004,000

Jan

Feb

Mar Apr

May Jun Jul

Aug

Sep

Oct

Nov

Dec

Num

ber o

f sal

es

Auckland Residential Property Sales Number

# of sales 2013 # of sales 2014 # of sales 2015

Auckland Rental Prices Auckland rents for 2-bedroom properties have slowly trended downwards over the past 2 months, while 2-bedroom rents across New Zealand have lifted slightly. Rents for 3-bedroom properties in Auckland have declined sharply this month, while prices across New Zealand stabilise just below the high prices seen in February/March.

$437

$340

$360

$380

$400

$420

$440

$460

Jan

Feb

Mar Ap

r

May Jun Jul

Aug

Sep

Oct

Nov

Dec

Aver

age

wee

kly r

enta

l

2013 2014 2015

$561

$460

$480

$500

$520

$540

$560

$580

Aver

age

wee

kly

rent

al

2013 2014 2015

Jan

Feb

Mar

Apr

May Jun Jul

Aug

Sep

Oct

Nov

Dec

Auckland Residential Property Weekly Rentals | 2 Bedroom Auckland Residential Property Weekly Rentals | 3 Bedroom

Auckland Residential Property Sales Median Price Auckland Residential Property Sales Number

Source: REINZ

Source: REINZSource: REINZ

Source: REINZ

57%

51%

26%

18%

1%

62%

44%

24%

17%

0%

55%

57%

26%

21%

2%

0% 10% 20% 30% 40% 50% 60% 70%

Location

Being Freehold

Being a positivelygeared investment

Body Corporate Fees

Being Leasehold

OverallSmall InvestorsLarge Investors

Source: CPII Survey - Aug 2015Source: CPII Survey - Aug 2015 | Note: Respondents could reply to more than one reply

66% 69%65%

49%

34% 31%35%

51%

0%

10%

20%

30%

40%

50%

60%

70%

80%

$1- $500,000 $500,001 - $750,000 $750,001 - $1 million $1m +

Professionally managed by a Property Management company Managed by yourself

Note: September 2013 - suburb of Devonport had no bonds received for the month December 2013 - small numbers of higher value bonds received in City Bays and Devonport February 2015 - suburb of Devonport had no bonds received for the month

Note: February 2015 - suburbs of Grey Lynn/ Westmere and Remuera had no bonds received for the month