Bayleys says the properties it manages have occupancy rates between 95% and 98% with demand particularly evident for city and city fringe apartments and terrace houses in Ponsonby, Herne Bay, Parnell, Newmarket and Remuera.
"While the last 12 months has seen little movement in apartment and terrace house prices, a growth in rentals has resulted from a shortage of quality properties to rent," it says.
It also notes that along with the traditional tenants, students, professional singles and couples, there’s growing demand from over 45 year olds to rent city apartments. "This group has seen the family leave home and has feed up equity to pursue leisure activities."
It provides four examples of properties it manages where the purchase price ranged from $149,950 to $239,000 and rentals range from $270 $400 a week. Net returns, based on 49 weeks annual occupancy and taking into account body corporate levels, currently range from 7.4% to 8.04%, it says.
As to who is investing in apartments, Bayleys Research says investors still account for more than half the apartments being sold in Auckland, but that’s well down on a year ago when they accounted for nearly nine in 10 buyers.
In particular, studio apartments now account for less than 10% of sales, down from 25% two years ago, reflecting the strengthening of the owner-occupier part of the market.
