Chinese buyers flock to Auckland apartment auctions as sales surge

Sky high prices at the Zest apartment building in Auckland’s CBD

There has been a strong lift in the number of Auckland CBD apartments being listed for sale and no shortage of buyers willing to snap them up, with Chinese buyers to the fore.

New listings at real estate agencies City Sales and Ray White City Apartments, both specialists in the Auckland apartment market, have taken a big jump in the last few weeks, with the increase in activity most noticeable at their regularly scheduled auctions.

Damian Piggin of Ray White City Apartments said the number of apartments being auctioned by the agency had more than doubled over the last few weeks and very few remained unsold at the end of each auction.

City Sales director Martin Dunn said new listings at his agency had also increased strongly in recent weeks.

However the extra supply did not appear to be dampening buyer enthusiasm and there was strong competition between bidders when they came to auction.

At this week’s regular Ray White City Apartments auction, 12 apartments were offered for sale compared to the normal five or six and 10 sold under the hammer, with another selling by negotiation later the same day.

Next’s week’s auction will be even bigger with 14 apartments due to be offered for sale.

Piggin said many of the vendors were investors who had owned their apartments for many years when there hadn’t been much movement in prices, and they were now taking advantage of recent price rises to exit the market.

Some had been stung when they had purchased apartments through the notorious Blue Chip investment schemes and were taking the opportunity to recoup their losses, he said.

However it appears that others had purchased their apartments only recently and were giving them a quick flick.

At this week’s auction a two bedroom apartment in the Federal City apartment complex on Federal St, that had been purchased for $395,000 in April sold under the hammer for $487,500, a price gain of $92,500 (23.4%) in four months (see results below). 

Another that was sold for a sharp increase in price was a unit in the Zest building on Nelson St which had been purchased in January last year for $296,500 and sold under the hammer at this week’s auction for $439,000.

Piggin said he did not think that new loan-to-value ratio (LVR) restrictions and pending changes to tax rules on residential investment properties, were having any effect on the market.

“We’ll have to wait and see if it does [have an impact ] but at this stage I haven’t seen much effect from it,” he said. 

Another noticeable feature of recent auctions at both Ray White City Apartments and City Sales was a big increase in the number of Chinese people attending.

Although Chinese buyers have long been a significant part of Auckland’s CBD apartment market, their participation at auctions seems to have increased sharply in the last few months.

At recent apartment auctions at both Ray White City Apartments and City Sales that were observed by interest.co.nz, it was estimated that up to 80% of those attending were Chinese people and their bidding was fiercely competitive.

See below for the full results of this week’s apartment auction at Ray White White City Apartments:

  • 1013/85 Wakefield St. Tetra House. A 39 square metre one bedroom, two bathroom unit, under a management contract returning $1581 a month. Sold for $248,000. Rates were $2535 and the body corporate levy $4881. According to QV.co.nz the unit was originally purchased for $294,000 in 2006 and resold for $328,220 in 2007. The agents were Daniel Horrobin and Damian Piggin.
  • 1104/17 Vogel Lane. The Alpha building. A 56 square metre, fully furnished, two bedroom unit, with a good sized balcony and harbour views. Vacant. Sold for $507,000. Rates were $1644 and the body corporate levy $5369. According to QV.co.nz the unit had been purchased in June last year for $419,000. The agents were Krister Samuel and Mitch Agnew.
  • 707/207 Federal St. Federal City building. A 61 square metre, two bedroom unit with balcony. Vacant. Sold post auction for $487,500. Rates were $1397 and the body corporate levy $5140.  According to QV.co.nz the unit had been purchased in April this year for $395,000. The  agents were Ryan Bridgman and Mitch Agnew.
  • 2115/10 Waterloo Quadrant. The Quadrant building. A 32 square metre, fully furnished,one bedroom unit rented at $420 a week. Sold for $306,000. Rates were $1183 and the body corporate levy $4189. According to QV.co.nz the unit had been purchased in 2012 $225,000. The agent was Victor Liu.
  • 502/53 Cook St. Aura building. A 49 square metre, two bedroom unit with balcony. Vacant. Sold for $380,000. Rates were $1023 and the body corporate levy $4317 which includes hot and cold water charges. No sales history available. The agent was Dominic Worthington.
  • 1135/72 Nelson St. Zest building. A 48 square metre two bedroom unit with harbour views. Vacant Sold for $439,000. Rates were $1224 and the body corporate levy $4984. According to QV.co.nz the unit had been purchased in January 2014 for $296,500. The agents were May Ma and Mark Li.
  • 203/7 Eden Crescent. The Crescent building. A 37 square metre, one bedroom unit, with a management agreement currently returning $350 a week. Sold for $200,000 plus GST. Rates were $1337 and the body corporate levy $4180. The agent was James Mairs.
  • 34i/16 Gore St. Harbour City building. A 38 square metre, one bedroom, furnished unit. Vacant. Sold for $280,000. Rates were $2967 and the body corporate levy $2899 plus a special levy of $2010 which is to be used to fund a $10 million High Court claim the building’s Body Corporate is bringing against Auckland Council and 11 contractors involved in the building’s construction, regarding alleged defects. However the building is not subject to a Weathertightness Homes Resolution claim. The agents were Daniel Horrobin and Damian Piggin.
  •  7B/88 Anzac Ave. Harbour Royal building. An 89 square metre, two bedroom unit with a car park, rented at $500 a week. There were multiple bidders for this property and when bidding stalled at $665,000 the auctioneer made a vendor bid of $700,000, but when there were no further bids it was passed in for sale by negotiation. Rates were $1767 and the body corporate levy $6889. According to QV.co.nz the apartment had been purchased in 2008 for $363,000. The agent was James Mairs.
  • 1D/17 Scanlan St, Grey Lynn. A 70 square metre, one bedroom unit with a balcony and two car parks. Vacant. Sold for $475,000. Rates were $1327 and the body corporate levy $4487. According to QV.co.nz the apartment had been purchased for $297,000 in 2007. The agents were Donald Gibbs and Liam Kyle.
  • 26 Te Taou Crescent. Grand Central Campus. This was four separate flats and a car park, each on their own leasehold titles in this student accommodation complex, which were offered for sale as a single lot. Leasehold. The lot sold for $142,000. According to QV.co.nz they units had all been purchased separately between 2010 and 2012 and their combined purchase prices came $392,000. The agent was James Mairs.
  • B301/130 Anzac St, Takapuna. An 81 square metre, two bedroom unit with two bathrooms and a tandem car park and storage locker. Rented at $550 a week. Sold for $642,000. Rates were $1796 and the body corporate levy $5183. According to QV.co.nz the unit had been purchased for $502,250 in 2004. The agent was Ryan Bridgman.