Apartment vs House: NZ's latest thinking

Date: 17 April 2018

Apartment living offers a unique lifestyle with a ‘lock up and leave’ mentality - controlled access enables security and privacy, with all exterior maintenance the concern of a Body Corporate. You may even enjoy stunning views and the convenience of inner city living - saving commuting cost and time whilst enjoying all the perks of an inner city lifestyle.  Plus, weekend lawn mowing is no longer your life. Perhaps the gloatiest apartments perk of all?  No parking dramas. There’s nothing quite like being able to stroll to your favourite eatery or café, watching the ‘others’ circling for parks. Poor housey people. 
Apartment dwellers often talk of the sense of community - they know their neighbours and the local dairy or café workers actually greet them by name. They also talk of the freedom from ‘stuff’ that living within a smaller footprint (compared to the traditional villa) enables - as long as smart storage and good layout is on offer, it can be a joy to live a more simplified life. 
Sure, there’s no big backyard with grass under your toes but there’s a lot to be said for apartment living. 
So what’s New Zealand’s current preference for apartment versus a house? We looked to the latest CoreLogic Pain and Gain Report which provides an analysis of homes which were resold over the previous quarter. Comparing the most recent sale price to the home’s previous sale price, determines whether the property resold at a gross profit or gross loss. This provides a proxy for the housing market’s performance, highlighting the magnitude of profit or loss the typical seller of a home makes in analysed regions.
After closing completely in the middle of 2017, a gap has actually re-emerged between the performances of resales for houses versus apartments. In the final quarter of 2017, 9.6% of apartment sales were made at a loss, whereas the figure for houses was a much lower 3.6%. Any recent market fatigue has been concentrated in the apartment segment, perhaps where shorter-focused owners are more prevalent. It’s important to note however that the losses for apartments (and houses) are still low in an historical context and that both of those figures were slightly lower than the previous quarter.
We also spoke to CoreLogic Head of Research Nick Goodall, who provided correction to the assumption that first home buyers were apartment fans: 
“Actually, while we’ve seen First Home Buyers begin to modify their expectations in regards to sacrificing the quarter acre dream, it’s mostly shifted to townhouses and other ‘shared wall’ properties rather than apartments. The latest data shows roughly 10% of apartment sales go to First Home Buyers, while for flats and houses it’s roughly 23% of each”
So there you have it. Apartment living may have its ardent proponents, but the statistics tell a different story about their sales performance right now. For more information, download your free copy of the latest CoreLogic Pain & Gain Report.

Tags: Property, CoreLogic, Auckland, Wellington, Housing, Real Estate, Property Market, Buying