Selling an apartment is very different from selling a stand alone house in the suburbs. It’s a specialised, niche market that requires extra care and specialised knowledge to navigate. If you’re thinking of selling and want to know how much your apartment is worth, these four factors are a good starting point.
1. Size and space
Apartments are generally smaller, so space is a premium. A larger floor area provides greater potential and flexibility when it comes to adding value through additional features or renovating. In 2015, the average price per square metre in Auckland was $8,493 which is 75 percent more expensive than in 2013. With the average asking price for a unit in Wellington rising to 16 percent and units in the Bay of Plenty up 27 percent in the last year, the average price per square metre nationally is likely to rise.
There are minimum guidelines in place for the dimensions of apartment bedrooms to ensure there’s at least enough space for a queen size bed and a wardrobe. A real driver of value is the amount of available living space, with open plan dining, kitchen and lounge areas being the most popular. Other sought after factors are access to an outdoor balcony area and storage space. In short, how you creatively use the space, and how much there is available will have a big impact on the value of your apartment.
2. Location
There are around 26,500 apartments across 393 buildings in the Auckland CBD and surrounds. With the Auckland City Council relaxing laws and regulations around building heights and increasing demand for available land, the number of apartment buildings will soon reach 450. As previously mentioned, new developments can potentially devalue existing apartments by compromising views, privacy and natural light. As an apartment owner or potential buyer, it is therefore important to keep across the latest building and development consents in your area.
Some investors and owner-occupiers are thinking twice about living in Wellington's CBD because of the earthquake risk and extra cost of maintenance.
Given most apartments are concentrated in specific areas, the amenities and facilities available to those who live there are fairly similar. Each apartment building will typically have its own amenities like gyms, parking spaces, or sometimes even a tennis court or swimming pool. These added benefits are not available to most home owners and should be factored in to the value. In the suburbs, apartments may be larger, but they typically come with fewer amenities. In the CBD it’s generally the opposite. It’s not enough to look at an area to judge what an apartment could be worth. In some cases it literally comes down to a street-by-street basis.
3. Market fluctuations
Roughly 100-150 apartments are sold in Auckland every month, which works out to around three per day. Pavailable sales listings can sometimes be months old, which means you’re not getting an accurate picture of what’s happening in the apartment real estate market right now.
It’s not enough to compare your apartment to similar dwellings in the same building. You have to know what similar apartments are being sold for in surrounding buildings. There are cases where vendors have missed out on between $60,000 and $100,000 because their apartment was priced incorrectly based on sales statistics from months prior. The best way to keep on top of changes to the market is to speak to a real estate agent who specialises in apartments.
Read more: How to sell an apartment and strata title property
4. Future plans for the area
Is anything being built in the vicinity of your apartment building that might influence the value of your apartment? Local councils and central government are required to make future infrastructure plans publicly available and provide transparency with regards how taxpayer money is spent. Infrastructure is essential for keeping major cities like Auckland, Wellington and Christchurch moving, where public transport and access to amenities are necessary to maintain an active professional and social life.
A new or remodelled train station, bus lane or bus route could make inner-city apartments more accessible and shave crucial minutes off daily commutes. Around 70 developments will benefit from the new City Rail Link once it’s completed. Construction may be a nuisance in the short-term, but the finished rail system will add major value to these apartment buildings.
The answer to the question, "how much is my apartment worth?" will also be influenced by commercial consents for new malls or shopping centres. If you’re looking to sell your apartment and really want to know what it’s worth, then we’d suggest talking to a real estate agent that specialises in apartments.
If you are selling, or thinking of selling your house, then download our handy guide to help you through this journey.
