Auckland's strong growth is putting pressure on commercial and industrial property prices as well as residential values, says John Church, national director commercial for Bayleys Real Estate, in his introduction to Bayleys' latest Greater Auckland magazine.
Church cites the latest figures from global property research company Investment Property Databank (IPD), which revalues a portfolio of close to $13 billion worth of predominantly higher value New Zealand office, retail and industrial property on a quarterly basis.
IPD shows significant lifts in Auckland values with the most recent valuations, for the year to March 2015, recording annual capital value increases of 7.3 per cent for Auckland office premises and 5.1 per cent for Auckland retail property. Industrial capital gains are seven per cent in East Tamaki, 6.6 per cent in Mt Wellington, 3.6 per cent for Manukau and the Mangere airport precinct; and 2.7 per cent in Penrose.
Church says while these increases are not as spectacular as the 17.7 per cent increase in the Auckland median house price recorded by the Real Estate Institute of New Zealand (REINZ) for the April 2015 year, they still represent good returns for investors. "This is particularly so when adding on commercial property's attractive income returns which are generally considerably higher than for residential property."
He says one of the key drivers of the increases in both commercial and residential property values in Auckland at present is the big surge in population that the city is experiencing. According to Statistics New Zealand, immigrant arrivals into New Zealand reached a new high of 113,800 in the March 2015 year, up 16 per cent from the previous year.