Ray White City Apartment auction in Lorne St. Photo / Ted Baghurst
Ray White City Apartment auction in Lorne St. Photo / Ted Baghurst
The profile of apartment buyers in Auckland's CBD is changing, says Phil Horrobin, managing director of Ray White City Apartments.
In the last 18 months, more owner-occupiers - first home buyers and people downsizing - have been buying city apartments, a market traditionally dominated by investors.
"People are starting to realise the benefits and the conveniences of living in an urban CBD rather than a commercial CBD," he says, singling out as an example, how the dynamics have changed in Lorne St, where his offices are based.
"You come into the city now after hours and at the weekend, and Lorne St is just alive socially.
"Sunday morning, this is a place you see people coming to have breakfast whereas once upon a time, all you would get was a draught up the main street.
"You see people cycling, jogging, walking their dogs; it is taking on an urban underlay under the commercial activity that is going on."
Horrobin attributes some of the rise in popularity of CBD apartments to the lack of infrastructure that Auckland is experiencing.
"It is also the beneficiary of a changing CBD, supermarkets. There are probably five supermarkets within 1.5km of here, whereas four years ago there was one."
And though investors focus on yield, owner-occupiers are looking for a lifestyle within the apartment.
"The apartment flow, views, balconies, amenities and what is around it. So we have the two totally different markets there with different needs."
Also, buyers are realising it is not the end of the world if the apartment sale doesn't include a car park.
"They might come into the office with a car park high on their wish list, but they soon realise other features are more desirable," says Horrobin.
"And you do have to give public transport a pat on the back. You can use trains and buses to get around Auckland, you have ferries to Devonport and Waiheke, and the inter-city buses if you want to get out of the city.
Phil Horrobin. Photo / Ted Baghurst
"For instance, our top salesperson doesn't have a car; he walks or uses public transport." Horrobin believes his weekly auctions at the Lorne St offices every Thursday are still the most effective way to sell apartments.
"We are still gaining more than 75 per cent clearance rates at auction," he says.
"The auctions are the most vibrant in Auckland. The auctioneer stands in the middle of the room, everyone surrounds him.
"Depending on the numbers, we get through 12 or 15 in an hour and 20 minutes. It is a fast pace but if negotiations need to be done, we negotiate the deal there and then.
"People comment that they like selling through us. We are a selling agency more so than a purchasing agency."
His office's market share of Auckland apartment sales is currently around 42 per cent.
"We have about 65 dedicated apartment sales people; some have been in the business 18 years, since the onset of the apartment growth."
Though the focus is selling existing Auckland apartments, his office does sell unit titles in other parts of the country as well as developments off the plan.
"Our apartment business has been our core business - but because of the developments that have been going on, we have a separate specialist projects division that not only advises our clients but confers with developers over what the buying public want. That market is getting a heck of a lot more confidence in it.
"With the new regulations, nicer designs and capital growth, people are coming back and recognising the benefits of off-the-plan purchases.
"Auctioneering is still the preferred way to sell apartments; it creates the competition. Also, an auction campaign has a start and a finish date.
