With hundreds of fixed term rental agreements on Auckland CBD apartments about to expire, investors are worried about the potential for rising vacancy levels and falling rents. Smaller inner city apartments, sometimes referred to as shoeboxes, are particularly popular with overseas students. However, overseas student numbers are continuing to decline due to COVID-19 restrictions on international travel.
The number of people in this country on student visas declined by more than 17,000 between March and November, while the number of new student visas issued is down by 90% compared to last year. That has CBD apartment landlords worried about rising vacancy rates putting downward pressure on rents and those same concerns are making investors re-evaluate how much they are prepared to pay for such properties.
However, larger apartments that are more likely to appeal to owner-occupiers and are often located in the suburbs, are not facing the same pressures.
Investor caution is evident at the main Auckland apartment auctions, where prices for smaller CBD apartments are often well down from previous highs and many are being passed in, as a widening gap opens up between the prices buyers are prepared to pay and the prices vendors are prepared to accept.
However, on the bright side, City Sales report that they have started the new year strongly, with a record number of new listings and there are some very good deals out there. City Sales’ Scott Dun says people should remain positive, and he advises snapping up these new listings now, as we don’t yet know what 2021 will bring.
City Sales will continue to provide expert consultation and representation regarding apartment sales, property management and housing investment in 2021, and for more information on buying apartments, property management Auckland and selling a property please go to http://www.citysales.co.nz .
