Off-the-plan apartments are cheaper than existing housing in Auckland for the first time.
File photo. Photo: 123RF
Research from the real estate firm CBRE shows the price of the average two bedrooms, off-the-plan apartment had fallen more than 20 percent in the past four years to about $860,000.
Meanwhile, the average house price in Auckland had increased by about 30 percent in the past year to well over a $1 million.
CBRE associate director of research Tamba Carleton put the price shift down to off-the-plan apartments shrinking in size in recent years, and being in low-rise buildings.
"In a building of four or more levels you have to provide elevators and you have to provide sprinkler systems.
"Both of these are additional up-front costs to install but there are additional maintenance costs as well, so this increases your body corp [costs] for residents."
Walk-up properties of two or three stories did not need to meet such requirements, she said.
The research said increased collaboration between private developers and the KiwiBuild unit had helped put downward pressure on the prices for these types of properties.
"[The price caps] used to be $650,000 for a two-bedroom unit, developers would need to be quite creative, reducing their unit size or utilising the walk-up methodology to hit this price cap," Carleton said.
"But the benefit of using KiwiBuild is that was an underwrite of sales, so they could start construction straight away and that really reduced the construction timeframe and that's a cost to developers."
Carleton said demand for these types of properties were increasing in popularity.
"The two most recent quarters had more pre-sales than all four quarters in 2019 combined."
Meanwhile, ANZ, the biggest housing lender, is changing its lending rules for apartment buyers.
Under the new rules, buyers only need a 20 percent deposit for freehold, standard apartments that are 38 square metres or larger.
Previously, any apartments smaller than 45 square metres required a 50 percent deposit.
