Apartment market warnings disputed
City Sales managing director Martin Dunn said that Auckland’s dwelling supply shortage means recent reports an oversupply of low-quality apartments could flood the market, causing prices to crash, belied common sense.
On the contrary, he believes the ongoing shortage combined with the possibility some banks might drop the minimum deposit to purchase a new build apartment from 20% down to 15%, mean apartment prices are likely to go “ballistic”.
City Sales data showed the SuperCity’s apartment market was flat, in terms of apartment costs per square metre, between 2005 and 2012.
Since 2012, there has been a cost increase of about 50% from $4,000 per square metre, in the 2005-2012 period, to $6,000 per square metre now.
Given current circumstances, Dunn said there was likely to be an increase in apartment costs from $6,000 per square metre to $9,000 per square metre.
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