New apartment dwellers more hip op than hip hop

The inner city apartments were supposed to be new homes for trendy young things.

But, heaven forbid, oldies are buying them up.

Developers and city planners envisaged a shift by young urban professionals into the city’s centre as new apartments came on stream.

But the buyers are just as likely to be the older generation.

Williams Corporation has sold three-quarters of its 39 one-bedroom units in its development, 420 Hagley Ave, overlooking Hagley Park. Their main buyers? Older Cantabrians keen to invest and downsize.

Starting at $375,000, the Hagley units are at the lower end of the new apartment market in Christchurch.

Williams’ managing director Matthew Horncastle said they were surprised their customers were significantly older than envisaged, as none of their marketing had been geared to that demographic.

“We truly thought our biggest market would be first home buyers.

“We have lots of Kiwis mum and dad investors that plan to retire there in five years. They say ‘I’ll buy it now because I know they’re never going to be cheaper. I’ll get a tenant in there then I know I have a place to retire in five years.”

Vera Kocon and her husband, who are approaching retirement, have bought one of the cheaper properties on Hagley. The couple are dairy farmers in Oxford but plan to eventually retire in the city centre where cafes, restaurants and amenities are all around.

Kocon said they didn’t want to spend any more than what was necessary.

“If I can get one here, right at Hagley Park, in my eyes it can’t get much better, 60 sq metres, high ceiling, double and triple glazing, perfect.

“Compared to somewhere in the middle, where I have all around me, apartments and buildings, so when I look out of the window all I see is another building for another 150 thousand, it doesn’t add up.”

She said a big concern when buying was being able to eventually on-sell the property and something more affordable would be easier to sell. She thinks over $500,000 is out of most people’s range.

“The younger generation and lots of people don’t have the money.

“I know how it is at the moment trying to get money from the bank, they are really hard on servicing so I think it’s a big difference.”

Fletcher Living’s Atlas Quarter apartments, on Welles Street, start at $365,000 and Fletcher has sold 24 of the 96. A spokesman said they had had a broad range of customers including retirees down-sizing from family homes.

Mark O’Loughlin from Harcourts, who has been selling Prestos Residences on Worcester St, said there had definitely been interest from the older generation.

O’Loughlin said seven of the 31 apartments sold had gone to semi-retirees or retirees, with the rest going to investors, ‘lock-and-leave’ buyers, people downsizing from rural properties and first-home buyers.

“We knew that mature market has always been there. That market hasn’t changed from pre-earthquakes, that market has been there for decades,” he said.

It’s not the only surprise for developers. Those building high-end apartments are not getting the demand originally expected.

Bob Parker’s New Urban Group has applied for resource consent to cut the number of apartments in Cranmer Gardens from 39 to 30. The $75 million complex is at the high end of the apartment spectrum, with apartments ranging from $1m to $3.7m.

Meanwhile, a proposed upmarket three-tower multi-million dollar apartment development in Park Tce being has been withdrawn and the land sold.

Cranmer’s body corporate fees range from $5,000 to $9,000 on top of rates, and Hagley’s are $1,100.

Horncastle said high-end developers in Christchurch had assumed that well-to-do boomers would invest heavily in high-end apartments, but instead those same buyers had drifted towards the more affordable end of the market.

“Too much emphasis on the high-end for baby boomers. I think there’s a lot more wealthy people than you realise that just buy a small apartment and have some money in the bank.

“People really like the idea of having the exact size space they need. The days of leveraging everything up to the eyeballs are over.”

Reference:
https://www.stuff.co.nz/the-press/news/105302064/new-city-apartment-dwellers-more-hip-op-than-hip-hop

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