Height of luxury

THE HEIGHT OF LUXURY

Empty nesters or downsizers are eyeing the luxury apartment market again following a Covid lull, says Suzie Wigglesworth, Bayleys’ head of apartment developments.

But while local interest has been subdued, that has not been the case with overseas buyers who have been eyeing up Auckland apartments big time since the pandemic.

“Certainly, since Covid hit the world the level of overseas interest in apartments, particularly in Auckland central, has grown phenomenally.”

While a foreign buyer ban exists, some apartment buildings had exemptions and those apartments are attracting big interest, Wigglesworth says.

One such building is The Cab in the Civic Quarter, where at least 25% or 30% of inquiries is from overseas.

“Many of those people have a reason to come to New Zealand, whether that be for business or they’re planning to send their children here to study, or they have some kind of connection be it permanent residency or through a relative.

“Obviously, with us being Covid-free or thereabouts, it’s a big drawcard for those people.”

Bayleys has been running a campaign for the penthouse and sub-penthouse stock at The Cab, and the penthouse is already under contract.

While she can’t disclose the price, Wigglesworth says it is in the $15 million to $20 million range.

“In terms of somebody spending that level of money on a penthouse apartment, you wouldn’t see many above $5m in Auckland at all.

“There are lots of $5m transactions but you very rarely get someone who comes along with $10m, $15m or $20m so it certainly is a special sale.”

While $5m still buys a lovely apartment, an extra $10m or $15m buys exclusivity and extras.

“Generally, you’ll have exclusivity to the floor so you’ll own the whole floor, you haven’t got to share it with anybody,” Wigglesworth says.

“When you get in the lift you don’t have to stop at any floor, you’re straight up into your apartment.

“You get a lot of car parking which you might not get with other units in the building. Often that might be valet car parking or it might have a certain degree of specialty.”

And penthouses get the best view.

“In the case of The Cab penthouse it’s quite a unique design. It’s 360 degree views really because it occupies the entire floor and it has a bit in the middle that opens up to the elements, which is like an internalised courtyard.

“You’ll often also get a lot higher specifications. You’ll get the top appliances, the most expensive flooring, kitchen bench, you name it. They generally go a bit overboard how they spec the apartments.”

Even so, buyers who can afford to pay millions of dollars often change the specs anyway.

“They often want to bring their own designers in and recalibrate the entire thing.”

A case in point are apartments in the Jervois & Lawrence Apartments in Herne Bay.

“Most of the people who were spending upwards of $5m didn’t really want what the developer had specified, they wanted to bring their own interior design flair to the apartment so many of those have ripped those apart, shall we say, and have started again.”

While a $15m to $20m apartment represents top-end luxury in this country, a $40m apartment is something else like the penthouse at the Pacifica skyscraper in Auckland central.

Wigglesworth says buyers of this calibre are looking for a trophy.

“Ultimately, it’s a statement about owning a floor in that particular building. That’s really what it boils down to,” she says.

“A lot of those people are trophy property collectors. They don’t necessarily spend any time in them. They might have a beautiful chalet in the Swiss Alps, they might have something in Italy, they might have something in America.

“They’ve got a collection of property and it’s about being able to say they own the penthouse at the Pacifica.”

And while buyers of this calibre are generally foreigners, Wigglesworth says there is plenty of local money around.

“You’d be surprised. We have more wealthy people than you’d probably think we do.”

New Zealand, however, tends to have a lower level of apartment luxury compared to places like London or Sydney, and there has also been a shift from developers delivering product for empty nesters in the CBD fringe suburbs to delivering affordable apartments.

The luxury market is not going away, though.

“I think there will always be a niche for that market. I think there will always be some developers who go after that market but whether that’s the CBD or whether that’s further afield is now the question,” says Wigglesworth.

The CAB in Auckland’s CBD is on the radar of wealthy Kiwis overseas. Photo / Supplied

The Pacifica is New Zealand’s tallest residential tower. Photos / Alex Robertson

The Sky Garden penthouse on the top floor of The CAB is under contract.

Photo / Supplied

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