APARTMENT OWNING & LIVING

View from a two bedroom Ponsonby Apartment that is available through crowd sourced property investment start up Opoly

The way we are living is changing. A single dwelling on a large section with a standalone garage is fast becoming a thing of the past. City fringe living is becoming more and more high density and the urban buzz hums everywhere except in the pockets of protected heritage homes in our more leafy streets.

The pressure on inner city suburbs to ease the burden of Auckland’s housing crisis is real and the number of consents to January 2021 in Auckland for apartments, flats and townhouses is almost equalling that of stand alone houses.

The most visible increase is the number of new and redeveloped apartment blocks in the wider Ponsonby area. If you are looking for an apartment the range of options is now vast, from old to new, small and modest to large scale luxury. There are complexes designed with the view to rent out and there are those developed especially with owner occupiers in mind. Along Great North Road there are multi million dollar luxury apartments that are snapped up by offshore investors and then there are more simple buildings that were built over a decade ago that may suffer from water tightness.

Whether you want to rent, buy, become an owner occupier or invest in an apartment for your future, it’s a way of living that’s set to dominate our city fringe landscape. However, it shouldn’t be viewed as a compromise on how you live. In fact people are now recognising just how attractive apartment living is and the many advantages that come with it. Whether you’re already on the property ladder or about to begin the climb, apartments should definitely be on your radar.

Perfect for modern apartments, Torii modular seats play with round edged volumes and thin profiles, available from ECC

If you are wondering how you might break into property investment in these times of skyrocketing house prices, Opoly, the property investment company launched last month by Issac Williams and Felix Watkins, might be just the ticket. We talked to Issac about how their inaugural crowdfunding model for property investment works and what it could offer those who are yet to buy their first home or investment.

No matter which way you look at it, apartment style living is no longer considered a compromise.

Julie Emmerson of the design store ECC agrees, and provided some pragmatic tips that ensure even the smallest apartments need not suffer from poor interior design.

We also talked with city fringe apartment specialist, Craig Watkins of Apartmint, to get an understanding of what he believes are the most important things to consider when looking to invest in an apartment and what to avoid.

Not all apartments are equal and what might have been a great investment a decade ago isn’t necessarily the same now. According to Craig, apartments that were bought solely for the purpose of renting out to international students, have seen their values suffer in a post-covid environment, whereas those bought as homes to live in by owners have continued to appreciate. It is this higher end owner-occupier market that Craig believes is a clear sign of a continually maturing local apartment market. “It’s partly driven by returning Kiwis who are used to apartment living, but it’s also a changing psyche where people are now happy to forego the 1/4 acre section to eliminate the commute,” he says.

With the cost of building new apartments continuing to rise, buying off the plans offers some distinct advantages. “Buying ‘off plan’ often results in a windfall gain for the purchaser at a cost to the developer,” Craig explains. “When the purchase price is fixed, the buyer gets leverage on their 10% deposit and unlike buying an existing property there are no management or maintenance issues during the two to three year timeframe it takes for delivery.”

In Craig’s mind this makes for a no hassle investment where on completion of the development you can choose to either: move in, rent out or sell for a profit. “As an example, if you place a 10 percent deposit on a $1M apartment and prices appreciate at a modest 5 percent per annum, the apartment is worth $1,157,000 on completion.” However Craig suggests caution with older apartment blocks as buyers run the risk of having to deal with issues like weather tightness or more tricky, a building with a dysfunctional body corp.

Thoroughly reading historical body corporate minutes to understand how well they function is something Craig recommends is a ‘must do’.

Views from Craig Watkins’ Vinegar Lane apartment

“Ask to see the minutes and look to see whether issues are being resolved quickly. Identify what problems the building has and look to see how funds are being accrued for long term maintenance - items like elevators,” says Craig. It’s often the case that a smaller building with less owners can be a better option as there is less likely to be friction within the body corporate. This is an important consideration regardless of whether you plan to live in, or rent a property out.

Craig knows first hand what it’s like to be part of Auckland’s apartment living movement. “My family home is no longer a large villa but an apartment in Vinegar Lane. It offers the same size as a villa but has exceptional sun, views, security and privacy. I wouldn’t go back to a stand alone dwelling,” enthuses Craig.

It‘s a trend that Julie Emmerson, furniture showroom manager of design store ECC agrees isn’t one that dictates a compromise on how you live or your ability to create great interior style. Timeless well designed furniture and home decor aren’t limited by apartment living. “Many leading European furniture designers craft models specifically for apartments, which is a more common mode of living overseas,” explains Julie.

While some new luxury apartments are extra large, other’s have a smaller footprint and if yours isn’t super sized Julie’s advice is to seek out design pieces that have been developed with this in mind. It’s about considering the scale. “In an apartment where space may be more limited it’s best to choose sofas up to 220-240cm in length and to look for designs with thin profiles. Sofas with small armrests and compact seat depth are better choices and angled sofas are great for creating an intimate conversation space without taking up a lot of room,” says Julie. It’s sometimes the nuanced choices that really make urban spaces distinct and functional homes. “Swivel chairs are great and are really useful in apartments with views. You can turn towards the view without the need to reposition the chair.” A swivel chair from ECC is a perfect example of great form and functionality.

“Beyond the traditional nesting coffee tables you can also overlap low tables with ottomans. Both are good space savers,” says Julie. It’s about identifying how you are going to live in your apartment that should guide your choices. If seated dining and entertaining is a priority, then a large table could be a feature, but if you are after more of a functional balance, round dining tables are often the best choice.

Of course it all comes down to what you are wanting an apartment for: do you want a place to live? Are you wanting to generate regular cash flow, or are you wanting a means to grow your capital?

When you are looking to purchase a new apartment Craig recommends considering the following:

• What are the proposed body corporate fees and watch out for the fact that shared amenities like pools and gyms often come with higher price tags.

• Is the developer reputable and do they have a good history.

• What’s the level of specification detailed in the marketing information.

• Is there efficient apartment design that minimises circulation space.

• What’s the general outlook.

• What local amenities - including green spaces, shops or transport hubs is the apartment close to.

“Round dining tables in the 120-140cm range are really well suited to apartments, especially the ones with a central base that makes walking around them easy. This is also true for barstools that have a stem base because they avoid the obstacles created by chairs with four legs,” she adds.

ECC are experts when it comes to innovative interiors and lighting and a key part of their ethos is appreciating that form and function are essential partners to good design. “Mirrors are useful to give the impression of a larger room and also bring reflected light and views into the apartment,” shared Julie. A slimline console placed under the mirror is a great way to both create space and storage and there are some really innovative options to be discovered within the ECC collections.

Remembering to consider the logistics of getting your new furniture into the apartment is also important. Most service lifts cater for objects up to 2m in length so it is good to know that you can purchase dining tables with tops that are in two halves, or beds that have a split base. It all makes the practical side of moving them in considerably easier.

CRAIG WATKINS. Since the 1990s Craig has worked in the apartment development market, and his company Apartmint sells development sites, off plan apartments and manages apartment rentals in the greater Ponsonby area.

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Making things easy when it comes to property investing is one of the key motivators for the brains behind new tech startup, Opoly. Set to change the way we invest in property through the development of a crowdfunding model, Felix Watkins, and Isaac Williams are making investing in real estate accessible to a much wider range of people.

Starting with a fabulous Ponsonby apartment, Opoly offers potential investors the opportunity to buy blocks of this popular city fringe property. Once an investor owns a block, or blocks, they can enjoy an ongoing rental return, plus a potential capital gain for their share of blocks when the property sells at a predetermined date in the future.

“We chose Ponsonby because it historically and consistently offers a high capital return rate. It usually sits just over 8 percent per annum, and in terms of a rental investment it’s a highly desirable and highly demanded area to live in,” explained Isaac. These are all important factors for a crowd sourcing model that aims to provide investors with both a regular return and a capital gain.

A qualified real estate agent, Isaac saw a gap in the market. “There are a good portion of people keen to get on the property ladder but in the current conditions, it is more than a little difficult. By developing a crowd sourcing model we are giving people a chance to invest starting from just $100.”

But how does ‘block investing’ work? It’s an approach that allows a really low entry point to investing in property. Each block of a property is valued at $100. The more blocks you buy the more you have invested in the property. Your blocks earn you a portion of the rental income and when the property sells at a predetermined date by auction, you receive your return of capital and any gain on sale made over the hold period.

Just before the official Opoly launch last month, Felix and Isaac were optimistic that the sale of blocks in the first property would be fairly swift. “We already have a lot of investor interest so I don’t imagine there will be many blocks left by the end of April.”

This of course is only the first of many properties set to be marketed and made available on Opoly, so there will be other opportunities to invest in your first apartment as the year goes on if you missed your chance with this one.

Felix Watkins of tech start up Opoly