The Quashed Blog
The appeal of apartment living in New Zealand
31 October 2020
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As house prices continue to runaway towards $1M (median sale price) in Auckland, apartment living may be the only affordable option for those wanting to own their own home. For others, the appeal of a fuss free lifestyle is an increasing lure away from the traditional house and land setup.

Below we look at 3 key things to consider when it comes to apartment living:

  1. Lifestyle

  2. Body Corporate

  3. Affordability

The apartment lifestyle

Apartment living has long been considered low maintenance; suitable for first home buyers (think millennials with a passion for travel and cafe culture) and retirees. The idea of not having a lawn to mow, weeds to kill and the ability to lock up and leave without a worry when globe trotting sounds almost too good to be true. Before the last decade, apartment living was unpopular in New Zealand. Land was plentiful, houses in good supply and the longstanding Kiwi dream of owning your own quarter acre when you choose to settle down was still achievable. 

Fast forward to 2020, as house prices continues its meteoric rise leaving predictions and economic uncertainty behind, apartments are popping up all over major cities across New Zealand. In Auckland CBD and city fringe alone, it's easy to see the extent of apartment development with more high rises and cranes than one can count while driving around town. Pacifica, Grace, 59France, The International, The Vulcan, SKHY, SugarTree... and many more. However, apartment living is no longer confined to city centres but has spilled over into the suburbs much further away. Places like Albany, Long Bay, Onehunga, Manukau and even Silverdale in Auckland are no longer strangers to apartment blocks.

What exactly is fuss free with apartment living

When it comes to being fuss-free living and easy maintenance, apartment living ticks a number of boxes. For example, you won't have to worry about having council rubbish bags or wheeling out the rubbish bins (especially on cold rainy night) for the weekly collection. Painting and cleaning the outside of your home will be sorted for you. There will be no lawns to mow or weeds to kill. For most, but not all apartments, electricity and water will be ready to go without the hassle of finding a provider. House insurance will usually be taken care of by the Body Corporate which leaves you with one less insurance to sort out amongst your many others. However, don't forget that Contents insurance is not included. Pro tip: Quashed is an online portal where you can easily store, view and manage all your insurance policies! Whether you're living in a home or an apartment, one way to make life easier is to sort out your insurance using Quashed

Apartment living can be especially suited to those that likes to dine out and travel. Smaller kitchens are a norm in apartments and therefore if you like to cook up a storm, either find an apartment with a larger than normal sized kitchen or enjoy more of your local eateries. For travellers, apartment living is beneficial as locking up and leaving will certainly give you much more peace knowing your letter boxes will not start to pile up with mailers and your lawn will not giveaway that no one is home.

Apartment living for how fuss free and easy it is has its own quirks. If you enjoy open spaces and a much quieter lifestyle, apartment living may not be for you. However, if noise is your worry, many newer apartments are well fitted with good sound proofing (e.g. double glazed windows) and therefore this may be less of an issue.

Every apartment will have its own set of rules that owners and/or tenants will have to follow. These rules are usually agreed upon by all owners and it is there to make it easy to live with one another especially when you're in much closer proximity. These rules can include where to dispose of rubbish, storage of items outside of your apartment unit, laundry in the balcony etc. While it can seem like apartments with lesser rules are better, from experience, the ones with well thought out rules can make it a much more pleasant place to live for everyone. 

Breaking down Body Corporate

Simply it's the "body" (group) that represents all of the apartment owners to manage the running and maintenance of the apartment. Purchasing an apartment in New Zealand automatically puts you into a Body Corporate. This means you are now subjected to the rules of Unit Titles Act which essentially outlines your rights and responsibilities as a unit owner. Think about the collection of rubbish, the cleaning of common areas, painting of the building, supply of electricity and water, the rules that apply to the people living in the apartment, etc. All these are decided on by the Body Corporate committee. Typically there is an annual meeting (AGM) where the owners can attend and vote for who will represent them in this decision making. There will also be a bunch of matters that will be discussed and decided on so that things get done. It's important to be aware of this as the decisions made can impact on you and the way you live in the apartment. 

Each Body Corporate will have decide on a fee that owners must pay each year. This money that is pooled will then be used to maintain the apartment so that essential services like rubbish collection and cleaning, and other activities like maintenance of lifts, swimming pools and payment for the building's insurance can be met. Again, another reason to be aware and attend these meetings so that you will know how your money is spent. 

If you have heard stories about expensive Body Corporate fees, they will typically be due to having swimming pools, gyms and other amenities that will cost more to maintain. If you are price conscious, look for apartments that do not have these amenities and ones with fewer lifts. Once again, looking at the Body Corporate reports will give you an idea of where the money is going. 

Is an apartment really cheaper than a house

Generally, apartments are more affordable as compared to standalone houses. The NZ Herald reported last year that average Auckland apartments cost $545,000 as compared to $935,000 for a home. In current market for example, an apartment with 2 bedrooms, 2 bathrooms and a carpark in a suburb on the North Shore of Auckland can cost between $600,000 to $800,000 whereas a standalone home in the same suburb would cost roughly 1.5x the amount. So when it comes to affordability, if banks only require a buyer to have 10% equity, that would mean you will be able to own your home with $60,000 saved instead of $100,000+ for the average standalone home.

Do note that when it comes to borrowing from banks to purchase an apartment, different restrictions may apply. For example, some may only lend to apartments that are more than 60sqm in size, while others may have a minimum equity % that is higher when compare to a standalone property. Therefore it's wise to speak to a bank or broker before you go ahead and make an offer on an apartment. 

Remember, while you do get to save some maintenance costs with an apartment, you will have Body Corporate fees to consider. But overall, living in an apartment can cost less than a standalone home even when considering Body Corporate fees. 

Last words on apartment living...

Those that are on the hunt for apartment living are no longer short on choice; be it in the city or city fringe, or further out in the suburbs. Whether it's the lifestyle that appeals or the price point, one thing is for sure - apartment living is here to stay.

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