The dark side of the city's burgeoning apartment business
Falling rents and bad property managers threaten to bring down the grubby end of Auckland's apartment market, creating Hong Kong-style slums.
Sunday, March 20th 2005, 5:05AM
by The Landlord
While there is no evidence of a market-wide apartment crash - overall demand for apartments remains strong - the seedier of the city's 11,000 apartments are suffering what property watchers call a "market correction".Most affected are low-quality one-bedroom apartments, let to students, where rents have fallen by as much as $40 a week, unnerving owners and frightening off prospective buyers.
These apartments were bought in some cases by heavily leveraged buyers for as little as $1000 down on the promise of guaranteed rental income for two years. With rental guarantees expiring and a fall in the number of immigrants and foreign students, who traditionally underpin the apartment rental market, sale prices for smaller, less-desirable units have fallen.
Mayor Dick Hubbard, who last year threatened to rid the city of "ghetto-type" apartments, said the council would insist that developers took account of aesthetics when planning their projects. He said he would also seek to amend the district plan to stop developers building ever-smaller apartments.
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