One of the hardest types of property to buy in Auckland is a 2 bedroom unit or house. You need deep pockets and a strong will because the prices they are attracting are unbelievable.
What is it that makes them so desirable – often more sought after than 3 bedroom houses?
The strong demand for small houses in Auckland is the result of a number of factors
- We have a growing number of one person households
- We have an aging population and an increasing number of couples looking for smaller, single level homes
- We have a large migrant population, many of whom are used to living in small homes
- First home buyers are trying to take everyone’s advice and look for smaller homes
- Many new investors are also looking for a smaller property to get started on their investment journey
In previous decades these factors would not have created a problem as there were huge numbers of smaller houses and units being built and the supply could meet the demand and everyone was happy.
Then in the 1980s and 90s the trend of building units slowed considerably and today the number of 2 bedroom dwellings (other than apartments or retirement villages) being built is low in most parts of Auckland. And those being built tend to be multi-level such as terraced houses rather than single level which current buyers see as more desirable especially if they are older or have children and pets.
This unbalanced demand versus supply has a created a situation which has almost removed the price differential between 2 and 3 bedroom homes in parts of Auckland. Some recent examples I have seen include an offer being accepted on a unit nearly $50,000 over the asking price, another selling for more than $100,000 over an acceptable pre-auction offer and a very ordinary unit having an offer on it the day it was listed.
It is unlikely that the demand for smaller single level homes is going to decrease in the near future but I doubt that anyone is planning to increase the supply so I don’t see any change in this unbalanced situation happening soon. Good news for owners of these properties but another negative for those who just don’t want to own a bigger house.
Advising Auckland property buyers