One of the perceived downsides of owning an apartment is the body corporate fee. These range in price depending on the apartment: If your block has a swimming pool, tennis court and elevator(s) then, of course, the body corporate fees are going to be higher – but you get to use the amenities at a fraction of the cost of owning it by yourself. The value of the apartment also affects the BC fee – the more expensive the apartment the more you are likely to pay each year. What many people tend to forget is that with your own home there are ongoing costs such as painting, roofing etc., while all of this, including building an insurance and sometimes water rates, is taken care of through the body corporate. The average price to paint a 4 bedroom home in NZ is well over $30,000 every 10 years, while the average cost to maintain a swimming pool in the US is estimated at over US$3,000 per year. So while body corporate fees may sometimes seem high, they are just a reflection of normal property maintenance.
There are quite a few options when it comes to apartments: City apartments tend to be directed more at the investment market and are often quite small (less than 50m2) and not something we would usually recommend to a first home buyer: Great return on investment but often limited capital gain. Next up are city fringe apartments, in areas like Newton, for example. Some of these are worthwhile considering as first homes, but the newer ones cost up to $16,000 per square metre. Suburban apartments are our personal choice. As we said we bought in Remuera. It’s a 1970’s build, very solid and has a swimming pool and tennis court, meaning the body corp is relatively high but it cost us less than $8,500 per m2, so –pretty good value compared to most newer apartments.
As we said last week, it all depends on what you can get for your money and how concerned you are about re-sale. Units seem pretty pricey at the moment while some apartments really do seem like better value.