Real Estate (a house or apartment) has two components - land and improvements. Improvements are building, driveways, fences, etc. Land appreciates in value. Improvements depreciate in value unless sufficient money is spent on maintenance.

Over time real estate appreciates in value so land increases faster than improvements depreciate. Apartments have less land than houses hence they don’t appreciate as fast as houses.

Whether a buyer chooses an apartment or a house to purchase a lot of factors need to be considered and how it will meet their needs. Space (floor area), number of bedrooms, bathrooms, garaging, outdoor living and so on.

 Sometimes front of mind but often more in the background such a buyer will have capital appreciation as a consideration. So how do Apartments preform financially compared to Houses?

Let’s see: Houses Vs Apartments - financial performance. The most accurate data is the Real Estate Institute of New Zealand (REINZ) house price index. The index groups together houses and townhouses but separates out apartments.

Here are the findings between 1992 - 2021: Auckland: Apartments did not increase in value as quickly as houses. Wellington: It is the same in Wellington as Auckland. Christchurch: And it is the same as Auckland and Wellington, apartments did not increase as quickly as houses.

So, the re-sale value of apartments is not as good as houses. What about ease of selling? In all cities - Auckland, Wellington and 
Christchurch it took longer to sell an apartment than a house.

This was the case from 1992 through to 2021 and is still the case today. Apartments may be cheaper to buy but that “saving” comes at a price!