Buying guide

Everything you need to know before buying an apartment in NZ

Thinking about buying an apartment? There are a few things you'll need to know before you start searching.

24 August 2023

The Kiwi dream used to involve a quarter acre and a white picket fence but apartments are quickly growing in popularity. It’s easy to see why.

They’re affordable, low maintenance and are often in enviable locations – perfect for city-livers, downsizers and first home buyers. To help you find the right property we’ve put together everything you need to know before buying an apartment in NZ.

How to buy an apartment in Aotearoa New Zealand

Buying an apartment in Aotearoa New Zealand is similar to buying a regular stand alone home or townhouse, with a few key differences. Here are the basics to get you started:

  1. You’ll need a 20% deposit to buy an apartment in most cases. Buying with a lower deposit may mean your lender charges extra or you incur a higher interest rate.
  2. If you’re eligible for the Kāinga Ora first home loan you may be able to buy with a 5% deposit, while apartments smaller than 50 sqm may require a larger deposit (up to 40%).
  3. Step one should be speaking to a lender to find out what you can afford and secure mortgage pre-approval.
  4. Next, you’ll need the help of a property lawyer to help with settlement, establishment of a new loan and to provide advice on the purchase.
  5. You can either buy an existing apartment off its owner, a new apartment that’s completed or an apartment off-plan. Buying an apartment off-plan means that you’re purchasing an apartment before it's built directly from the developer based on designs.

Due diligence is the most important step when buying an apartment. More on this below.

The pros and cons of buying an apartment

Pros of buying apartment

  • Affordability: apartments typically cost much less than stand alone homes, particularly in locations close to cities like Auckland, Wellington and Christchurch.
  • Location: buying an apartment may enable you to live in a more desirable location – meaning better access to amenities like cafes, bars and restaurants and a shorter commute.
  • Maintenance: most apartments require much less maintenance than stand alone homes because you’re only required to upkeep the interior of your space. That means less time and money spent fixing stuff.
  • Bills: because apartments are usually newer (and thus better insulated) and smaller, they typically cost less to heat and cool, meaning lower bills.

Cons of buying an apartment

  • Privacy: apartments may have less privacy as you could have neighbours all around you. Good design and sound proofing can help.
  • Space: apartments are typically smaller, meaning you may have less indoor and outdoor living space and storage.
  • Personalisation: you can usually only customise the interior of your apartment, not the exterior. Even then there may be rules about how you can change the interior.

Buying an apartment - due diligence checklist

Just like when you buy a standalone home it’s important that you carry out due diligence when buying an apartment. In other words – you need to do your homework so that you know exactly what you’re getting into.

Before you buy an apartment it's important that you do your due dilligence.

Ownership structure

There are two common types of apartment ownership with their own benefits and advantages:

  1. Unit title or freehold: you own the unit and collectively you and the other apartment owners own the land underneath.
  2. Leasehold: you buy the apartment but you don’t own the land. You pay a ‘ground rent’ to the landowner every year and when the ground lease renews rent can increase. As a result, leasehold apartments are generally cheaper upfront.

Most buyers prefer unit title or freehold apartment ownership because there’s more certainty around cost. Banks may also be more hesitant to lend to you if you’re buying leasehold.

Apartment body corporate

Most apartment blocks have a body corporate and, when you purchase a unit, you become a member. The body corporate is responsible for managing the maintenance, finances and administration of common areas and the property’s structure. As part of the body corporate you’ll need to pay body corporate levies to contribute to maintenance. This varies depending on the apartment but tends to be around $5,000 per year.

It’s important to understand the rules of the body corporate, their financial position, and whether there are any upcoming special levies (one off costs that the body corp charges residents for) before you buy. Your property lawyer can help you with this.

Apartment insurance

Most body corporates hold insurance that cover the structure of the building, plus plumbed and hardwired appliances like toilets, aircon and showers. Before you buy it’s important to check that your body corporate has insurance.

If your apartment doesn’t have a body corporate you may need to buy your own insurance. (note: while your apartment may have building insurance, you’ll still need to insure your personal belongings).

Pre-purchase inspections

Weather tightness or structural issues in apartments can prove costly down the track, so it’s always best to avoid them if possible. That’s why it may be a good idea to carry out a pre-purchase inspection before you buy.

You’ll receive a report that lists any issues, upcoming maintenance requirements and more – so that you can make an informed decision.

Apartment amenities

Apartment complexes often include useful stuff like gyms, saunas, outdoor terraces, barbeques and sometimes even cinemas. Others include barely any amenities. It’s important to make sure you understand which amenities are included before you buy.

More amenities seem like a good thing, but keep in mind that it can also mean higher body corporate fees. 

Filter by location to find an apartment right where you want to be.

Apartment location

When living in an apartment, chances are more of your day-to-day life will be spent out in the cafes, libraries, shops and community facilities around you. That’s why it’s so vital to research your apartment’s location before you buy.

Consider your access to public transport, amenities, cafes, restaurants and the length of your potential commute. And before you buy – spend a little time in the neighbourhood to make sure you like it.

Apartment rules and restrictions

Your apartment’s body corporate will have its own unique set of rules and restrictions. These will include general rules around noise, rubbish disposal, parking and use of common areas – as well as more specific rules such as:

  • Bans on pets or restrictions around the size or type of pets allowed.
  • Hours of use for common amenities such as pools or gyms.
  • Restrictions around real estate signs and hanging out washing.
  • Guidelines to follow around the external appearance of units.
  • Restrictions around internal fit-outs.
  • Ban on short term accommodation rentals or rules restricting it.

Before you buy it’s worth asking your lawyer to check these rules so that you fully understand what you’re getting into before it’s too late.

The size of the apartment

It’s generally easier to purchase an apartment that’s over 50m2 in total size. That’s because apartments under this size are seen as riskier investments by lenders and banks.

Your lender may decline finance on an apartment under this size, charge higher interest rates, or require a higher deposit of up to 40%. With that in mind, depending on your circumstances – it may be better to only consider apartments that are 50m2 or bigger.

Buying an apartment FAQS

Are Auckland apartments a good investment?

Apartments in Auckland can be a good investment, as can apartments in many other areas around Aotearoa New Zealand. However, on average they tend to experience lower value growth and higher rental returns (yields) than stand-alone homes or townhouses. 

As with any property, it’s important to do your homework before buying an Auckland apartment as an investment. 

Can foreigners buy an apartment in NZ?

Generally buyers who are based overseas and aren’t NZ citizens can’t purchase residential property in Aotearoa New Zealand, with a few exceptions:

  • Australian and Singaporean citizens can buy apartments in Aoteraoa New Zealand as long as they aren’t deemed to be on sensitive or commercial land.
  • Most foreign citizens can also buy new apartments that have an ‘exemption certificate’. They must buy directly off the developer.

Read our article on buying property in NZ as a foreigner for more information.

What's the best floor to live in an apartment?

Depending on your personal preferences, the best floor to live on in an apartment may be the top floor. The top floor is usually quieter and less susceptible to break-ins than ground or floor one apartments. It could also receive more natural light and have better views.

These benefits usually come at a cost – apartments on higher floors are often more expensive.

With all that said, lower floor apartments can have their benefits too. Ground floor units may have more options for outdoor space such as courtyards. If your apartment doesn’t have lifts the ground floor could be easier to access.

How much are body corporate fees for apartments in New Zealand?

Body corporate fees for apartments in Aotearoa New Zealand can vary considerably, but average around $5,000. You may pay more or less depending on your apartment’s amenities and the cost of building upkeep.


Ben Tutty
Ben Tutty

Ben Tutty is a regular contributor for Trade Me and he's also contributed to Stuff and the Informed Investor. He's got 10+ years experience as both a journalist and website copywriter, specialising in real estate, finance and tourism. Ben lives in Wānaka with his partner and his best mate (Finnegan the whippet).