The few bright spots in auction results these past two weeks have real estate agents hopeful for a rebound in the spring as location, presentation, zoning and a realistic reserve price contribute to great sales results in the auction room.
Ray White Manukau co-owner Tom Rawson, whose team this week sold seven out of seven houses under the hammer, said he is surprised every now and again at the results. He cited one family's fortunes at yesterday's auction as an example.
The vendors were convinced their home wouldn't sell under the hammer and had decided not to attend the auction. The house ended up selling for $1.31 million, after strong competition from three bidders took it over its CV of $1.25m.
“They signed their reserve number, but didn’t think the house would sell so they didn’t come in to watch the auction and instead stayed at home. We didn't expect the result we got. The vendors were ecstatic, jumping up and down at their home,” he said.
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“This week we had owners at home – they'd signed their reserve number, but didn’t think it would sell so they didn’t come in. They were ecstatic, jumping up and down at home, but we didn’t expect that result,” he said.
He said that while it was hard to tell when properties were listed just what might spark buyers, usually three weeks later by auction day, agents have a fair idea of the outcome.
“It all comes down to vendors having a real motivation to sell. People [buyers] can tell that they’re not testing the market, they’re committed to selling.
“Buyers want to know that people are serious about transacting.”
A property on Great South Road, Manurewa, ripe for development, had 62 bids before selling for its CV of $1.125m. Photo / Supplied
Rawson pointed to the top sales of the day. The first, a trio of two-bedroom flats on Rodney Street, in Otahuhu, sold for $1.24 million after 51 bids drove the price to just under its rating valuation of $1.35m – well above its on the market price of $1m.
He said a property like this, on a popular street with zoning for suburban density, attracted a wide range of buyers – there were 10 registered bidders – including tradies who could renovate and sell, investors looking for good yields after renovation or land bankers with an eye to future development.
The big bidding was for a four-bedroom 1940s house on a 878sqm lot on Great South Road, in Manurewa, that is “gold in our neck of the woods,” Rawson said.
It had the combination that sells: zoning for urban density, minutes from the train station and shops, and vendors motivated to sell as they had bought something else. After 62 bids it sold to developers for $1.125m, bang on its CV and way more than the approximate $200,000 which records show the owners of 25 years paid.
Rawson said the key to bringing in the bids was a realistic reserve price.
“It shows we’re playing for keeps, it’s not just wait and see. The auction room was packed,” he said.
Four bidders fought for a five-bedroom house and studio on Elizabeth Avenue, Papatoetoe before the hammer came down at $1.4m. Photo / Supplied
That strategy of a realistic reserve paid off last week for the vendors of a five-bedroom home with a two-bedroom studio on Elizabeth Avenue, in Papatoetoe, marketed by Barfoot & Thompson agents Yogesh and Kam Dahya.
Bidding on the home on an 860sqm section zoned for suburban development, billed for development potential, started at $900,000 – but 45 minutes and 212 bids later, the hammer came down at $1.4m, well above its CV of $1.25m.
Yogesh Dahya told OneRoof that the four bidders, all developers, were locals so knew there was a future market for new homes.
“It’s a good buy at $1.4m, [a] year ago similar properties in the area were getting $1.8m. It was very hard to tell, but the vendors had a reserve of $1.18m and then it just kept going past that,” he said.
“A couple of other developments on the street were finished and sold last year, Papatoetoe is starting to get a revival.”
The Dahyas also sold a two-bedroom unit on Clark Road, in Onehunga, under the hammer for $770,000. The flat, which had a CV of $900,000, had just one bidder, a sign, Dahya said, of the struggles first-home buyers have of getting bank approval to make unconditional bids at auction.
At higher prices, buyers are ignoring CVs.
Barfoot & Thompson agent Paul Neshausen, who sold a three-bedroom 1990s house on Tamaki Drive, in St Heliers, under the hammer for $4.1m said that buyers know CVs are “the luck of the draw”. The sale price was in the mid-level of what the agent had appraised the house for – and $250,000 less than its $4.35m CV.
“We had three bidders, all interested in a price starting with a $4m. It took a while, but the buyers wanted Tamaki Drive, not an apartment, and the lift meant it was future-proof.”
A block of three flats on Rodney Street in Otahuhu had 51 bids, selling eventually for $1.24m. Photo / Supplied
Neshausen said there was a dearth of quality properties for buyers, as vendors were now holding onto to their properties.
“There are six buyers with $6m to $10m to spend. I know them all. We’re just starting to see a spring in the step in the market,” he said.
In south east Auckland, Barfoot & Thompson agent Julie Parmenter said the packed open homes for a smart modern five-bedroom home on Whitford-Maraetai Road near Beachlands tipped her off that the auction would go well.
A pre-auction offer of $3.25m brought the auction date forward and four bidders drove the price up another $42,000 to $3.67m, $820,000 above CV.
Four bidders fought for a five-bedroom house on Whitford-Maraetai Road near Beachlands in south west Auckland before it sold for $3.67m. Photo / Supplied
“It was really exciting build-up, it really felt like 2021, and things had been so bad,” she said. Parmenter said the combination of location, just five minutes from the Pine Harbour ferry, a small, flat section (the property was on 1.26ha) and great presentation all helped.
And while there were bargain hunters hoping to get it for less than $3m, Parmenter said buyers’ confidence was boosted by seeing lots of other people interested in the property.
“We’ve had three properties in the last six weeks all selling under the hammer for around $3m to $3.5m. They all had a rarity value, all were unique and in top locations, they all had good open-home numbers.
“Regardless of how things are, people are listing $3m to $4m, by spring there’s even some over $10m coming to market,” she said.
