Fierce investor activity is driving South Auckland's real estate market post-lockdown, with do-up homes selling quickly, according to real estate agents.
Adam Thomson, director of Ray White Manukau, says turnover is fast and this month has been his team’s best month for some time.
“We’re probably up 20 percent on June last year for sales, and prices are ahead of what they were. We’re seeing no decline.”
On auction day last week seven out of seven homes sold with a mix of first home buyers and investors chasing properties, with neither category dominating the market.
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“There seems to be so many people either wanting to invest or get into property. We can’t really keep up with listings. If anyone’s looking at selling it hasn’t been a better time for us in the last years.”
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While activity is across the price range, there’s a lot of interest in the $600,000 to $700,000 market, and do-ups are proving popular with speculators who upgrade and rent them out.
“We’ll have 10 to 20 registrations of people wanting to bid. There’s also a lot of activity as well in second homes or even third homes around that $1 million to $1.5 million mark.
“The other night when we did the auctions we sold one for $300,000 and the highest one was $1.47 million.
“The $300,000 one but that had no CCC so it would have been $500,000 if it had a CCC, so that was an investment for someone, and then the highest one was in Pt England, which is a little bit on the outside of our area.
Ray White Manukau Adam Thomson says activity is spread evenly across the market. Photo / Supplied
“We also sold a do-up in Manurewa for $591,000 and then we sold a bigger piece of land and a house in Papatoetoe for $1.2 million, and we sold a Papakura property with a little bit of land for $653,000.
“It’s really spread out evenly across the market which we don’t always see. In the past when we’ve had market change we’ve had quite a lot of activity in a certain part but at the moment we’re seeing it spread.”
Do-ups for done-up prices
Do-ups attract cashed up investors but can be off-putting for first home buyers who are using every last dollar for their deposit so don’t have spare cash left over to spend on improving a neglected house.
Thomson says when a do-up comes on the market they can sell within the hour, but he recommends to owners they go to auction to get the best price – and there’s so much demand these houses are fetching prices well over their reserves.
20 Blampied Road, in Manukau, was listed at the end of May and was sold under the hammer on June 20. Photo / Supplied
34 Regent Street, in Papatoetoe, which came with 1464sqm of land, sold for $1.2 million. Photo / Supplied
One was sold at auction during this interview with non-stop bidding for nearly $100,000 over the reserve and while Thomson didn’t want to give the price, “it was a do-up that sold for a done up price because of the competition”.
Monica Subritzky, principal of LJ Hooker Now in Manukau, says agents in her office are flat out, too.
While some investors are pulling out of rentals and cashing up, others are jumping straight in, she says.
“For every one that goes out there’s two more who want to come into the market with borrowing power being so easy.”
She says people who are ready to buy but going through the building inspection and LIM report process are missing out.
Limited investment opportunities
OneRoof-Valocity figures show Manakau's median property value has grown 3.7 percent in the last 12 months to $850,000, with much of that growth taking place between July 2019 and March this year.
Bindi Norwell, chief executive at the Real Estate Institute of New Zealand, says South Auckland, like many parts the country, has experienced a flurry of activity post-lockdown but the key question is whether this is a short-term blip or a longer, more-sustained recovery.
“Right now, we may be seeing what appears to be quick sales, however, a number of these properties have been listed pre-Covid and before the lockdown, which means the statistics are showing long lead in times.
REINZ CEO Bindi Norwell: "Right now, we may be seeing what appears to be quick sales" Photo / Supplied
“We expect this may correct itself over the coming months as purchasers who were on hold during lockdown are now able to buy and sell without any restrictions.
“Data for May, 2020, has shown the median number of days to sell for the Franklin District was down 22 days year-on-year, from 70 to 48, which is on the lower end of the scale nationwide.
“However, the median number of days to sell for Papakura and Manukau were both up 18 days year-on-year to 43 and 45 days to sell respectively.”
REINZ is hearing anecdotal evidence of an uptick in the investor market driven by limited investment opportunities.
“We are also seeing an increase in enquiries from ex-pats returning to the country looking for a property to live in," Norwell says.
“Additionally, it is good to see that some first-home buyers are taking advantage of the low interest rates and the temporary removal of LVR restrictions, however, we understand that it is still not a straight-forward process and there are still a lot of hoops to jump through.”
