Developer appetite in Auckland has been rocket-fuel for auctions around the city, with agents reporting fierce competition to secure properties with development potential.
At a Barfoot and Thompson auction in East Auckland today a pair of neighbouring properties owned by the same vendor and sitting on a combined 1611sqm sold for $4.05 million for a profit of nearly $3 million.
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And at Ray White’s three South Auckland offices, agents sold 11 out of 11 properties last week, with 70 registered buyers competing.
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“Investors bought the whole lot,” says Adam Thomson, director of Ray White AT Realty, which has offices in Mangere Bridge, Manurewa and Manukau.
“Anything that has do-up or investor potential, there’s a lot more competition for,” he says, adding that buyers are a mix of developers, land-bankers and investors.
One of the lots sold last week was a pair of neighbouring properties at 38 and 38A Fairview Road in Papatoetoe. The property at 38A had been listed by itself but developers told agents Richie Lewis and Jas Sandhu that the narrow driveway was a turn-off.
“They were looking for more doable options,” says Lewis. “So we had a chat with the owner of the front house [38 Fairview Road] and he said, ‘Make me an offer to be happy to sell’. He gave me a figure to go back with to the developers to make an overall proposition. That was a game-changer.”
Neighbours at 53 and 55 Patons Road, Howick, combined to sell their 2173 sq m site for $2.916 million. Photo / supplied
The combined 1700sqm site has zoning potential for up to 20 units and was bought before the planned auction by a developer who was just finishing a townhouse development two doors down the road.
Thompson says developers are prepared to pay more for bigger plots of land where it is more profitable to build a number of smaller units than one or two big houses.
“This way owners get around $2 million, where individually they may have only gotten $800,000 each,” says Thomson, adding that land prices in Papatoetoe are averaging $1500 to $1800 per square metre since lockdown, well up on their $1000 or less of a year ago.
“Quite a lot of these [buyers] are new investors, people who are land banking to take advantage of the unitary plan. They don’t want to leave money in the bank. There’s potential in the land and they just want to hold long term.
"We had 70 registered buyers competing [at last week's auctions] – meaning there are still 60 finance-ready buyers out there actively looking to purchase now."
A pair of properties at 61 and 63 Swainston Road, St Johns, in the terrace housing zone sold for $3.205 million at auction. Photo / Supplied
Thompson says there is huge demand in Papatoetoe for new homes, with two bedrooms fetching $600,000 and larger four- or five-bedroom single homes going for $800,000 to $1 million.
He says that developers have finally got their heads around the unitary plan, with the company is now bringing about 30 percent of development-friendly properties to auction - up from only 10 per cent - to get the best deals for their vendors.
Already this week two out of eight auction properties have offers on them, as developers try to get ahead of the auction competition.
5 and 7 Chevis Place, in Pakuranga, sold for $4.05 million at auction. Photo / Supplied
38 and 38A Fairview Road is the first of the neighbour deals that Lewis has done, but he says it’s a good strategy if vendor circumstances align, and one he plans to repeat.
At Barfoot and Thompson’s East Auckland auction today, agents Sidney Chan and James Gao sold a pair of properties at 5 and 7 Chevis Place, in Pakuranga. Owned by the same vendor as long-term investments, the combined 1611sqm sold for $4.05 million, $2 million above their combined CV. OneRoof records show the properties last sold for a combined $1.08 million, yielding the vendor a profit, on paper at least, of nearly $3 million.
These combined sales follow a similar neighbourly success in nearby Howick, where Barfoot and Thompson agents Brenda Wong and Jacky Ng brought neighbours at 53 and 55 Patons Road into a single 2173sqm lot which sold for $2.916 million, some $800,000 above what each would have earned individually, Ng estimates.
Meadowbank Barfoot and Thompson agent Daniel Duan sold a pair of properties at neighbouring 61 and 63 Swainston Road, in St Johns. The owner of the 1214sqm block of land in the developer-friendly terrace housing zone got $3.205 million at auction, more than $1 million above the properties’ combined 2017 CVs and nearly $2 million above the purchase prices of 2015 and 2017.
