While multi-million dollar sales at the top end of the property market are catching headlines, prices in the starter home bracket in Auckland have also been creeping upwards.
At auctions this month, demand for units and small cross lease flats – better known as granny flats – has been strong.
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“We’re definitely getting bigger prices than you would expect. There’s been a bit of a flurry of units,” Barfoot & Thompson agent David Holton told OneRoof.
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Earlier this month, one of his listings, a 72sqm two-bedroom brick unit in a block of six in Birkenhead fetched an unexpected $815,000 at auction - $215,000 above its 2017 CV and well above its market feedback price of around $700,000.
The property at 4/238 Onewa Road had attracted a pre-auction offer of $701,000, but bidding immediately blew past that. Two lockdowns had not deterred the more than 30 groups interested in the flat, and there were four active bidders at the auction.
Holton said: “There were two first home buyers, two investors and the eventual winner was an investor. I don’t specialise in units, but there have definitely been a lot of first home buyers switching to these.
A 72 sqm two-bedroom brick unit at 4/238 Onewa Road, in Birkenhead, Auckland, sold at auction for $815,000. Photo / Supplied
“In an ideal world, they’d be looking at houses, but a unit is a very good way to get on the property ladder. Most first home buyers are put off apartments by the thought of a $4000 a year body corporate.”
Holton said that while owner-occupiers were wary of main road locations, investors know these units, which are often close to shopping streets, public transport and motorways, are popular with renters. In late February, another unit he was marketing fetched $860,000 at auction - “good money” for the 70sqm two-bedroom unit with “fabulous views”.
He said that investors particularly liked units with only two or three in the block in areas zoned for high density, with potential to pick up the rest of the units as they come to market to create a valuable land bank for future development.
A unit at 2/60 Church Street, in Birkenhead, Auckland, sold for $860,000. Photo / Supplied
“There isn’t enough supply of units, or these prices wouldn’t get so high. People are really comfortable with these. There are hundreds all over Auckland – brick, often with tile roof, nice features like rimu floors. They don’t come on very often, but when they do, they are very popular.”
The speed of the price rise is notable for both attached units and other small cross lease properties.
A 70sqm three-bedroom home on a cross lease site marketed by Barfoot & Thompson agent Yan Lin at 2/49 Target Road, in Totara Vale, blew past its pre-auction offer and sold for $1.031 million.
That was $150,000 above its CV and $163,000 above the price paid in August for the other property on the cross lease.
“We had a pre-auction offer of $980,00 after only five days on the market. The buyer was a first home buyer who will rent it out for a while,” Lin said.
She said that the first home buyer market had strengthened, with some buyers now having budgets of $1 million.
A unit at 1/113 Monarch Avenue, in Hillcrest, sold for $983,000 under the hammer. Photo / Supplied
However, Barfoot and Thompson Northcote branch manager Steve Walsh said that it was hard to determine whether or not the recent sale price of $983,000 for a unit at 1/113 Monarch Avenue, in Hillcrest, was indicative of creeping prices in the lower price bracket.
“It’s a busy market. It’s all supply and demand. This was a perfect first home buyer property, and there were 40 people on the lawn watching the auction and three bidders. This was the buyers’ second auction, they’d missed out once before,” he said, adding: “Missing out once is normal now.”
