At Auckland auctions now, agents say families are not even registering to bid on homes that sit on land zoned for development.
They've even learned what to avoid: corner sites that give more options for building and entrances are particularly likely to attract bigger money from developer buyers.
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Ray White agent Dickson Lee, who marketed two adjoining south east Auckland properties that went to auction this week, said all three active bidders were developers.
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The duplex properties in Pakuranga, one at 7 Palm Avenue and the other around the corner at 39 Dale Crescent, sold for $2.401 million under the hammer, $1.176 million above their combined rating valuations.
The units, currently under two separate titles, sit on a combined 657sq m site zoned for terrace housing and apartments. The properties' proximity to the local shopping centre, bus stops, schools and the motorway made them particularly attractive to investors.
“When we took it to the market, we knew it had potential but we did not except such a good result,” Lee said.
The marketing focussed on the potential to landbank the property and take the rental income - it had a rental appraisal of $100 to $1100 a week - while design and consenting the new project.
After only seven days on the market, a pre-auction offer of $1.92 million brought the auction forward to Tuesday this week.
The 80 sqm 7 Palm Avenue home last sold in 2000 for $170,000 while neighbouring Dale Crescent home last changed hands for $608,000 in 2014.
Lee said if the cross-lease units were sold separately they would have fetched about $800,000 each.
A development site 8 Sloane Street, in Glen Innes, Auckland, sold for $2.1 million. Photo / Supplied
“When you combine the two together it becomes freehold and there’s more you can do with it as a developer, particularly being a corner site too,” he said.
Another corner development site, at 8 Sloane Street, in Glen Innes, Auckland, sold under the hammer for almost $1 million more than its rating valuation on Wednesday.
Barfoot & Thompson agent Grant Marshall, who marketed the property with Moira Marshall, said that although the marketing was aimed at both families and developers, no families were in the auction room and the seven bidders were all developers.
“Surprisingly, families didn’t put their hands up. Because in that price bracket they have a perception that if a property has development potential, they might not be able to compete, especially with places that are in [a development] zone,” Grant said.
The three-bedroom home at 8 Sloane Street site sold to a developer. Photo / Supplied
Bidding on the 1950s three-bedroom home started at $1.3 million and sold to a developer for $2.1 million.
Located on the 825sqm corner site zoned for development, the Glen Innes property had 2017 CV of $1.14 million.
Grant said: “More often than not, sites in Glen Innes and Glendowie that have older 1950s three-bedroom homes will be development sales."
Another Auckland property with development potential that sold at an auction this week was a three-bedroom home in Papakura.
The bidding on 86 Arimu Road started at $800,000 and it sold for for $963,500 - $403,500 above CV.
The Barfoot and Thompson agents who were marketing the property, Salini Morunga and Anil Sharma, said the 699sqm site could fit about five townhouses.
