UPDATED; A “destroyed” central Auckland apartment with a price indication “above zero dollars” is attracting a lot of interest as one auction house claims apartments are selling better under the hammer than houses.
The “dirty, dusty and derelict” one-bedroom, one-bathroom apartment at 5B/113 Vincent St, sold at auction this afternoon for $43,200 after being marketed as not for the DIY shy.
Ray White City Realty Group auction manager Cameron Brain said, prior to the auction, that there were 10 potential buyers already lined up to bid on the “destroyed” apartment, which was a good indication of the level of interest in apartments at the moment.
While they might be wanting a bargain, the apartment needed money spent on it and the building also needed remedial work, he said.
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“There are holes in the walls and it needs some blood, sweat and tears - it has certainly seen better years,” the Ray White City Realty listing added.
“The good news is it's going to be cheap, and if you are brave its rewards you will reap.”
Listing photos show the apartment has been stripped of its carpet, has multiple holes in the walls, paint is flaking off the skirting boards and the bathroom basin is dotted with cigarette burn marks.
In the last month, 87% or 13 of the 15 apartments called at Ray White City Realty’s auctions had sold compared to an average clearance rate of residential properties which was at about 65%.
The Vincent Street apartment needs some serious DIY work. Photo / Supplied
The bathroom is not for the faint-hearted. Photo / Supplied
Brain said there had been renewed interest from investors who had returned to the market, as well as first home buyers who were often drawn to freehold apartments in the $500,000 plus price bracket.
While some apartments were selling at auction within several weeks of being listed, other apartments had been on the market for several months before converted to the auction process.
“The auctions at the moment – I mean I’m biased – they are sort of bringing attention to that property, where people have to make a decision on that before they look at anything else.”
Brain said one of the reasons for the increased interest from investors could be due to banks changing their lending criteria on apartments.
Apartments are also a more affordable option for first home buyers.
Investors are snapping up the more standard, smaller and cheaper apartments, while owner occupiers are buying the apartments in the $500,000 plus price bracket, he said.
This penthouse apartment at 100 Greys Avenue, in Auckland CBD, sold under the hammer for $527,000. Photo / Supplied
The apartments sold at Ray White City Reality’s auctions last month ranged anywhere between $50,000 for apartments requiring remedial work to about $700,000 for a two-bedroom, one bathroom apartment with carpark.
A penthouse on Greys Ave sold for $527,000, an apartment on Randolph St sold for $445,000, while a leasehold apartment on Ronayne St for $143,000 - $34,000 over its reserve with five people bidding on it.
“We are getting multiple bidders. We are having three or four bidders on a lot of this stuff.”
While leasehold apartments often weren’t as appealing as freehold properties, he said it was positive to see they were still selling.
CitySales sales manager Scott Dunn’s team sold more apartments in May than any other month so far this year and June was on track to be even better.
“It doesn’t mean that people are selling for record profits or anything, but the transactions are starting to speed up again.”
A leasehold apartment on Ronayne Street fetched $143,000 under the hammer. Photo / Supplied
Dunn said auction sales for apartments were “jumping up and down” and he expected it to carry on like that for the rest of the year. The clearance rate at their last auction was only 30%, but 70% two weeks earlier.
Investors were back in the market and looking for “a bit of a bargain”, he said.
“The cheaper end of leasehold stock and cheaper end of freehold stock which can be bought by cash buyers is flying out the door.”
This was probably because cash buyers didn’t have to worry about interest rates, he said.
Barfoot & Thompson auctioneer Murray Smith said there definitely appeared to be an appetite for apartments, from one to four bedrooms, with just the city branch selling at least 24 in May.
Smith had yet to see many apartments coming through his auction room in the past few months, but had heard from agents that there appeared to be an appetite for them especially with some first home buyers looking at apartments between $500,000 and $800,000. This had also been helped by banks relaxing their lending rules, he said.
“It could be an affordability thing. I think there’s a lot of first home buyers that because homes are so expensive for some of them that they are dropping back.”
