Mystery surrounds the fate of a cliff top home in one of Auckland’s wealthiest suburbs.
The semi-completed home at 84A Vauxhall Road, in Cheltenham, on the North Shore, passed in at a mortgagee auction held at the start of December, with the final bid of $2.1 million well below the 2021 CV of $5.25m.
The listing for the property was withdrawn 10 days later without explanation.
Barfoot & Thompson agent Philip Davis, who was marketing the property on behalf of the bank, declined to comment on the withdrawal. He previously told OneRoof that it was a “sensitive situation”.
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The home was first brought to market in May last year with a different agency, but then was withdrawn in November and relisted as a mortgagee sale.
At the auction held on December 14, bidding for the shell of a house started at a “brutal” $1m, and only collected a further nine bids before passing in.
The listing for the property, which boasts impressive water views, stated that buyers could either “finish the current project” or create their “own waterfront paradise”.
It was being sold “as is, where is” and was “under renovation with plans to be extensively upgraded with spacious open-plan living, outdoor decks and large basement area”.
The listing photos show evidence of the half-finished construction work. Photo / Supplied
The property has a CV of $5.25m and boasts stunning water views. Photo / Supplied
The listing also stated that, according to the mortgagor, “major foundations and cliff stabilisation have been completed”.
The property was owned by a local developer.
According to a 2016 report, his plans for the home involved turning the original one-storey, hipped-roof bungalow into a three-level five-bedroom, three-bathroom house, with a media game room, cellar bar, library and scullery.
The home sits next to several high value homes, with the previous listing agent telling OneRoof that while it had been hard to put a value on the home because it was in an incomplete state, a neighbouring property had a CV of $13.2m.
In a mortgagee sale, the bank is only obligated to take reasonable steps to obtain the best price. Its main aim is to recoup outstanding monies secured by the mortgage registered over the property. Unlike some countries, homeowners in New Zealand can’t simply send the keys back to the bank and walk away from their debts. They are liable to the bank for the loans secured by the mortgage and any costs associated with the property, such as rates and insurance, until the property is sold.
A mortgagee auction that doesn’t end in a sale is unusual and can lead to a tricky situation, says legal executive Jennifer Edwards of Smith and Partners. “In this situation the mortgagee [bank] and the mortgagor [homeowner] have to work together to mitigate the loss for both of them.”
If the bank sells the property for less than the outstanding loans secured by the mortgage, the homeowner is usually (but not always) required to make up the shortfall, says Edwards. “The bank may ultimately bankrupt the mortgagor.”
If the home is owned by a trust it’s likely that the trustees may have been required to give personal guarantees, which the bank can pursue, says Edwards.
