Do-ups are drawing crowds at auctions in both Auckland and Hamilton with multiple bidders fighting it out for cheap properties selling as low as $400,000 that they can renovate and flip.
A two-bedroom, one-bathroom 1980s property on a cross-lease section on Brooklyn Road in Claudelands, Hamilton attracted five registered bidders and four were either investors or flippers at Lugtons’ auction room last Wednesday.
The auction for the do-up opened at $280,000, the house was announced on the market at $380,000 and it finally sold for $400,000 – 37.5% less than its RV.
Lugtons managing director Simon Lugton said the Brooklyn Road house was in a decent area and had the potential for someone to add value.
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“It was a property that definitely appealed to investors. I wouldn’t say we are seeing investors thick on the ground at open homes just yet – they are definitely outweighed by first-home buyers and owner-occupiers, but the odd property like this one tends to bring them out of the woodwork.”
The Brooklyn Road auction attracted the most interest out of the four properties called.
“Some of the buyers in our rooms today [Wednesday] have been in our rooms all of last year and obviously four missed out so they are still in the market. And they will come back when another property fits the same bill.
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“These traders are constantly looking because they might buy a property, they might take three to six months to add their touch to it and sell it and they’ve got to keep buying and selling – that's the business they are in.”
Developers snapped up the two most popular properties auctioned at Ray White Manukau last Tuesday, but there was also strong interest from people wanting to renovate and flip them.
A three-bedroom, one-bathroom home on Earlsworth Road, in Mangere East, owned by the same family for 33 years attracted 11 registered bidders and sold for $1.311 million after 36 bids.
The property had an original kitchen and retro wallpaper, but Ray White Manukau co-owner Tom Rawson said the value was in the 1078sqm road-facing section.
This three-bedroom home on a 1078sqm section on Earlsworth Road, in Mangere East, Auckland, was snapped up at auction for $1.311m. Photo / Supplied
The land size and buyers knowing the seller was seriously motivated to sell would have helped attract interest, he said.
“There are so many properties on the market, buyers are looking for people ready to sell rather than just testing the market or being unrealistic. When people see it’s going to auction and the agent has expressed the owner’s motivation then that gives them real hope they can buy it.”
Developers also swooped on a three-bedroom home on a 675sqm section on Plumley Crescent, in Mangere, with five registered bidders making 26 bids.
The property, described in its listing as “oozing potential for renovation”, sold under the hammer for $740,000 – almost 30% below its $1.05m RV.
A brick and tile home on 1685sqm on Shirley Avenue, in Papakura, Auckland, was pitched as a development opportunity. Photo / Supplied
While developers won these two auctions, Rawson said traders who bought the properties to do up and flip were now able to get hold of properties on larger sections whereas they had previously been outbid every time.
These property traders picked up properties that homeowners simply couldn’t afford to spend money on before selling them, renovated and on-sold them to the large buyer pool who wanted a home they could just move into, he said.
Other older homes marketed as having either development or do-up potential were also in hot demand at this week’s auction rooms.
A 1960s four-bedroom brick home on Shirley Avenue, in Papakura, marketed at families wanting a large section, land-bankers and developers, sold last Wednesday for $1.021m. The Barfoot & Thompson auction opened at $850,000 and was announced on the market at $972,000 before continuing to creep up in small increments of $1000-$2000.
At other Barfoot & Thompson auctions, a four-bedroom, one-bathroom do-up on Jack Browne Place in Otahuhu opened at $500,000 before selling under the hammer for $750,000 and a “private, peaceful do-up bungalow" on a 348sqm section on Riversdale Road in Avondale sold for $750,000.
A 1960s brick and tile house on McRae Road in Mt Wellington, described as “perfectly liveable yet ripe for you to stamp your own individual mark on it”, sold for $1.087m and a freestanding entry-level home on Alfred Street in Onehunga was snapped up for $862,000. Both properties were sold at Ray White auctions.
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