Multiple buyers battled it out at the mortgagee auction for a four-bedroom home on a 1558sqm section in Sockburn, Christchurch, with the property eventually selling for $836,000 – significantly more than its RV.
It was one of two properties that sold at Harcourts Grenadier’s mortgagee auctions today and comes amid an uptick in mortgagee sales around the country.
The Harcourts Grenadier’s auction for the Middlepark Road home kicked off with a bid of $500,000, and became more competitive as four bidders tried to stake their claim on the property.
The house – which appeared to have development potential – was announced on the market at $780,000, but bidding continued until the hammer fell at $836,000. A total of 37 bids were made, with the winning offer $1000 above the under-bid.
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The sale price was well above the August 2022 RV of $720,000, and more than what the property last sold for in 2010.
The listing photos for the property were confined to an aerial view of the house showing the size of the section, and an exterior shot of the house that also showed two vehicles and various household goods in the driveway. The listing description was equally limited: “This property is being sold by way of mortgagee auction. 1558 square metres section. 4 bedroom house. Amazing of street parking. Close to amenities.”
Meanwhile, bidding on a three-bedroom, one-bathroom home on a 910sqm section on Rowcliffe Crescent, in Avonside, started at $60,000 before jumping to $240,000.
The property was announced on the market in the early $300,000s and sold for $335,000 – well below its $500,000 RV. The four bidders placed a total of 13 bids. The listing photos for Rowcliffe Crescent were also limited to the exterior of the property, and the listing information was just as brief.
Harcourts listing agent Tristan Harcourt was unable to comment on the mortgagee sales due to the sensitivity around them.
A three-bedroom house at Rowcliffe Crescent in Avonside sold in a mortgagee sale auction for $335,000. Photo / Supplied
Harcourts Grenadier auction manager Karen Phillips said mortgagee auctions were coming through slowly and there had only been a handful through their auction rooms this year. These properties were the only two mortgagee sales in April and there were also two in March. “There’s hardly been anything.”
Phillips said the banks appeared to be working really hard with people to help them keep their properties so mortgagee sales only came up when there was nothing else they could do.
Last week a run-down home on Funnell Place in South Auckland took an almost half-a-million-dollar hit in less than 18 months when it sold in a mortgagee auction for $773,000 after about 100 bids were made. Meanwhile a three-bedroom, one-bathroom home on Antrim Crescent in Otara on a larger 736sqm section also sold under the hammer at Ray White Remuera for $750,000 – $180,000 less than its RV.
Property commentators told OneRoof last week they expect to see a slight increase in the number of mortgagee auctions being called.
CoreLogic chief property economist Kelvin Davidson said the slight rise was not surprising given the pressure on developers and mortgage borrowers. “It's not going to be pleasant, but let's face it interest rates are high.”
However, he said mortgagee sales were always a last resort and banks worked with borrowers to avoid forcing a sale by doing things such as repayment pauses or increasing the term of the loan.
Valocity head of valuations James Wilson said mortgagee sales still made up less than 5% of all sales and those that were happening were spread across all types of owners, not just investors or developers.
While some of the properties sold by mortgagee sale were bought at the peak of the market, others had been owned by the same people for more than 10 years.
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