A 1940s-era house in Auckland’s Avondale soared past its declared reserve at auction last month as land-bankers made a return to the city’s property market.
The four-bedroom home on Wingate Street sold under the hammer last month for $1.321 million – more than $300,000 above the reserve of $995,000.
Seven buyers, all land-bankers, competed to secure the 607sqm corner property, which is zoned for apartment and townhouse development.
Listing agent Ying Li Howe, of Barfoot & Thompson, said interest had been strong, with a total of 87 bids made at the auction.
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“It’s probably one of the best sections I’ve sold,” she told OneRoof.
“Properties that are zoned for [development], that are well positioned and come with a liveable house are attractive to land-bankers.”
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OneRoof records show the property last changed hands in February 2005, for $338,000 – a gross profit of almost $1m for the vendors.
Howe said there was a definite distinction between land-bankers and developers at the moment.
Developers want to buy and build within six months and make money off the sections within two years. Land-bankers, in contrast, want to buy and hold for the medium to long-term.
At the moment those land-bankers also wanted properties that were move-in ready to either accommodate family members or tenants, she said.
A large family had lived in the Wingate Street house for almost two decades so she had suggested they touch up the paint and put in new carpet so it was move-in ready.
The Wingate Street home had been spruced up with some new paint and carpet to appeal to land bankers who wanted the house to be move-in ready. Photo / Supplied
A basic three-bedroom home at 10 McKean Avenue, in Manurewa, Auckland, is also attracting a lot of interest from land-bankers. Photo / Supplied
“They [land-bankers] don’t want to do up a house because if you buy today and tomorrow you have to spend three months to do it up, there’s absolutely no benefit to those people.”
Harcourts Papakura salesperson Alex Dunn said a lot of land-bankers were showing interest in a three-bedroom, one-bathroom home on a 756sqm section at 10 McKean Avenue, in Manurewa, Auckland.
“These people say ‘we want to keep the tenants in the property. We don’t want to kick them out, we have no intention of building or anything, we just want to have a good rental with a bit of land around it’.”
Dunn said the property was listed last year with a different agency for six months and had not sold. Since listing the property last month, he had been getting calls from land-bankers, first-home buyers and people looking to upgrade from a smaller family home.
“I’ve just had huge amounts of enquiry on it.”
SM Property director Scott Muirson said the reason land-bankers could be looking again was because they had picked up on the fact that developers were also eyeing up infill housing sites again.
In the last six months there had been a complete turnaround, he said, and developers had started buying reasonably priced, good quality sites, which were usually properties with a standard three-bedroom home on about an 800sqm section.
“They will get consent and get pretty much straight into it. I think that’s probably why you are seeing the land-banker speculators come back because they go if developers are buying they are probably going to be a lot more in force in the next 12 to 24 months at which point they can hopefully flick it to a developer at hopefully a better price.”
An agent who had a buyer bidding on a bare section on Deans Avenue, in Riccarton, Canterbury, in a mortgagee auction says the $1.05m sale price is in line with 2021 prices. Photo / Supplied
In Christchurch, land-bankers and developers are also ready to pounce.
Harcourts Gold salesperson Mark O’Loughlin said there was still demand for the ‘as is, where is’ properties coming through the market, which also attracted land-bankers.
As long as these “as is” houses had been bought up to the Healthy Home Standards they could still be used as rental properties.
“They are still good landbank properties to secure.”
Developers were also buying again and this week O’Loughlin received a letter from one of the large developers in the city wanting to buy development land now with the view to building houses on it in 12-18 months.
A bare 880sqm section on Deans Avenue, in Riccarton, surrounded by new townhouses sold in May for $1.05m in a mortgagee auction at Harcourts Grenadier.
O’Loughlin said there were about half a dozen bidders.
“This price was back to 2021 prices – high peak of the market prices. Location, quality, school zones – that was (Christchurch) boys’ and girls’ high zone – there’s still demand for the right land and people will pay a premium to get it. The market hasn’t changed for good land and a good size.”
While three adjoining ex-state houses on Clyde Road, in Bryndwr, were picked up last month by a developer in an off-market sale for $2.35m.
O’Loughlin said in some cases there were advantages to bowling the house and keeping it as bare land until it was rebuilt. “You then don’t have to spend $15,000 or $20,000 on heat pumps or bringing it to the rental code – sometimes it’s cheaper just to knock it over.” It also avoided any maintenance and repair or insurance costs, he added.
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