An out-of-town investor has suffered a $770,000 loss on the historic villa he bought last year in Auckland’s Freemans Bay for $3.85 million.
Ray White listing agent Jerry Chen told OneRoof his client’s house on Hepburn Street sold this week for $3.08m – $15,000 below its most recent asking price and more than $1m under CV.
The investor had initially planned to transform the heritage mansion but the numbers didn’t work and he pulled the plug on the project.
Chen said before the sale: “They took a punt on it and it just hasn’t worked out. It’s not what they are used to doing. So they’ve learned their lesson. There’s money to be made in other deals for them.”
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The investor bought the heritage home – which is divided into five self-contained rental units – in April 2023. The intention was to turn it back into a single dwelling, but within months of the purchase it was back on the market, with the price tag dropping several times.
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Chen said the new owners were “mum and dad” investors who split their time between Auckland, a house in Northland and summers in Europe. “They are at that retirement stage and they just wanted a property where they can rent out and get some returns. They’re probably going to keep the top apartment for themselves.
“They’ve worked really hard their whole life.”
Chen said the property had been on and off the market since August last year, but after he relaunched it in July, interest spiked.
He drew 15 offers, ranging from $2.3m to $3.2m, but the successful offer included a swift seven-day settlement.
The Hepburn Street property was transformed into five apartments in the early 2000s. Photo / Supplied
The property boast clear views of Auckland CBD. Photo / Supplied
“A lot of them were local families who had just cashed up their rental or were looking to put their cash somewhere. A lot of the offers in the $2m range were cash; the ones at slightly above that price had a house to sell.
“They were all looking at a good return. It’s about 5.1% gross yield return on your rental, much higher than what you’d normally expect in the area,” he said.
Chen said he wasn’t put off by low offers. In fact, they helped get the ball rolling. “Yes, some of the offers were ridiculously low, but you should still get them on paper. I think sellers in a changing market need to look at all their available options,” he said.
“Some are going to be well below, but you still need to entertain what the bottom range is. So when you do get that offer of $3.08m with a seven-day settlement, you know that’s the right offer.”
Chen said that he warned his vendors not to freak out when they see a low offer.
“If you don’t have any offers, you can’t negotiate with anyone,” he said.
“If your property is not getting any offers in the first three weeks – not even a rude one – you’ve really got to be asking your agent some questions. Why has no one made a rude offer?”
Chen said over the past two years he had done a number of deals on re-listed properties, including villas in Grey Lynn and Freemans Bay. “I always work to present an offer. Even if it is ridiculously low, you should still get them on paper.”
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