- A fire-damaged home in Papakura is expected to sell at a significant loss at auction.
- The owner paid over $800,000 but is willing to accept $300,000 to $400,000 less.
- Development costs in Papakura have risen, with significant charges for water and sewerage upgrades.
A fire-damaged home in South Auckland is expected to sell at a big loss when it goes to auction next week.
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Ray White agent Rubal Singh told OneRoof that the owner of 19 Liverpool Street, in Papakura, was offloading the property a year after paying more than $800,000 for it.
He said his client had planned to develop the site but commitments to another project meant he could no longer afford the hefty mortgage repayments of about $6000 a month.
“He just wants to sell it, he wants it gone,” Singh said.
The listing agent says the property could be beyond saving. Photo / Supplied
The agent told OneRoof his vendor was prepared to sell for $300,000 to $400,000 less than what he paid for the house in April last year.
Singh said the vendor had bought the property in its burnt state, but he did not know when the damage occurred.
He told OneRoof it was the fourth fire-damaged property he had marketed in the last two years; it was also the worst.
The other fire-damaged homes had been bought by property traders who did them up, but this one was likely to be beyond repair.
“Fire-damaged properties are so unreliable. I can’t say what can be done to it ... I’m not even sure you can do it up.”
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Land-bankers and developers were the most likely buyers because there was potential to build up to seven homes on the 1011sqm site.
Market feedback had put its value between $350,000 and $450,000. “It’s probably going to [sell for] less than half of its CV [of $1.1m].”
The drop in value follows spikes in development costs in Papakura. Singh said that Veolia, which has a contract with Watercare to maintain water and drainage pipes in the area, was charging more to connect new-builds to public services.
One builder had been asked to pay $50,000 on top of the usual development fees, he said. “I’ve been told you just have to pay a little bit of extra money, but you can get it done.”
A two-bedroom house at 4 Pratt Street, in Papakura, needs renovating. Photo / Supplied
The do-up property is being pitched at renovators and first-home buyers. Photo / Supplied
Harcourts New Age agent Alex Dunn said Veolia was experiencing the same challenges as Watercare was in other parts of Auckland and its network was at capacity. Developers in Papakura wanting a consent had to first pay to upgrade the required sewerage and water pipes, which was a massive cost, he said.
One developer had told him Veolia wanted him to pay $250,000 to upgrade the mains before he developed a section, which made the project unviable.
“This came into effect about two to three years ago and literally all the developers just packed up and went up to Papatoetoe, Mangere – all those areas.” However, some of those areas were now facing large restrictions, with Watercare also trying to manage its capacity.
Dunn said the main buyers for the properties in Papakura were owner-occupiers. “A lot of people don’t know about this so we go into appraisals and these people think their house is worth moonbeams and we go in and it’s just worth what a homebuyer will pay for a house.”
For those looking for a home to renovate, Dunn pointed to a two-bedroom, one-bathroom property at 4A Pratt Street, in Papakura, which the owners need to sell.
“Circumstances have changed for this family, and they are now in a situation where they need this property sold pronto,” Dunn’s listing said.
The do-up property is priced by negotiation, but has a price indication of $550,000-plus.
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