An inner-city studio apartment with a $5000 reserve sold under the hammer today for $36,500 after fierce bidding in the City Sales auction rooms.
Four bidders, three on the phone and one in person, fought out a fast battle for the studio apartment in the Grand Central apartments in Auckland’s former railway station.
It took 44 bids, some in painfully slow increments of $100 and $500, before auctioneer Ted Ingram finally brought down the hammer.
The buyer, a Russian New Zealander who wanted to remain anonymous, said he was buying on behalf of his wife who planned to build an investment portfolio. The leasehold property has an annual leasehold of $11,150, that includes body corporate and ground rent, and council rates of $1200 a year but earns a weekly rental of $350.
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City Sales agent Iona Rodrigues, who marketed the property, said the price exceeded her vendor’s hopes.
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“It was very hard going into the auction because everyone was keeping their cards close to their chests. I was very nervous,” she told OneRoof.
“My vendor is going to be ecstatic. He didn’t want to let go, but he’s retiring and moving to the South Island so quitting his investments.”
Rodrigues said her vendor had owned the apartment in the heritage building for more than 20 years, buying it for its heritage and character of the grand old railway station to add to his “collection of character things”.
City Sales sales manager Scott Dunn earlier told OneRoof it had been five years since he had seen such a low reserve on these apartments.
The studio apartment in Grand Central brings in $350 rental a week with lease and outgoings of just under $12,400 a year. Photo / Supplied
The original William Gummer-designed grand foyer of the 1930s former railway building has been retained. Photo / Supplied
“We sold an identical apartment, with a carpark, for $30,000 two weeks ago. An auction shows everyone the vendor has serious motivation.”
Dunn said the properties that were getting the most competition were, for once, the “problem” properties that no-one would touch in a normal market.
“The leaseholds, the cheapies, the remedials. Buildings that you wouldn’t get a mortgage for, but now the cash-only buyers are in there, picking them up.”
“[Auctions] show that anyone who is selling in this market is really keen to sell,” he said, adding that two other lots that passed in at auction sold later that day while others have back-up buyers.
South Auckland investors bid hard on a semi-renovated house on Sterling Avenue in Manurewa that eventually sold for $725,000 - $195,000 below CV. Photo / Supplied
The Grand Central apartments still share the grand marble and gilt columned foyer of the 1930 building designed by William Gummer, but facilities include an industrial-grade shared kitchen, laundromat and outdoor barbecue and games area from when it was partly converted into student accommodation in 1999 for Auckland University. After it was closed for remediation about eight years later it was turned into the Grand Central Apartments.
Rodrigues said the sums add up to a very tidy net rental return, noting it was run by a rental management company and not a student accommodation provider.
“It’s done well for him, and will do well for an investor as it has potential to go to $380 a week rental, other studios are getting that.”
In other auctions, South Auckland investors picked up a semi-renovated four-bedroom home on Sterling Avenue, Manurewa, for $725,000 – $195,000 below CV. The 702sqm section, zoned for suburban density, was marketed to developers and land-bankers keen for a project.
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