A one-bedroom flat in Avondale sold at auction on Friday for $398,000 – making it one of the cheapest buys in Auckland city.
The fish hook was that the unit, one of a cross-lease block at 76 Riversdale Road, was being sold as is with no access to inside the flat as the condition of its mortgagee sale.
Harcourts agent Mark Fitzgerald, who was selling the property on behalf of the bank, dubbed the sale as “the Money or the Bag” after the popular 1970s-1990s Kiwi television show It’s in the Bag, where contestants opened the mystery bag to find a dud prize - or a fortune.
Fitzgerald says that while Facebook trolls gave him a hard time for his advertising, the mortgagee was realistic about what no access would do to the property’s price. The flat attracted over 60 enquiries, he said, and eight brave buyers turned up to look at the exterior.
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“It’s what I called minimalist marketing – a few photos of the exterior, the floor plan off the original 1968 consented plans and a rental appraisal, that's it. Here we have a cracker of an example of that old adage ‘less is more’.
“In my experience, mortgagee sales don’t happen very often and this is the first I’ve done where the mortgagor, who is living in the property, doesn’t grant access,” he says.
Buyers were bidding on the location, near Riversdale Reserve, and what they could see from the yard. Photo / Supplied
While interest was initially high from first-home buyers, drawn by the possibility of a bargain, Fitzgerald says they were turned away as banks would not lend on a property that could not be accessed for valuation. Instead, three investors who were cash buyers fronted up to the auction.
Bidding started at $100,000 and quickly shot up to $384,000. After consultation with representatives of the mortgagee, the property was on the market at $385,000 and two bidders duked it out in bids of $1000 to $398,000.
“The buyer has then got to take on insurance the minute it settles, as the bank offers no warranties, no chattels, no guarantee of the condition, everything is up to the buyer from then on.
Investors with cash were the serious buyers, as banks would not lend to first home buyers without access for valuation. Photo / Supplied
“Banks drop the place like a hot potato.”
However, Fitzgerald says that savvy investors would have bought flats of a similar age and condition fully expecting to gut and renovate it anyway – replacing kitchen, bathroom and flooring, painting and adding insulation and heating to bring the flat to new healthy homes standards.
“You just don’t know if the demolition might have already been started,” he says.
“You’d put $60,000 into it and done up you’d resell it for $600,000 to $650,000. A similar apartment in New Lynn, which isn’t as well located as this, sold for $549,000 recently.”
OneRoof records show a three-bedroom unit in the same block sold for $610,000 in January. This flat, which last changed hands in 2010 for $159,000 is near Riversdale Reserve, not far from Avondale College.
A one bedroom flat in a 1970s block at St George's Road, Avondale, shows what an 'after' could look like. Photo / Supplied
On the other side of Avondale Racecourse, closer to the shops and train station, a renovated upper floor one-bedroom apartment in a 1970s block at St Georges Road shows how smart an ‘after’ could be. It goes to auction June 3.
Fitzgerald says that Avondale prices are now edging well past New Lynn with buyers attracted to the older suburb and its access to trains and amenities.
