Prices in Auckland are tipped to rise, and recent sales in the city seem to suggest that those predictions are on the money, with two homes being snapped up for more than $1 million over their CVs.
Auctions have started in earnest in Auckland with auctioneers reporting this month has been the most active February they've seen in the last three years.
And while sales below CV were a feature of the Auckland market for much of last year, prices are now heading north.
Aaron Davis, head auctioneer at Harcourts, says the auctions are in full swing nationwide and properties are selling above marked price. Last week he sold a townhouse in Auckland's Epsom, which had a reserve of $1.78 million and sold under the hammer for $1.96 million.
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“Who are we to try and price properties at the moment? There’s confidence back in the market and it’s right across the board - in Wellington and Christchurch and Auckland,” he says.
Ray White Papatoetoe principal and auctioneer Ted Ingram agrees the mood has changed: “We’ve had three years of tough marketplace here. This February by far is the strongest with more listings and stronger bidding,” he says.
30 Omahu Road, in Remuera, boasts a huge section and will likely be developed by its new owner. Photo / Supplied
At his first auction of the year, he sold a home for $60,000 over the reserve price. A week later he sold another home for $40,000 over the reserve.
There’s more than one buyer for almost every property with investors and first home buyers are very active in the auction room, he says. Both buyer groups have been creating competition in the auction rooms and placing strong bids.
“Interestingly, with one of the home I sold, investors and developers and those trying to buy a do-up drove the price up until we sold to the first home buyer. They are not forcing anyone out of the market they are just determining a fair market value.”
Buyers are making big moves and taking advantage of interest rates being the lowest they’ve been in years. The money is “dirt cheap” now, Ingram adds.
“People are thinking the interest rates are going up soon and start buying. I guarantee you, if the reserve bank put it up quarter of a cent, we would have had a dozen more buyers in the auction room today,” he says.
Barfoot and Thompson agents Dylan Tracey and Helen Lam recently sold two properties for eye-watering sums. 10 Tawera Road, in Greenlane, Auckland, sold under the hammer at the end of last year for $6.11 million, well above the $4.6 million CV, while 30 Omahu Road, in Remuera, which has a CV of $3.8 million, sold last Thursday at auction for $4.8m.
Both Grammar Zone properties sat on big pieces of land - 1765sqm and 1363sqm respectively - and will most likely be developed, as they are zoned mixed housing suburban and apartment building zones.
The owner of 12 Tawera Road, Greenlane, Auckland put his home on the market after seeing the sale price his neighbour achieved. Photo / Supplied
Tracey and Lam also sold a property on 512 Sandringham Rd for $2m, $300,000 above its rateable value.
Tracey says he had about 51 groups come through the open homes for 10 Tawera Road and had five registered bidders at the auction with 106 bids placed in 27 minutes. The owner, who had lived in the house for 33 years, was so emotional he cried during the sale.
“The owner was really excited - he was over the moon," he says.
Tracey says the owner of the house next door was so amazed by the sale, he decided to put his property on the market after 40 years. That property, at 12 Tawera Road, sits on 857sqm and is to be auctioned on March 5.
“There’s a real lack of stock and a lot of buyers are showing up to auctions and bidding. It’s become quite competitive and the market is in a good place,” Tracey says.
However, Sumich Estate Agents and Auctioneers owner Mark Sumich expects to see some “great hustles”.
“I anticipate there’ll be a lot of action. I have 40 auctions from now until the end of February and we’d be able to tell after that,” he says.
