In scenes not seen for over a year, the auction for an Auckland development site on Wednesday was crowded with buyers before the hammer came down at $3.165 million – $245,000 more than the vendor had paid for the property more than a year ago.
Barfoot & Thompson agent Ben Feng, who marketed the property with Dan Song, told OneRoof there were 25 bidders registered for the auction, of which 10 were actively bidding.
He said the marketing pulled in the bargain hunters.
The tired three-bedroom house on a 809sqm site on William Avenue, Greenlane, was billed as an urgent sale, with a realistic vendor who must sell – all words, Feng told OneRoof, that brought out other developers. The sale included renders and resource, building and engineering consents for five four-bedroom two-storey townhouses.
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“They all thought they’d get a bargain. Everyone was calling to ask what was the vendor’s situation, what was wrong?” he said.
“There was nothing wrong, the vendor was just motivated. He has other property under construction and couldn't make the mortgage repayments at new interest rates, too many properties and loans from the bank.”
Some 25 bidders crowded the Barfoot & Thompson auction room and placed over 100 bids in the fast-paced auction. Photo / Supplied
OneRoof records show that in June 2021 the vendor had paid $2.92m for the Greenlane site, which has a CV of $2.95m. Feng estimated design and consents would have cost around $100,000 to $150,000 for the vendor to obtain. The flat site is close to Cornwall Park, the showgrounds, motorways and the Greenlane shops.
He said the bidders were all experienced developers, most of whom had already finished and sold down other projects so were in a position to buy in cash. He added many had held off buying from last year.
“Prices were so crazy, a few didn’t buy last year because prices were way too high.”
Bidding started at $1.6m, but quickly shot well past the reserve to $2.7m, when it was declared on the market.
“A lot tried to get in at $2.5m, then there were four or five bidders over $2.7m and two bidders kept going over $3m. Everyone tries to get a bargain, but there were more people bidding and we had an experienced auctioneer with Campbell Dunoon,” Feng said, of the fast-paced 20-minute auction.
He said the price per square metre paid by the buyer, $3912, was more than that paid for a pair of properties on nearby Campbell Road, Greenlane, in November 2020 and January 2021, before the market took off.
The 809sqm site on William Avenue, Greenlane, came with resource, building and engineering consents for five townhouses of four bedrooms each. Photo / Supplied
Feng said that many experienced developers were slowing down on their builds, employing smaller crews and not aiming to finish houses for marketing until 2024, as they are not confident about new home sales through next year.
“Off-the-plan is impossible, they’ll want to sell finished houses. At the moment first-home buyers are very active in places like Massey, but they’re completed and selling for $800,000 to $900,000. Hopefully by 2024, prices go up,” he said.
Barfoot & Thompson auctioneer Campbell Dunoon said the bidding frenzy of the William Avenue sale followed similar auctions for development sites earlier in the month in Sandringham and West Harbour where four or five bidders fought and paid well over the ‘on the market’ prices.
“The market is uncertain, but we’re getting outstanding results – we're all struggling to find a pattern. Each week is different, each week is unpredictable," he said.
“Since March we get periods of uncertainty, periods of decline and then we get auctions like this with massive results.
“ Auction success rates are affected by 'no-bid' auctions but, where we have bidding, for the last three weeks ending November 13, what we can see is amazing success rates for auctions where we’ve had bids. Every auction with an opening bid had a success rate of over 90%. Once people have made the decision to buy, they will now bid with confidence.
"Some people have made the decision to get into the market now, perhaps because they have a perception of more competition next year."
