Builders, renovators and bargain hunters showed keen interest in a vacant 1940s two-bedroom do-up in Auckland’s Mt Roskill but in the end “brave” first-home buyers were the winners on auction night this week.
The young couple fought hard to buy the deceased estate as bids rose largely in $1000 increments before the final hammer came down at $672,000 after a $625,000 pre-auction offer had brought the auction forward.
OneRoof records show the property on May Road was last sold in 2000 for $157,000 and while the current CV is $1.1 million, the condition of the property meant the market value was nowhere near that.
Barfoot & Thompson agent Robert Thompson says $672,000 is a strong price for a property he had made clear in the marketing needed plenty of elbow grease, telling OneRoof the interior photos looked so bad he did not use them.
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In the marketing he described the bungalow as being in “very poor” condition inside and out with considerable time and expense required to bring it up to a good, liveable standard – another alternative was to demolish and start over.
“The vendor’s willingness to sell at whatever level the market will offer probably indicates that this property may well offer the cheapest land value in the suburb for a 350-400sqm building site,” he wrote.
Three main types of buyers showed interest, he says. In the first week the builders came, looking at land value only with a view to building a new full-sized home on the cross-lease site but to Thompson’s knowledge no builders showed up at the auction.
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Next came the doer-uppers, looking to see if the property was worth renovating and then re-selling, and this buyer group represented the bulk of the interest.
For this group it’s all about mathematics on properties like this, Thompson says.
“What do we pay for the old dunga, what are we going to spend on it, what’s it worth when we finish? I had that conversation 50 times probably, it was just over and over.”
The last group were potential owner-occupiers looking to do the work themselves and live in the property, one of whom made the pre-auction offer but who was outbid on the night.
The young couple who bought saw past the current state of the property and while not builders plan to renovate themselves: “Brave, I’d call them; brave and energetic young people.
“They were very proud and emotional to have bought their first-ever property and they’re going to renovate it themselves as a labour of love young people have the energy for – I’m in my sixties, I wouldn’t be doing it any time soon.”
Thompson says in this market the level of interest and inquiry had been “substantial”. The fact the property was a bargain drove the interest with people recognising a deceased estate needs to be sold.
Over time there will be capital gains with the property in an excellent central Auckland location with a shopping precinct over the road along with multiple schools close by and easy motorway access nearby.
Thompson says the property is currently not liveable and while a great purchase for the buyers they have many, many months of work and expense ahead but they have done well.
“Whatever they spend on that house, even if it's a considerable sum in excess of say $100,000, it’s still a very, very well-priced home.”
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