A three-bedroom South Auckland house damaged during the summer flooding sold at auction last week for $575,000 – more than half-a-million dollars below its CV.
Ray White agent Charlie Brothers, who brought the Ventura Street home to auction, said it had attracted interest from more than 50 buyers.
All were aware of the problems with the property, including a nearby flood-prone stream and an asbestos roof. A pre-auction offer of $550,000 was topped, with three registered bidders pushing the price up another $25,000.
“Mostly this is a Kāinga Ora state housing area. People know that the whole street is of that era [1960s] with asbestos. We are hearing the conversation that some of the banks are not interested, and you’ll hear similar stories in West Auckland where they were flooded too,” Brothers said.
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Ray White Manukau business co-owner Tom Rawson said the same “creative engineering” Kāinga Ora and Auckland Council employed in the formerly flood-prone state housing areas of Mount Roskill and Northcote – which weathered the storms better than old state housing areas – would eventually happen in Mangere.
“[The buyer has] taken a calculated risk, based on evidence elsewhere. But you wouldn’t find a homeowner trying to buy there,” Rawson said.
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Mark Fraser, Kāinga Ora's general manager for urban development and delivery, told OneRoof that the organisation is currently working with Auckland Council's Health Waters to complete the next stormwater management plan for Mangere, and had updated its storm water modelling since the flood. He was not able to confirm a time for a construction start date, but said design options currently being worked on would emerge in 2024.
The overseas-based owner, who had bought the property 40 years ago, just wanted to quit the place, Brothers said in his marketing.
Rawson said other vendors with both residential and commercial properties had been under-insured for the floods, so claims for remediation were not covered. But, he added, there were now good opportunities for home buyers who last month made up half of the buyers at the office’s auctions.
“April was our quietest auction month," he said.
“It’s a hard industry to be in at the moment, with people who are losing money. It’s hard [for agents] who are looking for the bright side, but the renovation margins aren’t there and people are trying to get ahead of interest rates going up.”
The owner of the flood-damaged Ventura Street home in Mangere decided to sell after 40 years. It backs onto a flood-prone stream. Photo / Supplied
Nine bidders, mostly developers, chased a three-bedroom house with apartment zoning on Motatau Road, in Papatoetoe, which sold for $1.365m. Photo / Supplied
Rawson said while vendors were quitting Auckland, or New Zealand, others were downsizing from $1m properties to $800,000 to have a more comfortable level of debt to service.
“For investors of 30 or 40 years, this is just a bump in the road, it doesn’t affect people playing the long game, they’ve made money because they’ve held on to their property. And buyers going in now with a 20-year plan, now is a good time. But there are heaps of investors that are caught out. They could lose up to $300,000 or more on a property they bought more recently,” he said.
Traders who bought to renovate and on-sell were also under pressure. Brothers is currently marketing a tidily renovated three-bedroom house on 78 Burundi Avenue, Clendon Park. It sold a year ago for $852,500 and has since had a spruce-up. But after two other agency campaigns, it had still not sold.
He is marketing the property as a set sale, closing May 10, rather than an auction, in an effort to attract home buyers.
“It’s had a lot of enquiry, we’ve already had over 80 people from our database,” Brothers said. While he couldn't name a likely sale price, he said that his sellers knew they had missed the market.
On the other hand, experienced developers who sat out the big price increases of 2021 are back buying.
A three-bedroom house at 78 Burundi Avenue, Clendon Park, is back on the market after a renovation. Photo / Supplied
A five-bedroom house on a lifestyle section on Ranfurly Road, in Alfriston, sold for $3.323m, well above its $2m CV. Photo / Supplied
A three-bedroom house on a 809sqm site with apartment zoning on Motatau Road, in Papatoetoe, pulled in strong developer interest, with 120 enquiries and nine registered bidders at auction in mid-April, said marketing agent Lawrence Kingston-Slade of Ray White.
With a CV of $1.425m, the property was on the market at $1.25m, but he said two developers “went for it” before the hammer came down at $1.365m. “It’s a very good street, a great location, with all the storm water services,” Kingston-Slade said.
“The buyer is experienced, he builds 100 homes a year and has a six-month settlement to get it sorted, consents and so on. He’ll build straight away, that’s what he does,” he said, adding that, depending on design, a site like that could probably take four or five three- or four-bedroom new homes. There’s strong activity for good development sites, but it does need more marketing spend to get 50 to 80 enquiries.”
And at the top end of the South Auckland lifestyle market, properties are also moving well.
Ray White agent James McGregor, who brought a five-bedroom home on 5346sqm property on Ranfurly Road, Alfriston to auction, had such interest from buyers that the auction date was brought forward. The sprawling brick property, completed in 2007, sold for $3.323m, well above its $2m CV.
“It wasn’t a pre-auction offer, but all the main players were there. We had seven registered bidders, four of them active – bidding started at $2.2m, above its CV. Two people really wanted it, there were something like 30 or 40 bids,” McGregor said.
He said many buyers of the lifestyle property came from The Gardens, but he also had interest from eastern suburbs city people, with some 40 groups viewing the home.
“It’s aspirational. A lot had been looking for a long time with budgets of $2.5m-plus, some with over $3m. There are not a huge number of properties come up for sale.
“Interest is all very property dependent. There are not a lot of properties for the six people who missed out that tick all those boxes.”
Also selling well at Barfoot & Thompson auctions last week were a three-bedroom brick cross-lease home on St George Street, Papatoetoe, which fetched $801,000 – $100,000 above its CV - and a four-bedroom house on Karetai Crescent, Favona, which sold for $930,000 – just $10,000 under CV.
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