Two Auckland property developers are trying to get ahead of slow sales in the crowded new townhouse market by offering novelty deals for buyers.
One has set the auction reserve for a three-bedroom townhouse in Ranui at $1.
The other is offering to cover one year of interest rate payments for the buyer of the four-bedroom townhouse at 43B Mirrabooka Avenue, in Botany Downs.
Harcourts agent Inder Tak, who is bringing 20 Metcalfe Road to auction on September 13, said the sale would be an unusual one.
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The developer has two neighbouring townhouses up for grabs – 4/20 Metcalfe Road and 5/20 Metcalfe Road. The successful bidder at the $1 reserve auction can pick which one they like best.
“We will have one auction with a $1 reserve, but there are two identical properties. Buyers can bid and when they win, they can say ‘I want to buy No.5 or No.4’,” he told OneRoof.
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“I am sure there will be lots of buyers. They can pick one and then the underbidder can buy the second one for a similar price. That is up to the vendor to accept the price,” he said.
Although the properties are identical in size and specs, one has a decked backyard and the other is grassed.
The developer of the Metcalfe Road properties, Manpreet Singh, of Rockwell Construction, said the $1 reserve auction was a way to help shift the last remaining homes in the development.
Since the finished properties went on the market a year ago, he had sold four, for between $845,000 and $895,000, but interest had dried up around February, he said.
However, he had noticed an upwards swing in buyer sentiment and wanted to capitalise on the good news. “We want to test the market, whatever the market tells us, we are happy to take that.”
The developer of a townhouse at 43B Mirrabooka Avenue is offering to pay for the buyer's first year's interest. Photo / Supplied
He added: “We think starting with a $1 reserve will attract more bidders. That a lot of fighting people would come to get a bargain. Hopefully, someone does get a bargain, we are happy to meet the market.”
Singh said his company had other projects in development in Blockhouse Bay and Mount Roskill, one with building consents ready to go, but he wanted to get his final money out of the Metcalfe Road project before starting another.
“We want to clear our stock first before we jump on another,” he said.
In Botany Downs, the vendor of 43B Mirrabooka Avenue is pinning his hopes on a different sales tactic.
Listing agent Vikas Vij, from Barfoot & Thompson, told OneRoof his client had initially hoped to get $1.3m each for the four townhouses he had at the address, but dropped his asking price to $1.099m in line with prices for similar properties in the suburb.
“Then he was thinking, ‘How can I make this more affordable?’ and affordability comes down to interest rates,” Vij said. To help buyers into the townhouse, his client was willing to pay the first year’s interest on the mortgage. If buyers put down the usual 20% deposit and borrow the rest, that amounts to around $59,000.
“It’s a non-negotiable price, it can’t go down any further. This is only for bank-approved loans; the vendor pays the interest amount into the buyer’s lawyer’s trust account.”
- 20 Metcalfe Road, in Ranui, Auckland, goes to auction September 13; 43b Mirrabooka Avenue, in Botany Downs, has an asking price of $1.099m
