Keen bidding for a tired 1990s Universal Home in Clendon Park, a low socio-economic part of Auckland’s south, could reflect a renewed interest from professional investors and renovators in the housing market, says Ray White Manukau agent Denise Wong.
Wong marketed the four-bedroom property on Ebenezer Way, which saw hard-fought competition at the auction on Wednesday.
There were 10 bidders who battled it out and the house was sold to an investor/renovator for $653,000.
The vendors had owned the house for 28 years and had rented it out to the same tenants for about 23 years, she says, and while not a do-up the home was a bit tired.
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“The bathroom had been done at some point but the kitchen was in the original state, the carpet was in the original state, so it was a good starter home or investment for someone who’d like to add a little bit of value later.”
A first-home buyer who had obtained a building inspection on the property was disappointed at missing out but could not compete against all the others, she says.
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The property sold under its $730,000 CV, but Wong says most properties in Clendon Park sell under CV and $653,000 was a good price.
She says investor/renovators are hopeful that if National wins the election there will be favourable changes made for them, but she advises mum and dad investors who are struggling to look at selling up now regardless of the election saying interest rates could rise beyond 8% if the OCR goes up again at the end of the year.
Anyone who bought even a $500,000 rental, which may have seemed cheap at the time, are still having to reach into their own pockets to top up the mortgage, she says.
For that level of property the owners might only get $500 a week in rent, which is $25,000 a year, but they may have to contribute another $28,000 themselves.
“You’re taxed on $25,000 so you’re now paying provisional tax but at our interest rates you could be topping that up by $120 a week.”
Insurance has also gone up which could add $3500 a year, and rates could be $3000 a year.
“Where’s it all coming from? Plus you’re topping it up and then you’ve got your own mortgage and this is supposed to be your retirement.
“We don’t have a crystal ball but if anyone’s looking at going they should go now while the competition is good. If you go now you get a more buoyant price off the back of winter.”
Wong says the buyer of Ebenezer Way is planning to take possession and do the property up then will probably re-tenant it but she says the sad thing is tenants having to compete with so many others for a shortage of private rentals.
A three-bedroom home on Lomas Place, in Manurewa, sold under the hammer for over its CV. Photo / Supplied
“Kāinga Ora isn’t going to be able to house everyone. I think the government has to get a good strategy back in place and get the investors and mum and dad back in the market so that they can provide for the niche that is missing there and that’s private rentals.”
Another battle at the Ray White auctions on Wednesday was a three-bedroom home on Lomas Place in Manurewa.
Agent Charlie Brothers says eight people bid on the property, which was on the market for the first time in nearly 50 years.
The new owners paid $941,000, which is over the CV of $920,000. Brothers says they had sold a house on the North Shore and were going to live in the property, which is nearer to their daughter.
“They weren't necessarily looking in Manurewa, they were actually looking more in the Papatoetoe area and Otara area and they were ideally looking for four bedrooms but in the end they fell in love with this house.”
Brothers says it is rare to sell a property over CV at the moment but this house attracted a lot of interest.
“It’s 670 square metres of land, it’s three bedrooms, it’s weatherboard, it’s been with the previous family for almost 50 years and the property has been well maintained and well looked after.”
While the buyers were not first-home buyers, Brothers says with a possible change of government first-home buyers should get busy.
“I think they should have made their move a couple of months ago – the best time to make your move is yesterday.”
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