Twenty-eight years ago when brothers Phil and Pauly Fuemana formed the Otara Millionaires Club, it was a sly reference to the fact that the South Auckland suburb was one of the city’s poorest. Not any more.
At the start of October, the suburb cracked its first $1 million house sale, followed by two more in November.
READ MORE: Find out if your suburb is rising or falling
Back when OMC formed, Otara's median sales price was just $96,000. By the time they hit world charts in 1995, that had risen to $125,000.
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In the words of OMC’s world-wide hit: how bizarre.
LJ Hooker agent Madu Kari, who brokered the $1.1 million deal for 7 Luke Place with Dushen Mallimaratchi, had not even realised his October 1 sale was a record.
He told OneRoof the 1477sqm property on the edge of Ngati Otara park had 21 groups through it, mostly developers attracted by the high-density zoning of the flat site which can have town houses or apartments.
Kari said that the eventual buyers of the pair of do-up houses, a four bedroom and a three-bedroom, were investors who plan to hold the property for a while. The owners, who had lived in the property for 12 years, paid $340,000 generating a profit, on paper at least, of $760,000.
A sprawling 1477 sq m property at 7 Luke Place on the edge of the park was the first sale to top $1.1 million. Photo / Supplied
The immaculately renovated pair of units at 1/208 and 2/208 Preston Road were bought by an investor. Photo / Supplied
The top price was for a development site at 1/208 and 2/208 Preston Road, which sold at the end of November for $1.256 million. Ray White agent Garry Singh, who sold the property with Jarvis Adams, said the price was a record because of its relatively small 796sqm site. The pair of two-bedroom units had a joint CV of $870,000.
"It’s definitely gone crazy. Every where's a million-dollar suburb now, particularly anything over 800sqm.”
1 Tate Place Otara sold for $1,010,000, $410,000 above CV. Photo / Supplied
The third million-dollar sale in Otara was for 1 Tate Place, which went for $1.01 million. Marketed by Barfoot and Thompson agents Kelly Zhang and Tim Zhou, the 784sqm property has mixed housing urban zoning. It sold $410,000 above CV and records show it had last changed hands eight years ago for just $263,000 a gain, on paper, of $747,000.
According to the OneRoof-Valocity house price index, house values in Otara have risen 7.4 percent since the Covid crisis started. And in the last 12 months the median value has jumped $140,000 to $715,000.
Pauly Fuemana of the band (OMC) Otara Millionaires Club. Photo / Supplied
James Wilson, director of valuation at OneRoof's data partner, Valocity, said that with the suburb’s huge influx of both first home buyers and investors “value trends are only going to go one way".
“Logically, those values will spread out in concentric circles as first home buyers then jump to Takinini, Papakura or Manurewa.”
Tom Rawson, who co-owns Ray White offices in Manurewa, Manukau and Mangere Bridge, said that Otara prices were still good value for developers.
“With prices that are still under $1000 per square metre, that’s undervalued compared to say, Manurewa over $1200 or Papatoetoe close to $1500 per square metre.”
Rawson said the appeal of Otara to developers wanting to put up new buildings is that it was the last of the quarter acre suburbs. Sections in the neighbouring 1990s and 2000s suburbs like Clendon or Takinini are less attractive at just 600sqm or less.
He said families cashing in on their bigger sales were taking their money to buy new homes in nearby suburbs of Papatoetoe or Flatbush, trading off smaller yards for the insulation, extra bedrooms and modern comforts of brand new.
“But buyers want to stay close to their friends and family, still in their community. This will just progress as more infill comes to the older neighbourhoods – the same lifestyle and life, just a smaller section.”
Rawson said that the lack of land opening up in South Auckland on the fringe of suburbs like Randwick Park, Alfriston and Takanini would keep Otara prices high.
“They’ve done a good job with Addison [town centre] in Takinini, but now they need more. The Future Urban zoning needs to be opened up, there’s all that huge flat land pushing out to Papakura or Ardmore that needs to be stage 2.”
The heat has stayed on Otara, with agents from Rawson’s offices selling three family homes at prices ranging from $708,000 to $810,000 last night.
