First-home buyers could benefit from the “liquidation sale” of nine Auckland apartments worth more than $4 million in total, a listing agent has told OneRoof.
Steve Kirk, from Ray White, is acting on behalf of investors, who are selling off their portfolios in the CBD. Asking prices for the apartments range from $289,000 to just under $700,000.
Kirk, who is marketing the properties in OneRoof’s listing magazine as a “liquidation sale”, said he had already sold 11 units in the Ascent building, on Hobson Street, as part of the sale, most of which were scooped up by first-home buyers.
“The apartments sold for around the $500,000 mark, so they’re in that sweet spot for banks and first-home buyer budgets. They were around 50sqm [each] with two bedrooms and car parks.”
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Kirk said his vendors were selling for a variety of reasons. One was splitting with their business partner, while another was selling up to buy commercial property instead.
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The agent said none of the sales had been motivated by the recent reduction in the bright-line test, explaining that his vendors had owned their apartments for more than five years.
The new two-year bright-line rule, which took effect on July 1, is expected to bring tax relief to investors and make it easier for them to sell.
Under the rule, vendors who sell a property that isn’t their main residence within two years of the initial purchase are liable to pay capital gains tax. The previous Government had set the bright-line period at 10 years.
In the lead-up to July 1, real estate agents told OneRoof the change would bring a surge of investor listings to market.
So far Kirk and his team haven’t seen evidence of this. “We haven’t noticed an increase in vendors yet. It’s probably a little bit too early to tell. But certainly, there will be a lot of people who are no longer subject to bright-line. We expect some will sell, but the rental market is still strong, so there are reasons to hold as well.
On the market for $289,000 is a one-bedroom apartment at 611/149 Nelson Street, in Auckland. Photo / Supplied
Pitched as a "bank-friendly bargain" is 604/149 Nelson Street which has an asking price of $355,00. Photo / Supplied
“I think vendors would still need a reason to be selling, like they’d be looking to do something else with the money. I don’t think that they’d be selling just to cash up.”
The latest tranche of “liquidated” apartments Kirk and his colleague Chris Cairns are selling include 5B and 6B in the Nautilus Apartments at 18 Hobson Street, and 322, and 709 in the Heritage Apartments building on the same street. Kirk expects the listings will excite owner-occupiers.
“The Heritage is the old Farmers building, and the apartments are being sold with vacant possession. They’re both over 50sqm. A lot of the buyers in that building use it as a home away from home or bach in the city,” he said.
“Quite a lot of people who have [bought] in that building live on Waiheke and they want something in the city that’s nice, has good facilities, is well-maintained and has good staff. The Heritage Hotel runs its business out of that building. These units aren’t in the hotel pool, but you do get that security and concierge, which is attractive to people who want to live there.”
Kirk said the listings still had the potential to attract investors. The two apartments in the Heritage building had gross yields of around 6% and the Nautilus apartments had gross yields of around 5.7%.
The two Nautilus Apartments are more than 80sqm in size and are being sold with car parks for $699,000 each, or $625,000 without car parks.
Kirk said the other listings were in the Ascent Apartment building.
Apartments 604 and 611 were one-bedroom units and priced at $355,000 and $289,000 respectively. Apartment 528 had two bedrooms and was priced at $425,000.
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