Auckland's $1 million losses have spread from the city's southern suburbs to its trendy inner-west.
A 100-year-old bungalow close to where the former Prime Minister, Jacinda Ardern, bought her family home was snapped up at a mortgagee auction this week for almost $1m less than what the house sold for just 18 months prior.
The four-bedroom character home in Sandringham was purchased in October 2021 for $2.56m, above its CV of $2.25m, and resold at Ray White Remuera's auctions on Wednesday for $1.611m.
The property, which sits on a flat 612sqm site, was zoned mixed housing urban. The listing agents, Ari Starr and Cherry Killgour, had pitched it at developers, land-bankers or families due to its popular school zones and open-plan living.
Start your property search
Bidding opened at $700,000 and swiftly moved up in $100,000 bids until reaching $1m when smaller bids of mainly $25,000 were placed.
The auction paused at $1.45m before resuming at $1.5m, when the property was announced as being on the market, with the hammer coming down not long after.
Read more:
- Otara's most expensive house back on the market after record sale
- House prices drop to new lows, but $100K wipe-out is only part of the story
- The $12m luxury Remuera development that will be sold below cost
While several Auckland homes have sold for near-$1m losses this year, most have been in the city's south, where the rush to pick up development sites in 2021 inflated prices and saw modest homes being snapped up for $2m or more. The Sandringham bungalow is the first high-profile casualty of development market turmoil in Auckland's inner suburbs.
Sandringham is a much favoured location for buyers priced out of wealthier Remuera and Ponsonby. It is where Ardern and her partner Clarke Gayford purchased a 1920s four-bedroom bungalow in 2018.
Sandringham was one of several suburbs targeted by developers for intensification during the recent property boom, largely because much of the housing stock there sits on large flat sites zoned for townhouses.
Developers, some new to the game, bought sites at inflated prices hoping to turn a profit by either flicking the properties with consents attached or by developing the sites themselves. However, rising interest rates, increased building costs and falling prices have put the squeeze on developers, some of whom can no longer make the sums work and hold onto their properties.
The circa 1920s home was marketed at developers, land-bankers and families. Photo / Supplied
Houses in Papatoetoe, marketed as having development potential, have sold for almost $1m less than what they were bought for at the peak of the market.
Last month, a four-bedroom home on Saint George Street in Papatoetoe that was bought just over a year ago for $2.3m sold for $1.305m.
The Saint George Street house, was listed at the start of February, with the agents making clear it was an “urgent sale” and that the “vendor's circumstances dictate that this beautiful family home is now on the market and make no mistake it WILL sell”.
A “change in circumstances” also forced the owners of a 1940s bungalow on King Street in Papatoetoe to sell in March at auction for $1.465m - almost $1m less than the windfall they had been expecting.
Records show the owner of the three-bedroom home on King Street had sold the property at auction in November 2021 for $2.404m. However, the deal appears to have collapsed, leaving the original owner to sell it again, but this time getting a much lower price.
South Auckland Harcourts business owner Harsimran Singh told OneRoof last week that some sellers who had purchased development land in 2021 were now suffering and were reselling at major losses.
Analysis by OneRoof’s data partner Valocity show individual properties that were bought in 2021 were now selling for anything from a few hundred thousand dollars to half a million dollars below what they got back then.
“The developers have basically gone with capital growth off the table, [building] costs going up, interest rates going up, they're not playing ball anymore,” Valocity head of valuations James Wilson said.
- Click here to find more properties for sale in Auckland
