Two rental homes in the South Auckland have sold under the hammer for $2.1 million – less than four months after the owner picked them up for $1.46 million.
Three developers competed for the two properties at 19-21 Crown Crescent, in Otara, at Ray White’s auction on Wednesday.
READ MORE: Find out if your suburb is rising or falling
The eventual buyer plans to rent out the two homes while working out long-term plans for the combined 1715sqm site.
Start your property search
19 Crown Crescent has a three-bedroom home with detached rumpus and garage, while 21 has a five-bedroom home.
The properties, which are zoned mixed housing urban, were listed with development plans for 12 townhouses.
Ray White agents Jarvis Adams and Garry Singh had marketed the properties as “a developer's goldmine perfectly positioned to gain from a significant leap in median house prices in the vicinity as stand-alone homes on quarter-acre sections increasingly give way to high-density housing”.
The properties came with development plans for 12 townhouses. Photo / Supplied
The vendor had bought 19 Crown Crescent in November for $650,000, then picked up 21 a month later for $810,000. Wednesday’s sale price of $2.1 million - a first for the suburb - delivered the vendor a profit, on paper at least, of $640,000.
Last month a similar flick in Papakura saw a property at 28 Clevedon Road sell for $1.47 million, less than a year after the vendor purchased it for just $840,000. In that case, the seller had not made significant improvements to the house, but again had approved plans to build seven dwellings on the 1012sqm site.
The latest OneRoof house price figures show Otara’s median property value has jumped more than $200,000 in the last 12 months to $775,000 but sale prices of $1 million in the suburb – once unthinkable – have become increasingly common in the last few months.
Singh and Adams had held the previous Otara price record of $1.256 million with their late November sale of another development site at 1/208 and 2/208 Preston Road. That had a relatively small 796sqm site for a pair of two-bedroom units and had a joint CV of $870,000.
28 Clevedon Road, in Papakura, sold for $.47 million less than a year after it went for $840,000. Photo / Supplied
At the time Singh told OneRoof: "It’s definitely gone crazy. Every where's a million-dollar suburb now, particularly anything over 800sqm.”
Tom Rawson, principal of Ray White Manukau, Manurewa and Mangere Bridge, told OneRoof yesterday there was a lot of heat in the suburb
“Otara is going crazy. Side by side sites are increasingly popular and developers are targeting them for the increased density they offer when redeveloping under the unitary plan."
A pair of units at 208 Preston Road, Otara, sold for $1.256 million at the end of November. Photo / Supplied
Rawson, who began his real estate career in Otara, said that while some developers were buying sites to hold and flick, others, such as the owner of the Crown Crescent homes, were adding value by combining two sites into a much more appealing proposition for fellow developers.
“Instead of, say, five units on a 700sqm site you might get 12 units on a 1400sqm site, which brings the average purchase price down per unit.”
He said that Otara had become a desirable suburb for people with strong family and community connections to the area.
“Seven years ago, people would never sell the family home, but now there’s a dramatic change in enquiry. Mum and Dad see that they can sell the old overcrowded and damp house, and buy a brand-new home that’s healthier.
"A lot of these properties are mortgage free, they’ve been there 40 years, so they can put two substantial deposits down and buy a house for them and one for their kids. Otara has enough parks and public spaces that you don’t need a big empty lawn. A new house is far healthier than 10 people in a house with no insulation.”
