A South Auckland house that made headlines 18 months ago is back on the market for sale, with the owner looking to recoup their costs.
The three-bedroom home at 30 Franklyne Road, in Otara, became the suburb's most expensive home in September 2021 after selling under the hammer for $1.585 million - more than double its then CV.
The tired house, which sits on 986sqm of developable land, was one of many in south Auckland that were snapped up by developers at the height of the property boom.
However, the development market in Auckland has since come under considerable pressure, with falling prices and rising borrowing and building throwing many plans into disarray.
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The owner of 30 Franklyne Road decided against developing the property and has relisted it with an asking price of $1.55m. It comes with building and resource consent for five five-bedroom houses and is being marketed at developers and investors.
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Harcourts listing agent Raj Jouhri said the vendor listed the property last year to see whether they could get their money back.
He’s due to meet with them again in the next week to discuss whether they still hold this position or if they are ready to meet the market. “If they are not then we might be discussing the idea of just withdrawing the property from the market,” he said.
Jouhri said investors were thin on the ground right now, with much of the interest in the market coming from first-home buyers and established developers.
This is the second time a developer has walked away from developing the Franklyne Road site.
The property was initially purchased in May 2020 for $800,000 and the owner secured resource and building consents for five terrace homes on the site.
The Franklyne Road property has building and resource consent for five houses. Photo / Supplied
Ray White agent Karlen Athnaeil, who marketed the property with colleague Rubal Singh, told OneRoof at the time that the vendor had planned to complete the project himself “but due to the price of development rising he decided selling would be the best option for him”.
The property was taken to auction in September 2021 and attracted eight experienced developers leaving the seller with a healthy $785,000 profit.
Ray White Manurewa salesperson Tom McCartney said the market has completely changed since these properties were bought by developers in 2021 and some of their plans don't make financial sense now.
Not only have property prices fallen, but interest rates both from mainstream and second-tier lenders have also risen significantly, he said. The latest OneRoof house price figures show the average property value in Otara has tumbled more than 20% ($193,000) in the last 12 months to $751,000.
“I guess it’s just the build costs are going up through the roof, but on the other side, the price they can actually sell them for is getting squeezed down so it’s just I guess making it less attractive," McCartney said.
“At the end of the day for a lot of the developers, it’s basic maths you know, and you have it on your spreadsheet what it’s going to cost you versus what you are going to sell it for at the other end, and a lot of the prices people were paying at the peak in 2021, they just don’t stack up now so for some people. They can either sit there and hold it as 7% interest rates or for a lot of them they just want it off the books to stop the hurt.”
Some are even prepared to take a hit on the sale price just to get it sold, he said.
McCartney also sold two neighbouring properties on Antrim Street in September 2021 with each fetching an impressive $1.01m each. Those properties now have RVs of $800,000.
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