The big money being paid by developers and investors in South Auckland shows that lockdown hasn't put the brakes on the city's housing market.
In Drury, right on the southern boundary of Auckland, a sprawling 2646sqm section in the village sold for a record $4 million, while a rundown house on a nearly 1000sqm site in Papatoetoe fetched $2.28m and a home and income property in Romney Place, Manurewa, sold for $1.383m.
The properties were all bought sight unseen by the buyers, who outbid between six and 21 others in online auctions.
The sale of adjoining properties on Sutton Road in Drury, on the corner of Great South Road near the local primary school, for $4.07m - a whopping $2.85m over council valuation - shows developers are starting to look further south, said the Ray White agent who marketed the property, Adele Cooper.
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The pair of houses on Sutton Road in Drury set a record for the village near Auckland's southern boundary. Photo / Supplied
She and colleague Manuela Isaac launched the property, which included a 1910 two-bedroom bungalow, a 1990’s three-bedroom dwelling, a sleep-out and a garage, just before lockdown but decided to move the auction from the end of August to this week.
“There were seven registered bidders, and we reached a record sale price for Drury village,” said Cooper, who added that buyers did not seem to be aware of nor put off by Auckland Council’s proposed hike in development fees by $84,500 per home for new neighbourhoods being planned on the eastern and western edges by Oyster Capital, Fulton Hogan, Kiwi Property and Charles Ma's Auranga.
Developers plan to create huge new neighbourhoods on the east and west of old Drury village. Photo / Supplied
“Interest is just starting here because Papakura and Manurewa prices have got so high. The buyer is still working on plans, but we’re starting to see the first two storeyed adjoined houses mixed suburban development go up in the village.
“People are amazed how much land commands in the area now.”
Papatoetoe, with the brand new Puhinui train station and transport hub, and handy to hospital, airport and Manukau, is also seeing a growing interest from developers, said Barfoot & Thompson agent Paresh Parshotam.
He marketed a tired three-bedroom home on Wallace Road with Alex Ngo. Its good street frontage on 997sqm zoned for urban development, plus a 12-month settlement, enticed some 10 or 12 bidders from all over Auckland.
A three-bedroom home on Wallace Road, Papatoetoe, South Auckland sold for $2.28m. Photo / Supplied
The sale price of $2.28m is more than twice the property’s council valuation of $1.005m, and a record price per square metre for urban zoned land, said Parshotam.
“I’ve specialised in South Auckland for 17 years, but now I’m seeing developers looking from all over the place. Everyone has become a developer,” he said.
“My experienced developers say to me ‘I don’t understand how they’ll make that work’ at the prices people are paying now. Experienced builders know the margins, but newbies have to do their due diligence.”
Parshotam said developers on similar-sized sites would expect to build six or seven two-storeyed homes, but now are going up to three storeys to fit eight or nine new homes.
“Demand is for three- and four-bedroom homes. People would like five bedrooms, but it’s hard for developers to make that work and meet council minimum room sizes.”
22 bidders drove the price of a smartly renovated home with a new accessory dwelling on Romney Place in Manurewa, to $1.383m. Photo / Supplied
He told OneRoof three new five-bedroom homes on Wallace Road fetched between $1.2m and $1.35m in February, while developers would expect high $800,000s to low $900,000s for a three-bedroom and mid-to-high-$900,000s for a four-bedroom terrace.
Twenty-two bidders, most of them investors, competed for a legal home and income on Romney Place, Manurewa.
The vendors, who bought the original 1950s three-bedroom house six years ago for $576,000, had smartly renovated the house, adding a new kitchen, bathroom and double glazing, and built a brand-new two bedroom accessory dwelling on the back, said the Barfoot & Thompson agent marketing the property, Kamal Sivia.
Auctioneer Murray Smith said there were 81 bids starting at $900,000 and four bidders were still going past $1.3m. It sold for $1.383m, well above expectations.
The property was launched just on lockdown, Sivia said, without time to do videos, three-D walkthroughs or even get a sign out on the street, but that did not deter buyers. The first enquiry came in just 90 minutes after the listing went live at midnight, and there were three pre-auction offers.
The buyer is an experienced investor.
Sivia said “crazy prices” in Manurewa were now pushing interest out to previously ignored Weymouth and Clendon Park, where houses were starting to go for more than $1m.
