The owner of a historic villa in one of Auckland’s wealthiest suburbs is prepared to sell it for a near-$800,000 loss just so they can be rid of it.
Ray White listing agent Jerry Chen said his client who is a commercial investor had planned to transform the heritage property at 37 Hepburn Street, in Freemans Bay, but pulled the plug on the project.
“They need to get it gone. There’s money to be made in other deals for them,” Chen told OneRoof.
The out-of-town investor bought the heritage home – which is divided into five self-contained units – in April 2023 for $3.85 million. The intention was to turn it back into a single dwelling but the property was relisted for sale within a matter of months.
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OneRoof records show the owner has dropped their price several times, with the most current offer being $3.095m.
Chen told OneRoof: “This was a project that doesn’t fit their typical risk appetite. They took a punt on it and it just hasn’t worked out. It’s not what they are used to doing. So they’ve learned their lesson and they’ve got to get out. They’ve essentially decided they are going to count their losses.”
Chen said the property, which has a CV of $4.2m, would probably suit a wealthy family, a developer or an architect looking to create a beautiful home.
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“The way to make money on this property now is to capitalise on [the owner’s] misery.”
The property was originally built in 1910 as a large house before it was turned into a boarding house in the 1960s. It was later converted into its current layout of five apartments in the early 2000s.
The category A heritage zoning meant resource consent would be needed for any alterations to the property, Chen said.
“Essentially like all Ponsonby houses that are original in the front, but epic in the back and modern – that’s what you could do here.”
Chen said the property had one of the best positions in the greater Ponsonby area and was surrounded by homes with starting prices from $6m to $9m-plus. “A lot of people go to this property and look at the view and go, ‘wow’.”
He estimated at least $2m would be needed to transform it into a mega-mansion, which would likely be worth $7m-plus once completed.
The Hepburn Street property was transformed into five apartments in the early 2000s. Photo / Supplied
The property boast clear views of Auckland CBD. Photo / Supplied
In the meantime, the five flats were tenanted and provided a holding income that was “almost double” what would be expected in the area.
“You could tenant it as you do plans or getting resource consent so you are not sort of bleeding as much as you normally would or if you don’t have much debt you would actually be making an income while you wait.”
Chen said another reason for the dramatic price drop was that high interest rates and the commercial nature of the property had reduced the buyer pool.
“Once you get above three dwellings, the banks view it as a commercial operation, not a residential house.”
Whitefox sales director Ryan Teece said Freemans Bay was seen as a more affordable option than neighbouring St Marys Bay and Herne Bay. It was also was closer to Ponsonby Road and had easy access to the motorway. “You are getting a lot of bang for [your] buck in that suburb,” he told OneRoof.
Unlike neighbouring suburbs, Freemans Bay offered a huge mix of properties, ranging from apartments and small cottages to large homes.
“It’s such a unique suburb. It’s not very big, but it’s probably got one of the widest range of properties in the city-fringe suburb. There are entry-level cottages next to some of the best homes in the country.”
A two-bedroom, one-bathroom cottage on Costley Street, in Freemans Bay, recently sold for $1.5m to a buyer wanting to be within walking distance of work. Photo / Supplied
A four-bedroom, three-bathroom home on Arthur Street has an asking price of $9.5m. Photo / Supplied
He recently sold a small two-bedroom cottage on Costley Street for $1.5m and is marketing a large four-bedroom home at 26-28 Arthur Street with an asking price of $9.5m. The contrast between the two was “quite extreme”.
The Arthur Street home spans two sites and while it looks like the neighbouring character villa, it was actually built in 2011 and had all the modern conveniences.
“Essentially the whole home is new. Most other [character] homes around Freemans Bay are renovated but from original villas.”
“One thing I’ve found with Freemans Bay is the people who live there really want to stay there. They means there’s not that many homes available at any one time.”
The owner of the Costley Street cottage only moved two streets over to a larger home and wanted to remain in Freemans Bay. “The upsizing and downsizing within the suburb is quite extreme and I guess that’s just the location.”
He added: “I just think it’s still such an undervalued suburb. You think of all the city-fringe suburbs in the world and they are generally the most expensive. Yet Freemans Bay is still relatively affordable.”
Teece said those with more money preferred to buy fully renovated properties. “If it’s a fully finished home, you are going to be well-appointed and people are going to come in the droves.”
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