A two-bedroom house in Auckland has defied the city's red-hot property market by selling below CV.
The house on Gardner Avenue in New Lynn sold at auction this week for $640,000 - a surprising $50,000 below its 2017 rating valuation.
The listing agent, Bayleys Mt Albert's Victoria Turner, told OneRoof that the 1940s house needed a lot repairs and had been bought by a father and son as a renovation project.
OneRoof records show the house last sold in 2007 for $325,000.
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Turner said: "The buyers are experienced renovators and they are going to restore the house. There are some good homes on Gardner Avenue. It's a lovely, quiet street with easy access to the mall and schools."
The house had not attracted any interest from cashed-up developers or land-bankers despite sitting on land zoned for development. "The house was on a cross lease and was ready to be re-built," Turner said.
At the same Bayleys auction, a pair of properties zoned for terrace housing and apartments in Mt Albert fetched $2.55m, more than $800,000 above their combined CV, while a rundown house on a 1026sqm section zoned for development in Glen Innes sold at a Barfoot & Thompson auction this week for $2.52m, more than double its CV.
The Gardner Avenue house had maintenance issues and was billed as a renovation opportunity. Photo / Supplied
The sale price for Gardner Avenue goes against the market trend in Auckland.
The latest monthly OneRoof-Valocity figures have shown a sharp increase in Auckland house prices. The city's median property value in July jumped almost $200,000 in the last 12 months to $1.127m.
OneRoof's analysis of sales figures for July and June show properties in the city typically selling for 30% above their rating valuation, a reflection of the heat in the market and the fact that CVs in the city were last updated in 2017.
Auckland home owners were due to get new CVs last year but the Covid-19 lockdowns delayed the process. New CVs, expected to be issued at the end of this year, should be more reflective of current sale prices.
However, data supplied by CoreLogic shows that sales below CV in Auckland are not all that uncommon. This year alone more than 600 properties in the city sold below CV, the data shows.
CoreLogic chief economist Kelvin Davidson said: "Of those, there are about 170 properties that have sold 10% or more below their rating valuation, about 80 of which are flats or apartments."
CoreLogic also noted five one-bedroom apartments in Auckland CBD that sold for sums 40%-50% below CV. The apartments were all built in 2007 or earlier and were 50sqm or less in size.
"Even in this hot market, sales do still take place below CV - perhaps more often than what people might think. The general tendency within Auckland is for these ‘under performers’ to be smaller and older,” Davidson said.
“In addition, the owners can often be investors who have taken a business-minded approach post-Covid, and decided to cut their losses and sell, perhaps having suffered from a lack of tourists or foreign students."
