Uninhabitable homes have been selling for ultra-low prices in Christchurch this year.
A house that was touted as being beyond repair has claimed the title of the city’s cheapest listed freehold property of 2022, selling for $150,000 in August.
The dilapidated property, which sits on a 365sqm freehold section on Riverlea Estate, in Kainga, was sold “as is where is with no insurance and no cash pay-out”.
Listing agent Di Clement, from Total Realty, said there had been a lot of interest in the property, but many of the people enquiring hadn't realised it was beyond repair and needed to be bowled.
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The previous owner had received the EQC pay-out, but had not carried out the remedial work. “You couldn’t have lived in it and it was completely and utterly unrepairable.”
The new owners are in the construction industry and planned to remove the structure and build a bach on it so the family had somewhere to do fishing or white-baiting.
While Clement has sold cheap properties before in her 30 years in the industry, the Riverlea Estate property is the cheapest one she’s sold in recently.
The city’s next cheapest listed freehold property is a “dilapidated 50sqm two-bedroom shack” on a cross lease section on Bower Ave, in Parklands. It sold for $190,000 in March this year and for $223,900 four months later.
Harcourts listing agent Gerardo Guzman said the March buyer had picked up the property for a good price at auction with the plans of doing it up and flipping it, but had decided to sell it a few months later after his plans changed.
Despite doing nothing to the property, he still managed to make a profit after receiving two offers on it. The new owner plans to redevelop the property.
Guzman said it is the ugly properties that people buy, do-up and resell that seemed to make the most money.
A two-bedroom house on Bower Ave, in Parklands, was bought in March and then flipped a few months later. Photo / Supplied
This leasehold property on Harris Crescent, in Papanui, sold for $100,000 in June. Photo / Supplied
Just last week a plaster townhouse on Barbadoes Street was withdrawn from auction and then sold for $220,000. The three-bedroom property, which was sold “as is where is”, was advertised by Bayleys agent Bob Eastgate as being a “perfectly liveable” property that could make a great rental investment.
While a leasehold property on Harris Crescent, in Papanui, sold for $100,000 in June due to the new owners only buying the house and having to still rent the land.
Bayleys agent Angela Webb who sold the Harris Cres property, which had initially been asking for offers over $120,000, said the house had been bought by an older couple who weren’t worried about the lease because of their ages.
Webb said only a few leasehold properties come up for sale because in some cases the owners of the houses had already taken the opportunity to buy the land.
There are two “as is where is” properties being sold at Bayleys auctions this week including a “perfectly liveable” home at 42 Petrie Street, in Richmond, which requires additional re-levelling work on the floors to be within the allowable tolerance to get insurance.
Another “as is where is” property is 57 Warden Street, in Richmond, which has been divided into two flats was bought last September for $342,500 and is being resold in the same broken condition.
For sale: three-bedroom home at 42 Petrie Street, in Richmond, goes to auction this month. Photo / Supplied
57 Warden Street, in Richmond, Christchurch, is being sold "as is". Photo / Supplied
Webb said “as is where is” properties could be leaky or have some form earthquake damage so usually sold at a price that acknowledged the fact that someone was going to have to do a lot of work into. In most cases they couldn’t get insurance so the banks will not lend on them.
However, some “as is where is” homes can still be lived in and are bought as investment properties, she said.
“The whole market of ‘as is where is’ properties, a lot if has been investors over the years who have rented them out. Done nothing to them or maybe just done a quick patch job on them – just doing the bare minimal to make them liveable.”
Others are bought by parents for their children to live in or by professional renovators who do them up before on selling them.
A property on Petrie Street sold in April is its ‘as is where is’ condition for $570,000 and after being repaired, renovated and extended was resold in August for $977,000.
A three bedroom plaster home on Barbadoes Street recently sold for $220,000. Photo / Supplied
A two-bedroom unit at 3/82 Brynley Street, in Hornby, goes to auction on November 17. Photo / Supplied
But for those wanting a home that doesn’t require any structural work, Webb said the next step-up would be a one or two-bedroom unit such as 3/82 Brynley Street, in Hornby, which has a price guide of over $350,000.
Harcourts salesperson Zani Polson said any property in Christchurch priced under $200,000 would likely be an “as is where is” property or a section in the middle of nowhere and there would be very few available at that level.
“I think anything in the lower $300,000 these days, you are definitely questioning why and where it is at,” she said.
“Most things, even if they are a bit dire, are still in the $300,000s to be fair.”
The cheapest properties Polson has sold including some ‘as is where is’ houses have been between $300,000 and $400,000.
There are always cheap properties in the market, Valocity senior research analyst Wayne Shum said, but they sometimes have structure issues such as weather-tight issues or require extensive upgrades.
“When these properties are within a unit title block it further deters buyers and may further reduce prices as they require the all owners to contribute to the work.”
