Lane Nichols is a senior NZ Herald reporter

Property investors 'flip' neighbouring Auckland homes for big profits

'Flipping' properties brings spectacular surge in prices. Photo / Jason Oxenham
'Flipping' properties brings spectacular surge in prices. Photo / Jason Oxenham

A modest Auckland bungalow sold three times in four days after an investor made a young family an offer they couldn't refuse then 'flipped' the property within 24 hours.

It borders another larger property in Mangere Bridge that was sold twice by speculators in the same timeframe.

Its price surged by $400,000 in under a week and another investor made nearly $1m capital gain in just six months.

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Both properties have now been purchased by a developer and are expected to be demolished or removed to make way for up to 18 townhouses.

The developer says he is concerned by the apparent price ramping and had no knowledge of the previous transactions prior to Herald inquiries.

In scenes likely to be repeated across the Super City, large subdividable sites are proving irresistible to wealthy investors due to their newfound development potential under the Unitary Plan.

One of the Mangere Bridge properties is a historic homestead once owned by Auckland department store owner George Courts, sparking fears a slice of history could be lost.

QV records analysed by CoreLogic show the Coronation Rd house changed hands three times last year within six months, with its sale price nearly doubling from $1.45m to $2.8m. The grand old homestead sits on a 1897sq m section and boasts its own pool, 'chapel' wine cellar and chandeliers in nearly every room.

Meanwhile, a bungalow next door on an 802sq m site changed hands three times in just four days after investor Hua Wu, also known as Danny, offered $1.9m to a young family which they couldn't refuse.

Property records shows it actually sold to Jia Liu on August 4 last year who on-sold the house the same day to Sha Liu. It was on-sold again on August 8 with its price jumping by $150,000.

Jessie and Ben Church bought the five bedroom house for $869,000 in December 2014. They said Wu made repeated purchase offers after he bought the neighbouring Courts homestead.

The $1.9m sale price was more than double what the Churches paid for their house 20 months earlier.

They were halfway through a renovation but believe the current owner, Chinese-owned property development company Treasure Plus Ltd, plans to demolish or remove both homes and build high density housing.

"It's just all a business calculation for them," Ben Church told the Herald. "It was a risk they took and it's paid off."

The Courts mansion's former owner Jennifer Woodman was shocked to learn her old property sold for nearly twice what she received for it just six months later.

"Oh Jesus. That's just crazy."

It needed work but was obviously more valuable as a development package with the front site, she said.

Woodman did not want the house to fall into developers' hands and thought Wu had planned to "do it up".

"But I guess if you've just spent $4m acquiring the block you are going to want some return."

She said it would be tragic if the historic home was torn down, a sentiment echoed by the local community.

In a new development, council heritage experts visited the property last week. A report is being prepared into the homestead's heritage value and whether it warrants protection.

Wu told the Herald he had planned to live there but felt unsafe so sold the property when he was offered a good price.

He had not bought the Churches' property and did not know any of the subsequent purchasers. He planned to pay tax on his capital gain.

A lawyer representing Treasure Plus Ltd said the company had no knowledge about the previous buyers or transactions. His client was concerned at the significant price increases immediately prior to purchasing the sites.

Though it had no "concrete" plans for the properties, "commercial sense" indicated the site would be developed to help ease Auckland's housing shortage.

TIMELINE

Coronation Rd, Mangere Bridge
Back property (1897sq m site):
• Feb 14, 2016: Sold for $1.45m from Jennifer Woodman to Hua (Danny) Wu.
• Aug 4, 2016: Sold for $2.4m from Hua Wu to Sha Liu.
• Aug 8, 2016: Sold for $2.8m from Sha Liu to Treasure Plus Ltd.

Front property - 802sq m site:
• Aug 4, 2016: Sold for $1.9m from Ben and Jessie Church to Jia Liu.
• Aug 4, 2016: Sold for $1.9m from Jia Liu to Sha Liu.
• Aug 8, 2016: Sold for $2.05m from Sha Liu to Treasure Plus Ltd.

- NZ Herald

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