KEY POINTS:
A real estate agent keen to sell a $5 million Auckland house in the depressed property market is resorting to an unusual method.
Pene Milne, of Premium Real Estate in Herne Bay, is selling the two-level colonial mansion at 11 London St in St Marys Bay this month using the Dutch auction technique, in which prices start high then drop.
The system is the opposite of the standard house auction, where bidders work from low to high.
In a Dutch auction, the auctioneer starts by offering the property at a high price. If no one accepts, the price is gradually reduced until a bidder responds.
Pene Milne said the house owner had the right to reject a too-low offer.
The house is owned by Rick Martin's Takapuna Village. Mr Martin is the developer of the 30-level Sentinel tower at Takapuna and bought the house from international businessman Mike Panjwani as part-settlement on the two-level $11 million Sentinel penthouse.
But Mr Panjwani did not settle the deal to buy the penthouse, leaving Mr Martin with both properties.
"She's an old lady of the city and I don't want to live in the city so someone will end up buying the house and selling the associated sites or developing them and making a lot of money," Mr Martin said of the St Marys Bay house.
The weatherboard house is above the motorway with sweeping waterfront and harbour bridge views. It is on a large site which has resource consent for two other dwellings.
Champion auctioneer Neil Newman said he had been an auctioneer for 30 years and had never been asked to do a Dutch auction.
Conventional auctions, in which the price rose, encouraged people to make one more bid and beat the last bidder, he said.
Real Estate Institute president Mike Elford said Dutch auctions were an unusual sales method.
