Parnell block's million-dollar profit in two years

By Anne Gibson, Abbie Gillies

Parnell Road. Photo /  Nigel Marple
Parnell Road. Photo / Nigel Marple

An empty, scrubby section in Parnell has been sold for $2 million - twice its value when bought two years ago - as soaring property prices in Auckland continue to outstrip those in the rest of the country.

Simon Mabin and his wife Chantelle Joseph sold their vacant 970sq m plot in upmarket inner-city Parnell for $2 million last month.

The price was $900,000 above the capital valuation and more than double the $950,000 they paid in 2010. That represents a daily profit of $1438 during the two years they owned it - without them doing a thing.

Mr Mabin, 33, said he was delighted with the deal, but confessed he had little experience in the market and believed the profit was largely down to good timing.

"I'm very lucky. I think there was a lot of uncertainty at the time and there's a lot more confidence now," he said.

The Logan Tce section is near the village centre, known for its galleries, cafes, restaurants and boutique stores.

Before being subdivided, it was part of the homestead belonging to Auckland founding father Sir John Logan Campbell.

Mr Mabin believed the property was also a good buy for the new owner: "It's a $2 million site and if they did a good $2 million build, they could sell it for $5 million, I'm told by agents."

The sale was made before the release of Realestate.co.nz's April report highlighting soaring city prices.

The average asking price was $568,820, a rise of $9451 on March. This goes against the national figure, which was down $6033 on March at $423,832.

Realestate.co.nz chief executive Alister Helm said Auckland asking prices were at a record high because of a desperate shortage of properties for sale.

High prices were an effect of short supply, and the price surge was understandable because of the increased pressure caused by strong sales not being matched by an increase in new listings.

The number of new Auckland listings fell 28 per cent from 4375 in March to 3159 last month, and he expected little difference in the winter, when activity usually falls away.

The Waikato and Canterbury regions also had a drop in new listings, but also had drops in asking prices from last month's peak.

Waikato recorded the biggest price drop, with a difference of $21,806 from March to April.

The national inventory of houses for sale dropped 23 per cent from 13,265 March listings to 10,174 last month.

"Every April, we tend to see a drop in new listings as the traditional New Year surge of activity finally starts to wane," Mr Helm said.

"The number of new listings is virtually identical to April last year, but what is different this year is that demand has remained high, with year-on-year sales up more than 20 per cent."

Continuing demand might push asking prices up even further, but April did not unleash a flood of listings as might have been expected in light of indications that the property market was alert and very much alive, particularly in main centres.

The market did not appear to be diving headlong into a property bubble, but is seeing steady turnover and pragmatic buying and selling, Mr Helm said.

Christchurch also has a shortage of properties for sale, with a 24 per cent fall from 1532 in March to 1172 last month, although the figures show prices are stable.

Central Auckland has a shortage of apartments listed for sale, with a 20 per cent drop from March to April.

Property management and rental business Crockers said 55,000 people were predicted to be living in the downtown area by 2037.

- NZ Herald

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