An Auckland apartment auction yesterday reached what an agency chief called "bargain basement" levels, one place selling for only $130,000, around a tenth of the city's $1.04m average current QV house value.
Martin Dunn, City Sales managing director, said the two-bedroom 41sq m apartment is in Quay Park's The Landings at 8 Ronayne St, off Beach Rd, between Parnell and the CBD.
"It was like pulling teeth," Dunn said of extremely low, slow bidding. "It sold eventually."
The sixth-level apartment has no balcony, one bathroom and is in a big block on leasehold land, he noted, which depresses values and sales price. No carpark comes with the unit, depressing it further and the block has suffered weathertightness issues.
Annual rates are $872.62 and annual body corporate levies are $5320 including ground rent of $2296, a City Sales information sheet showed.
Ngati Whatua Orakei Whai Rawa owns the land and owners must pay annual leasehold fees which are rising on regular reviews every few years.
Dunn said a two-bedroom apartment in Hudson Brown on nearby Mahuhu Cres in the Quay Park area sold for only $220,000.
That 70sq m fourth-floor place was also on Ngati Whatua Orakei Whai Rawa leasehold land, he noted. Council rates there are $1607.59 annually but the body corporate levy is $9003 a year.
"I regard these sales as absolute bargain basement," Dunn said, adding there were specific reasons for prices which included that the titles were not freehold so the apartment buyers would never own the land beneath their blocks.
Owners are also subjected to regular payment reviews, re-setting the ground rent to new, unknown sums in line with property value increases.
Mike Richards, sales director at City Sales, cited further reasons for the prices at The Landings and Hudson Brown.
"Both are on the same leasehold land with ground rent review on August 1 next year. The Landing complex is still finalising remedials, so a little problematic still."
Dunn said further low-priced apartments would be auctioned soon, providing opportunities for bargain hunters.
"We have more coming," he said.
Yesterday's auction failed to draw successful bids for a studio apartment in New Lynn's Crown Lynn Pl. The vendor was hoping for around $200,000 but there were simply no bids, Dunn said.
Yesterday's low prices did not reflect strong population grown in the city and high demand for apartments, he said.
"[This is] a funny time. A confidence flat patch [in the run-up] to the election? You and I have seen it all before," he said.
City Sales this week listed nine units in the 690-block Sugartree near the Nelson St/Union St intersection, after off-the-plan 10 per cent depositors try to avoid paying the remaining 90 per cent next month on the nearly-finished apartments.
Eight vendors included those in financial distress and investors from Christchurch who Dunn said attended property sales seminars. They are trying to sell their places for between $560,000 to around $800,000, Dunn said this week.
Interest is strong.
"I am waiting for contracts from Melbourne and Tauranga but no confirmed sales yet," Dunn said of that campaign.