Auckland speculators are pocketing $2000 a day while thousands of families kiss home ownership dreams goodbye. Lane Nichols investigates the crazy days of Auckland's housing market.
They're arguably the city's most popular homes, but don't expect infinity pools, designer kitchens or Hauraki Gulf vistas.
Four humble South Auckland properties -sold 25 times in six years.
The transactions, revealed by Corelogic data, are mostly by cashed up investors, but with a sprinkling of starter home owner-occupiers, movers and the odd doer-upper.
The basic properties are nothing flash - all within 15 minutes' drive among some of the country's poorest neighbourhoods.
Welcome to the modern day Auckland housing market. It's a speculators' paradise and there's big money to be made if you have the equity and the nerve.
Deep-pocketed investors buying and selling homes for huge profits have provided a rich vein of news stories. Some are questionable, others are simply savvy business people taking advantage of lax New Zealand laws.
Many homes are sold multiple times on the same day, sometimes soaring in value by hundreds of thousands of dollars at the stroke of a conveyancing lawyer's pen.
"Speculators are growing rich from their couches while struggling first home buyers are locked out of the market," Labour's housing spokesman Phil Twyford says.
"This shows the failure of the Government's measures to rein in property speculation which has become a parasite on Auckland."
Otara: 6 sales. Photo / Greg Bowker
Deep in the heart of Otara sits a pale blue house.
The tired, weatherboard home is unremarkable - with its corrugated iron roof, broken windows and rickety picket fence. Other than the fact it's been sold six times in four years, including four sales in 2015 alone.
Twice the plain Jane property, which sits beneath a giant high voltage power pylon, was sold two times in a single day, with its price rocketing by more than $150,000 in just 12 months.
Clendon Park: 7 sales.
Then there's a property in Clendon Park. Currently rented to a Pacific Island family, the house has been sold seven times since 2011.
A four bedroom cross lease rental down a shared driveway in Wattle Downs has been bought and sold six times since 2011 to a procession of investment companies.
One paid $595,000 for the house in April last year - handing the previous owner an instant $55,000 profit.
Wattle Downs: 6 sales.
Neighbour, stay at home mum Kayla Dolan, 26, has seen the property flipped multiple times in the last two years and says it's constantly rented out.
Some of the on-sales occurring across Auckland involve licensed real estate agents, who clip the ticket with big commissions.
Others are private sales, with investors selling to speculators, who on-sell to developers within private networks - gambling on the promise of rising house prices.
The potential rewards are even more lucrative now thanks to new development opportunities under the Unitary Plan.
The market is awash with money. The average super city speculator pocketed nearly $2000 a day last year or $70,000 per transaction.
Case in point: today's Weekend Herald story revealing an investor made $600,000 instant profit flipping two adjacent Pakuranga homes after just three days.
This and other similar cases have caught the attention of regulators and politicians.
Twyford is calling for a crackdown on speculators by banning foreign investors from buying existing homes and taxing anyone who flicks investment properties within five years.
He also wants a review of the law regulating real estate agents, questioning how sellers can have faith in some agents given the high amount of flipping going on.
The Real Estate Agents Authority (REAA) was grilled before a select committee last month on the level of on-selling and wet bus ticket penalties for untoward agents.
In response, its board chair announced a crackdown on flipping, with new technology being introduced to instantly track when properties have been on-sold, so investigators can proactively act without waiting for complaints.
But the REAA's focus is on agents and disclosure rules, not speculators making buckets of money.
Asked what the Government was doing to rein in investors, Revenue Minister Judith Collins says traders cashing in on the property market must pay their fair share of tax.
The bright line test introduced in October 2015 means anyone on-selling an investment property within two years must now pay tax on the profit, irrespective of whether they intended to make money.
It was designed to catch unscrupulous on-sellers who previously claimed "change in personal circumstances" to avoid tax.
New disclosure rules mean speculators are more visible to IRD and the Government has committed millions of dollars more to policing tax compliance in the property sector, Collins says.
"Therefore, people buying and selling a residential property within a short period will come to IRD's attention and correctly pay tax on any gains they make."
CoreLogic figures show investors now account for nearly half of all home purchases across Auckland, compared to just 19 per cent for first home buyers - a record low.
Senior research analyst Nick Goodall said it made sense for investors to target cheaper areas because there were more available buyers.
"Are they making some improvements? Some of them might be. And if they can go and put a lick of paint on it and add $10,000, $20,000 in value, then why wouldn't you do it?"
While prices across Auckland have tapered off, Goodall says interest rates are likely to remain relatively low, the city's supply problem is still pronounced and immigration remains strong.
He predicts prices will climb again after winter and the general election.
Four houses sold 25 times in six year:
• Otara: 6 sales - $275,000 on May 14, 2013; $610,000 on May 5, 2016.
• Clendon Park: 7 sales - $270,000 on Feb 22, 2011; $575,000 on Nov 7, 2015.
• Wattle Downs: 6 sales - $223,000 on Aug 9, 2011; $595,000 on March 15, 2016.
