Would you pay a million for this 'unliveable' Ponsonby house?

A run-down shack in the much sought-after suburb of Ponsonby could be yours for under $1m - but buyers beware it will need a bit of work to be transformed into a dream home.

Jutting out above a small concrete wall lined with paua shells on Summer St is a weather-worn shack, that at just under $1 million could be the lucky break for an aspiring Ponsonby homeowner.

The rickety 48sq m house which sits at the end of a narrow 244sq m slice of land, surrounded by classic villas, is up for auction on Thursday October 26 - unless sold prior.

The property at 89 Summer St, which has a rating value (RV) of $930,000, is not liveable in its current state, with its sagging floors, heavily damaged, cobwebbed walls and precarious stairs.

But as property information site QV.co.nz indicates, it is the land that has the most value at $910,000. Improvement value (the house) is only $20,000.

The small dwelling at 89 Summer Street in Ponsonby is up for sale. Photo / Greg Bowker

It is the second time the property has been on the market this year, having been purchased by Aucklander Mark Harper, 62, for $800,000.

He said when he first looked at the house the amount of work it required was daunting, but it was all about the location.

"We put a bid in because you are looking at entry level for getting into a Ponsonby suburb. The fact is Ponsonby, anywhere central city, is expensive to get into.

"This still gets you a reasonable size of dirt, albeit it small, but relative to section sizes in Ponsonby this can be seen as normal, so gives you that opportunity as a developer."

Not without its charm? Photo / Michael Craig

Harper said the house was unliveable and not fit for anything but demolition.

"No straight floors in the property, heavily damaged wall linings, it has obviously been rat-infested at times, he said. "It's gone beyond repair and renovation, that's the best way to describe it."

Harper said with some help from his son he had hoped to build a neat little house in the central city suburb, but due to personal health reasons he was reluctantly putting it back on the market.

Ray White agents Zarlane and Bernie Grubisic marketed the Summer St property both times it was up for sale this year, openly describing it as a dump that would need an owner with imagination and determination.

"All is seriously not well with the exterior, let alone the interior. Not for the faint-hearted. Bring your architect, builders, engineers and your imagination," said Zarlane Grubisic.

"If you don't have that big bag of cash, here is your opportunity to get into one of Auckland's sought after inner-city suburbs in a more affordable way."

The inside of the property at 89 Summer Street, Ponsonby. Photo / Michael Craig

Despite the extensive work the property would require, it could be considered a bargain in a suburb where the QV median sale price across the last three months was $2.2m.

The property information site showed Ponsonby homes were on average going for 40 per cent above the rating value.

On the same street as Harper's property, a 3-bedroom pre-1914 villa with a rating value of $1.09m was sold for $1,495,000 - $405,000 (27 per cent) above its valuation.

Just around the corner on John St a two-bedroom villa, dated pre-1914, with a rating value of $980,000 sold for $1,372,000 - $392,000 (26 per cent) above valuation.

The back garden of the house at 89 Summer Street Ponsonby. Photo / Michael Craig

Homes.co.nz chief marketing officer Jeremy O'Hanlon said even though the house had seen better days, the property had location going for it.

"People don't head to Ponsonby for large leafy sections."

He said it would certainly offer great potential to someone with a creative mind.

"I'm sure a creative architect would love to work with such interesting constraints."