A block of state housing land for sale in Sandringham is ripe for a townhouse development that could net a developer $28 million, a property expert has predicted.
Seventeen state homes on Haverstock Rd were yesterday bulldozed or removed as Housing New Zealand continues to move stock from flourishing suburbs, where it is too expensive to rebuild or refurbish, and reinvest in more affordable areas.
The freehold land, on seven sections spread across 10,629sq m, is now for sale by tender with potential buyers able to purchase one or all sections.
Bayleys advertising encourages buyers to "buy one, two, or the entire seven".
"Here lies an exceptional opportunity for residential developments and to purchase seven lots that range in size from 787sq m to 2266sq m, all having street frontage in Residential 6a zone in the sought-after central suburb of Sandringham," the listing reads. "Stake your claim because land opportunities like this do not appear often."
The area is within the zone for Mt Albert Grammar and Edendale Primary.
The current valuation for the sections combined is $6.89 million, but property commentator Alistair Helm said the figure took into account the houses on the sites. After removal, the land was more likely to sell for $5.5 million combined.
A site of 2000sq m would fit at least 10 townhouses on it and if sold for $400,000 each, could net the developer $4 million per site upon resale.
He said it was unlikely the sections would appeal to someone looking to build their own home as they would need to spent upwards of $600,000 on the land, before spending at least another $500,000 on building a a custom-built home that did not reflect the neighbouring properties.
"The sense would be, on those sized sections, that it would be a developer looking to do multiple units," Mr Helm said.
"Ten of those would net you $4 million. There's going to be greater demand in that area because it's affordable ... people at the lower or middle end of the property market can't really afford the inner suburbs, so they're going to switch to the next one down ... that's why I think there is going to be good interest in the sections by developers."
Road to a new life goes via prison for unwanted state houses
Some of the state homes marked for removal are to be refurbished by paid inmates at Spring Hill prison.
The top levels of the 17 units, from 98 to 130 Haverstock Rd, are being moved to the facility in Te Kauwhata, north of Huntly in the Waikato.
A Housing New Zealand spokeswoman said two of the units would be joined up and turned into a single-level home with four to six bedrooms and placed on a vacant section in Otara, where a house was removed because of water damage.
"A large family from our waiting list or a current state housing family that needs a bigger home will be moved into the house once it's on the section in Otara in several months' time," she said.
The corporation formed a partnership with the prison in July 2008 and has since transported 46 top-level units to the prison for refurbishment. A further 11 units will be taken to the prison by June 30.
The work is aimed at upskilling prisoners in industries experiencing skill shortages.
It also helps enhance their chance of gaining employment outside prison.
98 CV: $1.36m, 2266sq m
104 CV: $890,000, 1252sq m
108 CV: $1.31m, 2223 sq m
116 CV: $1.16m, 1867sq m
124 CV: $880,000, 1209sq m
128 CV: $620,000, 787sq m
130 Cv: $670,000, 1025sq m
Total: $6.89m, 10,629sq m