Auction shows the lengths owners of leasehold properties are prepared to go to off-load houses.

It boasts four bedrooms, two bathrooms, is valued at more than $1.5 million and situated in the sought-after Grammar zone - and it could be all yours for just $1.

But there's a catch.

This renovated family home with its high ceilings, leadlight windows, polished wooden floors and freestanding fireplace is a leasehold property with annual ground rents of $37,500 until 2026.

The overseas owners of the 1012sq m property at 78 Wheturangi Rd in Greenlane have listed the character bungalow this week for sale as an "urgent auction" with a $1 reserve.

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While it's unlikely the house will sell for such a minuscule sum, it demonstrates the lengths owners of leasehold properties are prepared to go in order to off-load houses which come with hefty ground rents.

The lease is owned by Cornwall Park Trust Board, which made headlines for taking another leasehold property owner at nearby Maungakiekie Ave to court for $170,000 back rent after she walked away from the house when her annual rent increased from $8300 to $73,750 in 2010.

The Wheturangi Rd listing says the owners insist they will sell the leasehold property for just $1 "if no one offers more".

"Lovely house, great location and top schools for so little deposit compared with millions for freehold. Excellent business sense too - frees up equity for investment elsewhere with superior returns," the listing said.

Barfoot & Thompson agent Tony Keegan told the Herald leasehold arrangements suited some buyers "perfectly" but were challenging for others.

"It's a magnificent way of getting into a good location, good street and good house ... which they would otherwise not be able to afford," Keegan said.

Figures provided by Data Insight and the Real Estate Institute of New Zealand show leasehold properties sell for half as much as freehold properties in Auckland (median $340,000 vs $665,000).

A search on Trade Me reveals 465 listings for leasehold properties - about half of them in Auckland.

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They include a three-bedroom 1980s home in Epsom at 288A Manukau Rd. It has a CV of $790,000 but an asking price of $295,000.

The "golden opportunity" is in the double Grammar zone but incurs an annual ground rent of $16,500 until 2032.

Another is a three-bedroom 1950s Onehunga home at 208 Captain Springs Rd. It's valued at $600,000 but has an asking price of $239,000.

The "wee gem" comes with a double garage and sits on 558sq m of land. It's annual lease of $21,875 was renewed in 2013 for a period of 21 years.

Remax agent Steve Griffin admitted leasehold properties were not for everyone.

"The majority of people don't want to know about it. The last one we had 2000 viewers and we found one buyer."

But their discounted price could provide access to sought-after suburbs with good schools at entry-level prices, he said.

REINZ chief executive Colleen Milne urged buyers to carry out proper due diligence and have lease documents reviewed by lawyers.

While leasehold values did not keep pace with freehold, they provided a way for buyers to "break into the market and purchase in good suburbs", she said.

"Know what your ground lease is and when the next review is, because [buyers] can get into properties with quite a cheap ground rent then find in a couple of years that's all up for review."

Leasehold sales

2014

1233 residential sales

2013

1182 residential sales

2012

1095 residential sales

2009

1137 residential sales

2004

2165 residential sales

- supplied by Corelogic