Couple ecstatic after sale of large property in “entry-level” West Auckland - exactly what developers want.
The elderly owners of a dated three-bedroom bungalow in "affordable" West Auckland were left stunned after it sold under the hammer just shy of $1 million - twice its CV.
The agent who handled the sale - to buyers who have now returned to China - says the price demonstrates the fierce competition among investors and developers for Auckland properties with large, subdividable sections.
Barfoot & Thompson agent Melvin Plaisier also warned the traditional quarter-acre first home dream was no longer realistic, even in Henderson which is considered a prime target area for entry-level buyers.
"It's an area where first-home buyers are looking but they would quickly be priced out of the market if they're looking to buy a three-bedroom house on a bigger site like a quarter-acre.
"Anything with development potential will be quickly beaten by investors or developers."
The bungalow at 26 Pinedale Place has been owned by the elderly vendors since it was built in the 1960s. The husband is now in his 80s and the couple have decided to downsize.
The solidly built timber house had a "dated" interior but sits on 1138sq m of flat land. Mr Plaisier said current rules allowed subdivision into two lots, but three lots might be possible under the draft Unitary Plan, making it especially attractive to investor-developers with deep pockets.
"We wouldn't have got the sale price if it was on a 500 or 600sq m section," he said.
The property was marketed for just over a week as the auction was brought forward, selling under the hammer on May 14 for $985,000. It had a 2014 CV of $495,000, $440,000 of which was land value.
Mr Plaisier said the vendors were "ecstatic to say the least" with the price, which gave them more flexibility in choosing their new home. Before the auction he estimated it would sell in the high $700,000s or low $800,000s, though "even that was a little optimistic", he admitted.
The eventual sale price reflected the cut-throat market and shortage of listings in the area, especially for properties with large sections.
Mr Plaisier said most first-home buyers had a budget of up to $550,000 - the Auckland price threshold for the Government's KiwiSaver home grant scheme. The market for these lower-priced homes was "very competitive".
Entry-level buyers needed to be realistic about what they could afford and focus on smaller houses or units on smaller sections.
"It's about being sensible about what they can afford and focusing their energy on the right properties."
The Henderson sale follows that of a two-bedroom flat in Mt Albert this month for $797,000 - 77 per cent above its CV - and Barfoot & Thompson figures for April showing Auckland house prices surged by nearly $1000 a day.
The average Auckland home is valued at more than $800,000, according to QV. Some commentators forecast it could hit $1 million late next year.
26 Pinedale Pl, Henderson
• Three-bedroom 1960s timber bungalow on 1138sq m of flat land.
• CV of $495,000 but sold under the hammer for $985,000.
• Property may be subdividable into three lots under draft Unitary Plan.
• Agent says first home quarter-acre dream no longer realistic as developers snap up big sections in "affordable" West Auckland.