The 2011 capital valuation gave a clue to where the value lay, with $1.14 million assessed as land value in an overall CV of $1.28 million. The house, entirely liveable, shows the truth of economic texts that a home tends to be a depreciating asset sitting on an appreciating one.
How do you price a property like this in an Auckland sellers' market that continues to bubble away? With great difficulty, as most agents will tell you, and auction becomes the logical path to value as high demand collides with light supply.
The number one spot in the long auction list offered a clear sign that agents had plenty of people interested. There's nothing like early robust bidding to set the tone for the session and persuade people that, despite the gloom and tumbling rain outside, all is sunshine and light within.
But even auctioneer Murray Smith seemed a little taken back at the vigour. When he suggested someone might like to start the bidding at $800,000, he was ignored. Instead, a $1 million start bid rattled through the throng of a packed auction room. Then it was all on.
Auctioneers who become frustrated at slow, tedious bidding that can kill the dynamics of the auction room would like to bottle this sort of action. In three or four short minutes, the price zoomed (first in $100,000 rises and then down to $1000 lifts) to a hammer-fall of $2.002 million.
It was an astonishing result, more than $500,000 above reserve and 56 per cent above CV. Imagine that - you go into an auction prepared to accept $1.5 million and end up with a cool half million dollars extra in the pocket. Who needs Lotto?
The Remuera Rd sale didn't quite set the mood of last month's auction, but the rattled, anxious look of agents that dominated days like this not too long ago are well gone. Now it's virtually all smiles, except on the faces of those who miss out.
Of the 56 properties on the schedule, 12 sold before auction and 28 went on the day (four of them within an hour or so of being passed in just short). Eight others were passed in with at least some bidding and most were probably gone by the end of the week. Just eight properties - one of them a leasehold apartment and a couple more of monolithic cladding that raises, often unfairly, the spectre of a leaky home - drew no interest.
While it was another successful auction - covering properties from West Auckland through the central suburbs to Remuera and Meadowbank - there didn't seem to be quite the intensity of three months earlier, with a number of buyers sticking to their limits and some of them winning the prize despite inflated views of value. At least twelve of the 28 lots that sold appeared to go at prices beneath initial reserve, as vendors lowered their sights to get a deal.
As one senior agent noted: "Generally, buyers aren't doing silly things. They know they have to bid strongly, but they are cautious at the same time - deciding what's good value and not going beyond that."
But it is a fact in a seller's market that, while agents generally try to persuade clients to set reserves at reasonable levels, no one surely errs on the low side. When a property comfortably passes its reserve, the price can be considered a very good one.
A cross-section of examples from the Barfoot & Thompson auction:
• 4 Hugh Brown Drive, New Lynn - CV of $320,000 and sold for $526,000 ($26,000 above reserve).
• 114 Peary Rd, Mt Eden - CV of $750,000 and sold for $1.05 million ($80,000 above reserve).
• 1/63 Meadowbank Rd, Meadowbank - CV of $730,000 and sold for $946,000 ($46,000 above reserve).
• 59 Bollard Ave, New Windsor - CV of $450,000 and sold for $695,000 ($15,000 above reserve).
• 22 Takitimu St, Orakei - CV of $850,000 and sold for $1.305 million ($78,000 above reserve).
The trend of the Barfoot & Thompson auction was followed the same evening in a small agency in city-fringe suburban Auckland.
Anne Duncan Real Estate, which centres its operations on Mt Albert, featured 14 properties at its bi-monthly auction. Two sold before auction and just one of the other 12 - an Eden Terrace apartment - didn't find a buyer under thehammer. Best results:
• 14 Bentleigh Ave, New Windsor - CV of $480,000 and sold for $785,000 (about $25,000 above reserve)
• 56 Mount Royal Ave, Mt Albert - CV of $410,000 and sold for $687,000 ($19,000 above reserve).
Again, in a packed auction room the bidding was relatively restrained. Values are certainly still moving and quality homes are drawing premium prices as demand far outweighs supply. But while there is some panic-buying as people frustrated at constantly missing out are pushed higher than may be prudent, no one would call it a frenzy.
