A non-descript house sold under the hammer last week for $700,000 more than its $1.6 million RV in what the agent said was one of the hottest auctions in recent years.
Seventeen developers and one investor registered for the auction of a three-bedroom property on McFarland Street, on the border of Remuera and Meadowbank.
Bidding was intense and kicked off at $1.4m, said Banson Chong, projects manager for Bayleys Remuera. Nine bidders raised their hands over three minutes, with conditional buyers waiting in the wings just in case the property passed in.
“The level of buyer engagement and competition was particularly interesting given the current commentary around market conditions,” he told OneRoof.
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“The successful purchaser is a developer who is currently looking at the potential to build three to four freestanding homes on the [700sqm] site, subject to the usual planning, design and consenting requirements.
“We effectively finished the auction with 17 unsuccessful cash, unconditional buyers, and we also had another 12 conditional buyers who had expressed interest but were not in a position to bid unconditionally on the day.”
Bayleys agent Banson Chong says the auction of the house on McFarland Street, on the edges of Remuera, was intense. Photo / Supplied
Many were still actively looking for their next development opportunity in central Auckland, and particularly in Remuera, Chong said.
“For me, the most significant part was the depth of competition. It was not simply one or two determined buyers pushing the price – there were multiple parties genuinely competing for the property.”
OneRoof records show the property last changed hands 12 years ago for just over $800,000.
What made the property so attractive for developers was the combination of its 700sqm landholding, Mixed Housing Suburban zoning, and that it had both stormwater and wastewater services available on site.
Good development sites in established parts of Remuera were tightly held so when a property combined usable land, appropriate zoning, infrastructure and location, it could attract significant attention, Chong said.
This part of Remuera had proven demand for well-designed new-build homes.
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“It offers buyers the Remuera address and lifestyle at a more accessible price point than within the double grammar zone, while still being close to a number of well-regarded local schools and amenities.
“I have seen that demand firsthand. I previously marketed a new-build development at 84-86 Grand Drive, Remuera, just around the corner, and we had more than 150 buyer groups attend the first VIP viewing day.”
A lot of that buyer pool had been young professionals and families looking for modern, low-maintenance homes in an established central Auckland suburb so developers recognised there were buyers for the right product in the right location.
Some developers were looking to diversify away from areas where new-build stock was taking longer to sell and were instead investigating opportunities in established central Auckland suburbs, and their focus was increasingly selective.
“They are looking carefully at the underlying land, infrastructure, planning potential, construction costs and, most importantly, the depth of the end-buyer market.”
Chong was hesitant to use a single auction to describe the entire Auckland property market, saying different segments were behaving differently, and with an election looming there was uncertainty with some buyers choosing to wait for greater clarity.
“However, what this auction showed me is that serious developers are still prepared to act decisively when the fundamentals of a property make sense.”
Developers could not necessarily put their business on hold for an election because they had construction pipelines, contractors and future projects to plan for.
“For me, the takeaway from 9 McFarland Street is not that every property is suddenly experiencing a hot market.
“It is that quality development sites with the right fundamentals can still create exceptional competition, even in a market where the broader commentary is relatively cautious.”
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