South Auckland’s market for “dime-a-dozen” townhouses is feeling the squeeze, with developers forced to sell at the lowest price just to get a sale in a swamped market, agents say.
Ray White AT Realty co-owner Tom Rawson told OneRoof that the supply of townhouses in his patch exceeded demand by a long way.
He said infill properties, the result of changes to the city’s unitary plan almost a decade ago, were hard to sell at the moment unless developers took drastic measures like selling them in a $1 auction or selling them cheaper than anyone else.
Buyers were able to play developers against each other to get a good price.
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“People are buying a property conditionally and then using that property as an option to purchase. They are then looking at the other properties because there are so many of them around and going, ‘That’s not too dissimilar to that one; if we can get that one cheaper, then we will let our existing contract fall due to finance’. So, dime-a-dozen townhouses are very hard to sell unless they are the cheapest on the market.”
Harcourts New Age agent Harsh Kathuria agreed. “Townhouses or duplexes, those are the properties that are struggling,” he said.
Barfoot & Thompson agent Donald Gupta says developers are listening to buyers and building more spacious properties like this home on Peverill Crescent with high-end fixtures and fittings. Photo / Supplied
He recently sold a standalone new-build on Massey Road, in Māngere, for $625,000 at a $1 reserve auction because the developer was desperate to sell before the lender stepped in. Two others sold a few minutes later at the same auction after buyers turned up to get a bargain.
Large sections were also a hard sell. “Full sites are struggling to sell because developers are not touching anything with a 10-foot pole. They are being cautious because they do not know what the other end of the transaction looks like. How long is it going to be harder? No one knows.”
Barfoot & Thompson agent Donald Gupta said developers who had been “hurt badly” in the last 18 months were now starting to listen to buyers. “If the houses are good and done properly, they’ll sell,” he said, explaining that they had to be standalone, have spacious bedrooms and bathrooms and upmarket fixtures and fittings and an outdoor area.
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Gupta has just sold four standalone new builds in a development of six on Peverill Crescent, in Papatoetoe, all to first-home buyers within six weeks of them being listed.
The prices for the four-bedroom, two-bathroom homes ranged from $850,000 to $930,000 depending on their position in the development. “The price is one thing, but if people like the house, they will pay the price.”
Gupta said demand for development sites in Papatoetoe was firm, but only those that were outside flood zones and free of wastewater or water service constraints.
He was recently involved in the sale of an 878sqm property on Liscombe Road, in the suburb. It fetched $1.536m after about 10 developers fought over it.
Kathuria and Rawson noted that well-maintained brick and tile properties were popular with first-home buyers, with Kathuria selling two such homes, one in Papatoetoe and the other in Clendon Park, to newbies for $735,000 and $745,000, respectively.
A first-home buyer bought a three-bedroom home on a cross-lease section on St George Street, in Papatoetoe, for $735,000 in a competitive auction. Photo / Supplied
Standout homes with realistic vendors such as this four-bedroom family home on Kira Road, sold under the hammer for $1.43m after 13 people bid. Photo / Supplied
Family homes were also selling well, Kathuria said, but only if they were priced sharply. “If you are looking for a kamikaze price, forget about it; this is not your market,” he said.
“I’m telling my sellers – forget about what’s sold, that isn’t relevant anymore. Let’s see what our competition is, what’s on the market right now? That’s staying ahead of the curve, and that’s helping owners make a wise decision that, yes, they might have to make a price adjustment to sell it right now.”
He sold a large four-bedroom, three-bathroom home on Kira Road, in Flat Bush, at auction last month for $1.47m, above its RV of $1.345m, after attracting 13 bidders. It was a “gorgeous” home for the area and drew 80 families to the open homes.
Rawson said good properties were still selling, but vendors couldn’t muck around because buyers still had plenty of choice.
“Sellers need to be wary when they do have someone interested. If they are like, ‘Nah, it’s only my first offer’, it’s like that buyer might have been looking for six months.”
He said how long a buyer had been in the market was extremely relevant because if they had only started looking, then they were unlikely to make an offer compared to someone who had been looking for six months and had done all their homework.
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