Just two years after the first residents moved into Paerata Rise, the new development on the southern fringes of Auckland, homes there are already enjoying good capital growth – jumping at least $200,000 in price when they re-sell.
At a Barfoot & Thompson auction last week, a four-bedroom house completed just last year on Lauti Lane sold for $1.23 million.
Agent Jass Singh, who marketed the property, says there was huge interest in the year-old house in the new development, with over 35 groups of buyers at open homes.
“People compared what’s available for home and land packages, this is easy because they don’t want to wait for the build. They love to be [in] the new community,” he says of the 178sqm home a block away from Jonah Lomu Drive, named after the college's most famous old boy.
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Singh says that buyers, both downsizers and first-home, had previously looked at homes in Karaka Lakes, 10 minutes north, but were drawn to the promised amenities of this newer development. A new school has opened, sports and community centres and a train station are coming, and he says buyers like the slate of approved quality home builders.
Shaun Millar, who heads sales and marketing for the Wesley College Trust developers, Grafton Downs, says that just 10 of the 350 properties sold in the development have come back to the market, including several builders’ own show homes.
The new-build Paerata Rise home in South Auckland attracted over 35 groups at open homes. Photo / Supplied
“Seventy per cent of those sales are to residents already living here who are upgrading, only three went to new people. The market is crazy, there’s so much demand we’ve released stage seven land already. The tender closes in September and every single one of the 68 sections will sell out.”
Millar says that with new sections going for around $480,000 and a three-bedroom house costing around $550,000 to $600,000 to build, that means that new homes now start at over $1.1m. A year ago, when Lauti Lane was built, those homes were selling for under $1m, he estimates.
“I’m absolutely not surprised at the re-sale prices of over $1.2m now.”
Buyers were attracted by not having to wait for building to be completed on the four bedroom home on a 512sqm section. Photo / Supplied
James Wilson, Valocity’s head of valuation, says that in the current market, resales are already showing good levels of capital growth, with Paerata's median value up 25% on last year to $1.142m and a top sale in the township this year of $1.9m.
“Planned communities like Paerata Rise were pretty popular when they first came to market, so now people are prepared to pay for the benefit of moving into a finished product rather than waiting for something to be built. That it happens so quickly is a sign of the market right now.
“People gravitate to master-planned communities, where density is done well and it hits the right price point. At Karaka Lakes, you’re looking at more like $1.5m.
“All the proposed new development at Drury will be a poster-child for a genuine master-planned new city, and people are willing to get in early, like they did at Stonefields 10 or 20 years ago,” Wilson says.
