- Long-term investors and developers are aggressively competing for central Auckland properties due to an oversupply of terrace homes.
- Banson Chong from Ray White Remuera noted fierce competition, with several unconditional buyers missing out.
- Developers are shifting focus from outer suburbs to central areas, where standalone homes are in demand.
Long-term investors and developers have been going hammer and tongs for central Auckland properties, an agent has told OneRoof, citing the oversupply of new terrace homes and townhouses as a reason for the surge.
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Competition for investment and development properties in the likes of Remuera, Meadowbank and Mount Eden is so fierce that large numbers of unconditional buyers are missing out, says Banson Chong, who is heading Ray White Remuera’s new projects division.
Chong pointed to the sales of two recent listings, one a seven-unit block on Calgary Street, in Mount Eden, the other a four-unit block on Cruickshank Crescent, in Meadowbank. Competition for the properties had been “very aggressive”, with investors emerging victorious in both cases.
A bock of units on Calgary Street, in Mount Eden, got $2.75m in December. Photo / Supplied
Calgary Street fetched $2.75 million in December in a deadline sale, while Cruickshank Crescent was snapped up at auction last month for $1.95m.
There had been seven bidders for the Cruickshank Crescent property, meaning six unconditional bidders missed out, he said.
Another Ray White auction saw a single-level home on Grand Drive, in Remuera, sell for $2.71m after receiving a pre-auction offer of $2.3m. The house was on a 756sqm site zoned for development. Another Remuera property, on McFarland Street, sold under the hammer for $2.3m, $210,000 above the pre-auction offer after only 15 days on the market. The four-bedroom house needed significant work, but the buyer, a South Auckland developer, wanted the land, which was zoned mixed housing urban.
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Developers coming in from the cold was a trend, Chong told OneRoof. “What I’m observing right now is every single developer wants a share of central Auckland, because right now the profit margin in the [outer] suburbs is really low; they’re not selling.”
Developers were pulling out of the city's western and southern suburbs, Chong said, noting that there was a glut of townhouses in these spots. “If you own a house in South or West Auckland, you'll find it very hard to sell unless you are willing to chop up the price by a lot.”
The market was rosier for standalone new homes in Auckland's central suburbs. “On Grand Drive, I’ve got four or five projects coming up, all freestanding houses, about 150 to 160sqm in size, with four bedrooms,” he said.
Completed houses on Grand Drive had been snapped up by young professionals, including an architect, a real estate agent, an accountant and an IT worker.
Ray White agent Banson Chong is selling new-builds at The Vines, in Swanson. Photo / Supplied
Buyers liked that the homes were zoned for the well-regarded Meadowbank Primary and Remuera Intermediate, and they saw the location as a stepping stone into the neighbouring double grammar school zone.
Chong said the one exception out west was The Vines, a quality development of around 250 homes by Gemscott in Swanson, which he is selling.
Two bulk transactions, of 10 and 17 homes, had gone to investors before Christmas, but the majority of the homes were going to owner-occupiers, many of whom were first-time buyers.
Homes were offered with sweeteners, such as cash rebates and discounts, with the community-oriented developer paying the mortgage interest for the first 12 months on some properties, Chong said.
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