– First-time buyers are targeting Ōtara as house prices drop from their peak of nearly $1m.
– Agents report increased listings, with many homes being three-bedroom, one-bathroom weatherboard properties.
– Developers have pulled back due to Watercare’s restrictions, leaving opportunities for flippers and investors.
First-time buyers are targeting homes in Ōtara, as house prices in the South Auckland suburb continue to tumble from their peak of almost $1 million three years ago.
Agents told OneRoof that Ōtara – famous as the home of OMC and their 90s global hit How Bizarre – was the city’s cheapest spot for houses on full sites, although not all buyers in the suburb were looking to live there.
Harcourts New Age agent Gabriel Elkhishin said that the number of homes for sale in Ōtara had doubled in the 12 months, but much of the stock looked the same.
“They are three-bed, one-bath weatherboard properties, so the point of difference just isn’t there,” he said.
Elkhishin said the supply of these tired homes was outweighing demand. Kāinga Ora’s decision to sell off a large number of state homes had exacerbated the problem.
At the time of writing, there were 39 Ōtara listings on OneRoof, a fifth of which were being sold off by the state housing agency.
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At the peak of the market, similar-looking properties on flat sites in the suburb were selling to developers for $1m and above.
However, developer activity in the suburb has all but dried up, especially since Watercare announced that no new builds in the area would be able to hook up to its water and wastewater networks for the next 10 years at least.
Elkhishin said the only purchasers left in the suburb were flippers (if they could make the numbers stack up), investors, and first-time buyers.
A three-bedroom, one-bathroom state house on Williams Crescent is inviting enquiries over $645,000. Photo / Supplied
A three-bedroom, one-bathroom brick and tile home at 15 Julian Place is one of more than 30 homes for sale in the suburb. Photo / Supplied
He said the types of homes on offer made a lot of sense to first-time buyers who wanted “something with a bit of freehold yard space for the dog and kids”.
He said buyers could pick up a three-bedroom, one-bathroom house on a 600sqm site close to the motorway for around $645,000. One such home is 34 Williams Crescent, which his colleague Ricky Balu is selling on behalf of Kāinga Ora.
“In all honesty, this is the lowest I’ve seen them since before Covid. You can get a lot more land for your money, and a lot of it is under $1000 per sqm. You are getting the cheapest full sites in South Auckland right now.”
Ray White agent Alex Dunn agreed there were good buying opportunities in Ōtara right now. He just sold a three-bedroom, one-bathroom weatherboard home on Carey Place for $655,000 and another on Angus Street for $675,000. Both homes were snapped up by first-time buyers for under RV.
Dunn, who has a brick and tile home for sale at 15 Julian Place, said buyers liked the fact that the suburb was close to the motorway and was affordable.
A seven-bedroom, four-bathroom home built five years ago on Caserta Place is up for grabs. Photo / Supplied
The owners of 6 Lawrence Place have slashed the price of their three-bedroom home so they can enjoy their retirement in Rarotonga. Photo / Supplied
“People are able to come in at a reasonable level – that mid $600,000s level – and get a freehold property on a decent piece of land and chip away at the renovation.”
Most of the ex-state houses on offer were made from brick or solid weatherboard, and while tired, were in a liveable condition.
He noted that some parts of Ōtara were more desirable than others, highlighting the streets close to Flat Bush School and Preston Road.
Newer homes, the result of the developer pile-in immediately after Covid, are also finding their way to market. Barfoot & Thompson agent Parry Singla has listed a near-new seven-bedroom home at 6A Caserta Place, which a developer built after purchasing the large site and moving the original home to the rear.
He said it was probably one of the largest homes in Ōtara and had been built to a high spec because it was the builder’s own home.
The agent said Ōtara was a tough market to sell in at the moment, and like all of South Auckland, townhouses were generally the hardest to shift.
Singla said freestanding homes with nice interiors and the sharpest price were the easiest ones to sell. “It’s a price war. Who is giving the cheapest price?”
Singla said Ōtara still attracted a lot of investors. Some of the first-time buyers who bought in the suburb just to get on the property ladder preferred not to live there, choosing to put tenants in their purchases while they rented elsewhere.
Ray White Manukau co-owner Tom Rawson said the drop in property values in Ōtara meant some owners – including those who bought at the height of the market – were now stuck.
“Ōtara has dropped heaps in the last year. We’ve got people stuck with property they can’t get their money back on.”
Rawson said that the quick gains South Auckland had enjoyed before the slump were unlikely to return, but those who bought and held would probably still do well. “People want quick money now, but property has always been a long-term gain,” he said.
“The whole ‘buy a property and sell it in a year’s time and make money on it’ has probably gone. But if you are buying with a 10- or 20-year plan, which is how all of our parents bought property, you are still probably going to double your money.”
Rawson said Ōtara was a good option for people who are looking for long-term investments. “Rental-wise, there is good demand. It’s still a great area. Its proximity to everything is awesome. It’s not in the news like it used to be for undesirable activity.”
Rawson’s agents are selling a three-bedroom, one-bathroom home at 7 Williams Crescent, which has an RV of $670,000, and a three-bedroom, one-bathroom home at 6 Lawrence Place, which has dropped in price to $629,000.
Listing agent Nelson Takle, who is marketing both, has pitched the former at “value hunters” and “savvy investors”, noting that it has a rental appraisal of $700 a week. Regarding the latter, he says: “The owners’ instructions couldn’t be clearer: this must be sold as they’re moving overseas.”