– A block of nine rental units in Avondale sold for $3.3m, nearly $1m above the 2015 purchase price.
– New owners plan to build 42 apartments but will hold the units, earning $180,000 annually.
– Agent Banson Chong noted strong interest from developers, citing low interest rates and rising market confidence.
A block of nine rental units in Auckland’s Avondale sold under the hammer last month for $3.3 million – almost $1m above what the vendor paid 10 years ago.
Ray White agent Banson Chong told OneRoof that Chinese buyers with New Zealand residency snapped up the 1765sqm property at 316 Blockhouse Bay Road.
The site, which was sold as a development opportunity, attracted significant interest ahead of last month’s auction, with Chong noting he had buyers champing at the bit for ready-to-go central city development sites.
The property, which comprises nine rental units, was bought by the vendor 10 years ago for $2.32m. Photo / Supplied
He said the new owners planned to build a block of 42 apartments on the site, but in the meantime would hold onto the units, which bring in around $180,000 a year.
The property is zoned mixed housing urban and has stormwater and wastewater onsite.
The vendor had bought the units in 2015 for $2.32m and had held them as a passive investment, but had decided to sell on approaching retirement.
The new owners already have a portfolio of properties and would look at building when they had the funds, Chong said.
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“Those units all have the Healthy Home Certificate. They are going to do a massive renovation and bring up the yield.”
Chong said there was plenty of interest in the property and the price paid was strong for the area, even though it was below the $3.7m RV.
“The results further reinforce my belief that developers and property investors are returning to the market, hunting for good development projects, especially in central Auckland amid dropping interest rates. Confidence level is building up rapidly.”
A development-ready site on Manukau Road, in Epsom, recently sold for just over $2m. Photo / Supplied
Other potential buyers had missed out at the auction, he said. “I primarily work for developers, and right now they are asking me, ‘Banson, do you have any subdividable land?’
“It seems like everyone thinks it’s the bottom of the property cycle and as long as it’s a good site, especially in central Auckland, they just want to buy.”
Some wanted to landbank, but most aimed to build and were looking for properties with consents.
Chong’s Ray White colleagues recently sold to developers a 713sqm property with resource and building consent on Manukau Road, in Epsom, for around $2.1m.
The buyers plan to build four large duplexes with double internal access garages on the site.
Chong said developers were buying now because interest rates were low and they had teams in place to take over projects. Most believed the market would pick up, betting on further OCR drops this year.
“I’ve been helping a few who have previously focused on south and west Auckland, but we have an oversupply problem in those areas.
“Development properties that are not in the flood zone and have underground services, like storm and wastewater, they are selling like hot cakes.”