A simple two-bedroom brick home in the central Auckland suburb of Point Chevalier has sold for more than double its capital value (CV), with the property now set to be demolished by a developer to make way for new builds.
Its former owners were shocked when the Point Chevalier property sold for a staggering $4.29 million.
According to its listing on Barfoot & Thompson, the home had been owned by the same family for more than 80 years since it was first built in 1940, with the recent sale marking its first time on the property market.
Real estate agent Jason Tsang told the NZ Herald 21 bidders attended the auction last weekend, the majority of whom were property developers.
Sub-dividable properties are particularly coveted by Auckland's developers, who have a keen interest in large sections of land that can accommodate new builds.
The two-bedroom, one-bathroom home, situated on a flat 890sq m plot on Point Chevalier Rd, had a CV of $2.075 million. Tsang told the Herald it was the largest over-CV sale he had facilitated.
Loan Market mortgage broker, Bruce Patten, told the Herald the high-density property means its new owner now has the option of building three storeys high, or at a maximum of 11 metres.
A developer shelling out $4.3 million for a property would be required to pay an additional $300,000 to subdivide - meaning each section of the Point Chev property already has a price tag of around $1.5 million.
"The home is a lovely 2 bedroom character brick and tile house, built-in 1940 you can be assured of solid construction. The interior is due for an upgrade, which presents you with the opportunity to renovate and extend to create your dream home. The huge section provides space for outdoor living, a pool, veggie garden, and ample space for the pets and kids to run around. There is plenty of room for a game of backyard cricket," the listing reads.
"Purchase this property with the confidence you are future-proofing your investment. You may decide now or down the track to build additional dwellings, or even remove the existing house and redevelop the entire site. Sea and city views available when you build up."
The final sale price for the Point Chevalier property went above and beyond the sellers' expectations, Tsang said.
The developer is now looking to bulldoze the brick home and construct two to three new builds.
House prices nationwide continue to be fuelled by incredibly low-interest rates and a shortage of available properties. Low housing stock has been blamed for ongoing increases in the average asking price as the nationwide figure edges towards $900,000.
In a report released by realestate.co.nz on Monday, the national average asking price hit $893,794 in July - up from $875,917 (1.8 percent) in June. Auckland's average asking price was $1,177,528 (up 1.2 percent), coming in second to Central Otago/Lakes at $1,210,233 (up 21.1 percent).
Over the July month, 12,684 properties remained on the market - the lowest number in 14 years and 34.8 percent below the same time last year.
According to the latest OneRoof Property Report, just 16 percent of Auckland's suburbs have median property values of less than $1 million. In the year since lockdown came to an end, house prices in many suburbs across the Super City have accelerated by more than 40 percent.
According to the OneRoof interactive tool, properties in Point Chevalier have a median value of $1.99 million - an increase of 37.2 percent in the last 12 months.
A local home achieved the highest settled sale in the last 12 months after going under the hammer for $4.6 million.
Meanwhile, properties in the neighbouring suburbs of Waterview, Mount Albert and Avondale have median values of $1.17 million, $1.47 million and $1.13 million respectively.
The most expensive place to buy a house in New Zealand is no longer Queenstown Lakes, but Auckland's North Shore, where the median property value is $1.308 million - up 24 percent, or $253,000, on the same period last year.
Next is Auckland City (up 24 percent, or $239,000, to $1.234 million), followed by Auckland;s Rodney region (up 24 percent, or $224,000, to $1.154 million); Queenstown Lakes (up just 9 percent, or $88,000, to $1.108 million); Auckland’s Manukau (up 27 percent, or $220,000, to $1.05 million); and Wellington City (up 27 percent, or $215,000, to $1.025 million).