A bungalow on a large section in the central Auckland suburb of Greenlane has sold at auction for the knock down price of $195,000.
The house had four bedrooms, two bathrooms and say on an 1120 square metre section.
It had a council rating valuation of $1.83 million and in the current market similar homes might sell for more than $2 million.
However the house that sold for $195,000 was on a leasehold title.
According to QV.co.nz it had been purchased $335,000 in August 2000.
It's latest price reflects the growing caution buyers have towards leasehold properties.
It has become increasingly common for inner city apartments on leasehold titles to be passed in at auctions, and when they do sell it is often at a substantial discount to their previous purchase price.
Buyers appear nervous about the effect that Auckland's rapidly rising property prices will have on the ground rents for leasehold properties at the next rent review.
Ground rents are usually linked to land values and because land values in Auckland have risen so much over the last few years, that could result in huge increases in the ground rents leasehold property owners will have to pay once the ground rents come up for review.
The Greenlane property was one of the more unusual highlights of Harcourts' recent auctions throughout the country.
See below for the results of Harcourts' recent auction throughout Auckland and in the Waikato, Bay of Plenty, Hawkes Bay, Wellington, Christchurch, Blenheim and Invercargill.
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7 Comments
A silly headline as you're paying for the right to pay at least $30'000 pa in ground rent p.a. on top of all the usual expenses. Still a vastly experienced friend of mine is betting against the trend and he is buying leasehold houses up (he may very well have bought this one too)
Looking at the auction results, 17 Mendip Place in Christchurch sold for a song. Sure the place needed renovations to replace the original 1970's decor, but it's of decent size, permanent materials, on solid ground, in a nice and quiet neighborhood, and a great primary school zone.
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