Spacious apartment with a car park and harbour views sells for $65k, CBD office suite fetches $35k

Property

Bargain basement prices for meth contaminated apartment and teeny weeny office suite at Auckland CBD auction

3rd Oct 20, 7:08am by Greg Ninness

A large apartment in Auckland's CBD that had been used to manufacture methamphetamine (also referred to as P) has sold at auction for $65,000.

The apartment is unusually spacious for inner city apartments, with a floor area of 90 square metres.

It's a modern unit located above a shop across the road from the container terminal on Quay Street. It has two bedrooms, two bathrooms and a car park, but didn't have a happy sales history.

It's a leasehold unit and according to PropertyValue.co.nz, had originally been purchased for $275,000 in 2006, resold for $120,000 in 2009, and resold again in 2012 for $90,000.

When it was offered at auction by Ray White City Apartments on October 1, with a warning that the property had unresolved methamphetamine contamination issues, it had a declared reserve of $26,000, which means the reserve price was disclosed to potential bidders during the marketing process.

There were several potential buyers for the property and bidding was surprisingly competitive, opening at the $26,000 reserve and proceeding in small increments until it sold under the hammer for $65,000.

It was not the only lot to go for a bargain basement price at the same auction.

A tiny 14 square metre, leasehold office unit on the ground floor of the Vibe apartment complex at Viaduct Harbour was sold for $35,000 plus GST (see photo below).

But buyers weren't so keen on a 38 square metre, freehold apartment in the Metro building on Wakefield Street.

According to PropertyValue.co.nz the property had a rating valuation of $360,000 and was last sold in September 2009 for $152,000.

But the building has what were described as major remediation issues, and its marketing material said the owner was willing to meet the market.

However there was only one bid on the property and that was for $5000 and it was passed in.

Details of all of the properties offered at the auctions monitored by interest.co.nz and the results achieved, are available on our Residential Auction Results page.

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29 Comments

by Luke83 | 3rd Oct 20, 7:30am 1601663418

Just the beginning for these price drops, 6 months time we will see the true picture

by taimaiakka0 | 3rd Oct 20, 7:52am 1601664736

You may see fall in near future but do not think this is indicator.

by b21 | 3rd Oct 20, 11:25am 1601677500

Perhaps not a trend indicator but this didn't use to happen so an indicator of change nonetheless.

by taimaiakka0 | 3rd Oct 20, 7:50am 1601664622

Housing marketa has been strong so far and now is in territory can go anywhere - can correct, can stabilize or go up even higher from heights that is already in and pros n cons by one youtuber :

https://youtu.be/3_wYMd6QwfA

by CJ099 | 3rd Oct 20, 7:59am 1601665150

"A large apartment in Auckland's CBD that had been used to manufacture methamphetamine (also referred to as P) has sold at auction for $65,000." Wow talk about brazen, so it's no longer just properties in run down areas that are taken advantage of by drug dealers. Makes you wonder what effect that it would have on the neighboring apartments, both in terms of risk to the health to tenants but also the impact on their property/rent values too.

by printer8 | 3rd Oct 20, 10:30am 1601674259

CJ099
Probably rented not owned so a hit for the landlord - property investment not always a winner.
Note that apartments are better proposition for P manufacturing - tend to be more private in terms of coming and going, observation and interaction with neighbours.

by Due Diligence | 3rd Oct 20, 8:18am 1601666338

I think the meth apartment was super cheap because over the past 5-10 years people have started to realise that a leasehold is really just a rental. The meth obviously did make it notably cheaper though.

As an aside, anyone that thinks the people of NZ will allow the likes of TOP to turn every home NZ into a leasehold property with their insane tax regime is having a laugh.

by stuart786786 | 3rd Oct 20, 8:51am 1601668302

Not wealth tax but CGT is required to have fair tax system. If someone earning even a $1 is taxed how come millions in House speculation is allowed to escape tax. With the exception of family home, should have CGT and argument is that may harm farmers, businesses but than charge any tax and will not go down well with people paying (specially when have been enjoying tax fee profit till mow) or can have some exception like farmers.... BUT in housing market speculators should be taxed AND also those arguing that we already have BLT in place for tax than why reluctant and fear with the word CGT, if it is same as BLT - It indicates that BLT is a toothless tax.

Another option for Now as unfortunately this year too JA is coming to power and has done a U turn on CGT (Proving politicans are chamelions and that too thick skin) as now she too is a part of the elite club otherwise why U turn when even the tax working committee created for the very purposed advised (argument that many resisted but than was it not accepted).

Yeah if have intent why not have a declaration form signed by seller/vendor declaring any other property that they may hold either individually, jointly or by trust JUST like buyers have to sign a OIO form while buying a house.

by CJ099 | 3rd Oct 20, 8:49am 1601668153

Yes totally agree with you Stuart.

by bw | 3rd Oct 20, 9:09am 1601669382

With one disagreement - the sacrosanct Family Home should be Capital Gains taxed as well. because:
(1) ANY exemption to the rules will be 'maximised' by a good accountant etc
(2) If property prices stay stable, or God Forbid - fall, then tax on a $1,000,000 home sold 10 years later for =$1,000,000 is - $0
(3) Income is Income is Income.

by richard1965 | 3rd Oct 20, 9:07am 1601669248

Stuart the only economy in NZ is Housing economy so the government will give all stimulus and support to not only support it but also to maintain continuation of the ponzi as they too know if want to help FHB , only way is for price to correct.

Government is for borrowers/speculators and not savers/deposit holders and this can be confirmed as Government has been pro active and done everything to support borrowers but nothing to protect depositers.

by Due Diligence | 3rd Oct 20, 9:19am 1601669943

What you've described is totally reasonable in comparison to the insanity that TOP is proposing. CGT on realised gains is totally different to the government essentially charging landowners rent for their own property.

A logical argument can be made for CGT - it is essentially just income tax. The NZ public don't support it though, and neither do I. "lock-in effect" would be a problem, so rollover allowance would need to be made. And if you exempt the family home investment will be directed into desperately needed rentals. And if you apply it to houses, you need apply it to everything - shares etc.

There is unlikely to ever be CGT in NZ and essentially no chance of a LVT ever.

by b21 | 3rd Oct 20, 11:27am 1601677650

As a matter of fact current high prices are already a leasehold if you want to see it that way, in this case it is paid for about 30 years to banks on top of the fair property price.

by Due Diligence | 3rd Oct 20, 12:12pm 1601680350

Factually incorrect. Firstly, not all houses are on mortgages. Secondly, leasehold payments are in perpetuity, mortgage repayments aren’t. Thirdly, mortgage repayments are linked to the value of the loan, not the value of the land.

by b21 | 3rd Oct 20, 1:10pm 1601683848

My point is that is a premium to be paid to the asset owner, I guess you may understand what you wish. Not supporting leasehold though, in my opinion they should be banned similar to what was done years ago in the UK.

by Fritz | 3rd Oct 20, 8:44am 1601667877

That unit opposite the port will have more than just meth issues. Along with being leasehold, it will get lots of noise, and that complex could be a leaker too.
One of the worst properties in town!

by iconoclast | 3rd Oct 20, 9:14am 1601669687

Doan-choo wurri
The smart money will be looking to the future - picture the wonderful view when the port has gone - buy now

by iconoclast | 3rd Oct 20, 10:08am 1601672895

Depressing
Trawled through the first 250 latest auction results (first 5 pages)
A lot passed in
The eyes have been picked out of this market
In-fill properties going for around the $1 million mark (or slightly less)
More than half the offerings were in-fill properties
Anything that is not in-fill with full section and not a recent build you will pay up to $2 million
Anything that has development potential $3 million
One old villa in Greenlane 1566 sqm $5,750,000 land value only
That's $3,671 per sqm of land

by Carlos67 | 3rd Oct 20, 9:58am 1601672282

I finally had to give in and change my view on the property market direction. Quality houses in half way decent areas are always going to go up in price its just the way it is. We have created this market due to several factors, not the least of which we built crap quality houses for decades and it gutted the market leading to a low number of quality houses. There may be a short term dip in prices but I think it will be short lived. Decent houses will simply be bought and "Held" and ride out any short term house price reductions. Any dip I think will end up being recovered in the same year, the only way is up. Prices going up right now just defies all logic but like they say if you cannot beat em join em.

by Fritz | 3rd Oct 20, 11:15am 1601676944

I basically agree and that's why I bought last year.
However, I wouldn't write off the possibility of a correction in the next few years. But if you have a good deposit then yeah might as well join in on the silliness.
I must say, it's bloody nice not being beholden to a landlord.

by b21 | 3rd Oct 20, 11:30am 1601677820

Get ready to change your mind again, you didn't understand the current economic trend cannot push prices higher forever, and specially in what you call half-way decent areas where prices are over inflated way over the residents can afford prices will have to go down big time.

by printer8 | 3rd Oct 20, 1:24pm 1601684655

b21 baseless scaremongering again.
Fritz is correct. He has a house - its a home. He is enjoying the intrinsic value of home ownership - something you are seemingly possibly not aware of.
There is a key but very simple basic point that you seem continually unable to get your head around and need to understand.
Fluctuations in the market - and there is good possibly of periods of the market being relatively flat for a number of years such as in the recent Auckland past, and some short term corrections even for some years - but these in themselves are totally irrelevant to those who own homes and investment properties.
The key thing for home owners - and investors - is being able to service the mortgage. Provided they can do this - and especially if they have income and job security - there is really no fear.
I probably need to repeat this for you: The important factor for home owners and investors is not fluctuations in the house market - same home or same rent income - but rather fluctuations in mortgage interest rates.
Even then, banks apply a 7% stress test - and such levels are which is seeming a long time off - and home owners should be prudent and pay down the mortgage to minimize risk not only from interest rate changes but as personal shocks.
At the moment, things are looking really positive for mortgage holders; RBNZ announced FLP specifically intended to reduce household lending costs and this could possibly be as early as November, and even the possibility of further OCR cut from March next year.
There is need for DGM to implant this their brains: "If house prices significantly correct in the short term, whether you think right or wrong, it is RBNZ view that house prices are significant in maintaining economic stability and consequently will use FLP or OCR cuts which will result in lower interest rates for homeowners'.
So b21, get over your scaremongering. Those who currently own homes are not affected by market fluctuations - the critical factor to them is servicing the mortgage and for that they have passed a 7% stress test, the outlook for the short term is lower mortgage interest rates, and they can be prudent to take action to minimize that risk.

by al123 | 3rd Oct 20, 7:45pm 1601707526

Did a comment get edited or something? Because as far as I can see, b21 did not say anything to suggest that home ownership doesn't have intrinsic value, or about whether and to whom fluctuations matter, whether the banks are being sufficiently cautious, or whether people should be scared or not.

All s/he did was suggest that prices are likely to fall - can you not even suggest this now without getting a lecture and a scolding from the spruikers?

by printer8 | 3rd Oct 20, 8:15pm 1601709314

al123
Pretty simple
Both Carlos and Fritz have recently bought homes.
b21 comes in and posts they will be changing their mind because as he posts regularly due to the impending property crash.
Come on, surely I don’t have to explain to you why fluctuations are both irrelevant to home owners and that my response is relevant to b21’s assertion of impending doom for home owners.

by al123 | 3rd Oct 20, 8:41pm 1601710913

P8, you misread the post. B21 wasn't replying to Fritz. Surely you don't need it explained to you how comment threads work? And he didn't say that Carlos would change his mind about buying a home, but about the direction of prices. He also didn't assert impending doom for home owners. And I didn't say anything about fluctuations being relevant or not to home owners. I understand that argument very well thanks - trying to imply that something I said shows I didn't is an obvious cheap shot.

by printer8 | 3rd Oct 20, 8:48pm 1601711285

al
Enjoy the rest of your weekend.
Cheers

by al123 | 3rd Oct 20, 9:01pm 1601712090

Thanks for the apology!

by Carlos67 | 3rd Oct 20, 11:07pm 1601719660

Unfortunately house prices are no longer linked to wages. Those people already on the ladder can afford to sell and upgrade, those that cannot will be renting from the property speculators and the rich who continue to get richer. The divide is society is opening up and its only getting worse. If Covid-19 did not smash house prices then nothing will. Take a look around you, nothing makes sense anymore, everything is upside down and doing totally the opposite of what you expect it to be doing. Yeah I will change my mind again if the property market falls over but I'm not holding my breathe and just getting on with life.

by karl seastrand | 4th Oct 20, 12:19pm 1601767169

IF income to price ratio reaches 15 and things remain buoyant I will also change my mind.