Mortgagee sale achieves 7% yield

A Weymouth house in need of TLC gets plenty of bids at mortgagee auction

Property

A Weymouth house in need of TLC gets plenty of bids at mortgagee auction

17th Sep 14, 11:53am by Greg Ninness

This house in Weymouth sold at mortgagee auction for $295,000.

Just a single property was offered for sale at the latest mortgagee auction held by Barfoot & Thompson, with the auction of another postponed until next week and a third scheduled for auction withdrawn from sale.

Its location in investor friendly Weymouth in south Auckland meant there was no shortage of bidders for the three bedroom house with garage (pictured) at 3/31 Taitimu Drive that was put up for mortgagee sale by Westpac.

The fact that it would benefit from a spruce up didn't deter potential buyers and after some determined bidding it eventually sold under the hammer for $295,000.

According to QV.co.nz it was previously sold in July last year for $290,000.

MBIE's bond centre data shows that the average rent for a three bedroom house in Weymouth is $395 a week.

If the house that sold was rented for that amount it would provide its new owner with a gross rental yield of 7%.

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8 Comments

by Crazy Horse | 17th Sep 14, 1:13pm 1410916400

With all due respect Mr Ninness, if a 7% gross return is great, Auckland PI's have been brain washed by the media and banks into thinking that even 4% is a good return.

Where I am, I get 16% ...now that is a good return and worthwhile.

Just goes to show the real return in Auckland is in the capital gains ..... and best of luck with that from this point on.....

by Crazy Horse | 18th Sep 14, 7:58am 1410983882

Sorry not Auckland ....USA

by Jamin | 18th Sep 14, 2:19pm 1411006764

Which State?

by Crazy Horse | 18th Sep 14, 3:48pm 1411012081

"The Old Line State" ....Maryland (close to DC)

by Greg Ninness | 17th Sep 14, 1:29pm 1410917383

I didn't say the yield was great, or otherwise. I just said what it was. I leave it to readers to make up their own minds about how attractive that might be to them.

by Steptoe | 18th Sep 14, 8:15am 1410984913

Complete lack of understanding of that local market

To get a reasonable return that house would need around $30 to 45K spent on it.. .....something that has been going on intensly in the Weymouth/ Manurewa area for the last 10yrs.

Take the time out to go over all house sales for that period and the resale, and the period between purchase and resale.Already we are now seeing 3rd sales in that period with 2nd renivations.

You will also find that aprox 50% of sales are renovations and resale.

Not knowing what is hapening in a market at ground level.. ie not from behind a office desk gives avery different appearance as to what is happening in the market.

Will give 1 example not far from that place sold in April 13 $296K, resold last month $368K after a renonovation, which then gives a reasonable return as a rental

by Snodgrass Thro… | 18th Sep 14, 8:25am 1410985526

That's a good point Steptoe. Around us it seems every property sold has $100k plus spent on it within the first year of the new ownership. If renovations were taken into account on property inflation figures it would look a lot less like a runaway boom.

by Steptoe | 18th Sep 14, 8:41am 1410986506

Also this has a huge effect on the rents... and the social make up of the local communities

Another thing thats also happening is where a garge is converted to a new 2 bedroom unit on the same section...I dont know how this effects the rent stats .. if both units are combined with the same property or not...

What we are seeing in these cases are even larger mark ups in short periods for a given property, way over the $120K in the 30% to 50% increase in propery valve in 12 months

Now huge increases like that sure do screw the desktop stats credubity.. and affordabilty stats.