A 1950s era, ex-State house out the back of Mt Roskill sold at auction for $1.125 million on Wednesday.
The three bedroom house was on an elevated but south facing site between the Mt Roskill shops and Three Kings and looked towards the South Western Motorway.
It had a rating valuation of $600,000.
The agent who handled the sale, Peter Cashmore of Bayleys' Mt Albert office said it was a "staggering price" and he had no idea it would fetch so much.
However the price does not appear to be an aberration.
On the same day that the Mt Roskill property was sold, Bayleys' Remuera office was auctioning a traditional two bedroom bungalow just up the road from Pak N Save in Mt Albert.
The house was in good condition and although it had been modernised over the years, retained many of its character features.
But it was at the front of a section that faced on to New North Rd, a busy, four lane transport route heading into the city, and it backed on to railway tracks and few doors along was a major intersection with a busy service station on it.
It had the same rating valuation as the Mt Roskill property - $600,000 - but sold for $1.025 million.
The common thread connecting the properties was that they both had relatively large sections with the potential to be subdivided.
The Mt Albert house (pictured below) was on a 749 square metre section, which the agent who handled the sale, Curan Loh, said could potentially have three dwellings on it.
Because the house was in good condition and at the front of its section, it gave developers the opportunity of retaining it and building two new units at the back, or removing it and building three units from scratch.
Loh said all of the people who looked at the property had an eye on its development potential and he didn't have a single family looking to buy it as a family home.
All but one of potential buyers were either Chinese or Indian people, he said.
The Mt Roskill house was on an 868 square metre section which Cashmore said could potentially have two dwellings on it.
He said about half of the potential buyers were developers, a quarter were investors and the remainder were first home buyers, but the latter quickly lost interest when they realised it was beyond their means.
It was likely that the existing house would be demolished and two new townhouses built on the site.
That would mean the developer who bought it would have paid the equivalent of $562,500 each for two sections of around 434 square metres, before adding the costs of subdividing and before a sod was turned or a nail banged in.
According to QV.co.nz, the Mt Albert property was previously purchased for $335,000 in 2002 and the Mt Roskill property was previously purchased for $53,500 in 1984.
----------------------------------------------------------------------------------------------------------------------------------------
Our new free Property email newsletter brings you all the stories about residential and commercial property and the forces that move these huge markets. Sign up here.
To subscribe to our Property newsletter, enter your email address here. It's free.
----------------------------------------------------------------------------------------------------------------------------------------
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.