A luxury apartment at Auckland's Viaduct harbour failed to sell at auction today, even though the reserve price was just $195,000.
The two bedroom waterfront apartment in The Quays complex had spectacular views looking over the marina towards the harbour bridge.
But the fact that it was on a leasehold title appeared to deter potential bidders when it was put up for auction by Bayleys Real Estate in their Viaduct Harbour auction room on Wednesday.
According to QV.co.nz the 67 square metre apartment was originally purchased for $338,000 in 2002 and resold for $405,000 in 2007.
However since then prices for leasehold properties have fallen sharply as buyers have become wary of rising ground rents.
In an unusual move, the reserve price of just $195,000 was declared to potential buyers prior to the auction, in the hope that this would generate additional interest.
However when the auctioneer asked for an opening bid of $195,000 at the auction, the room stayed chillingly quiet as potential buyers remained unwilling to meet the stated reserve.
After some encouragement from the auctioneer one brave soul offered $150,000, which was accepted by the auctioneer.
That prompted another bidder to enter the fray which eventually pushed the top bid up to $165,000, at which point the auctioneer paused proceedings to take instructions form the vendor in private.
When he returned to the room and reopened bidding, no one was prepared to offer a higher price than the previous bid of $165,000 and it was passed in for sale by negotiation.
9 Comments
This is indicative of the totally arse-about- face way in which we Kiwis handle leasehold property .
Leasehold works VERY succesfully almost everwhere in the world ............. Except here in NZ
The entire CITY OF WESTMINSTER (London) is leasehold , and do we see property values collapse ........no , its almsot the most expensive real estate on the planet
We , numbskull Kiwis have some lefthanded totally impractical "highest and best use " formula for valuing the underlying land which ensures the market is in permanent disarray .
In some countries leasehold of State land actual enables first home buyers to rent the land for a nominal sum equal to a 5% return on the Cap value , and this avoids them having to lay out huge sums they cant afford to buy the land
Here in NZ if a piece of land is suited to retail , but has a block of apartments on it , its vlaued as if it were retail
Its going to be a huge shambles until we get out act together
Vital information missing in this artical, How much longer has the lease got to run ? how much are they currently paying per year for the lease ? The price of this could potentially skyrocket and you have NO CONTROL over the price increase. There are people that are goingto be complaining about their rates increase very soon, thats noting in comparison to what you could be paying per yer on this appartment.
Here's the original listing:
http://www.realestate.co.nz/2398711
No information on the lease there, either.
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