Apartment purchased for $505,000 in January was resold this week for $775,000

Property

The price of an earthquake prone apartment jumped from $505,000 in January to $775,000 in April. Another jumped by $64,500 in a month

30th Apr 16, 5:02am by Greg Ninness

A potentially earthquake prone, one bedroom apartment that according to QV.co.nz had been purchased for $505,000 in January was resold this week for $775,000, an increase of $270,000 (53%) in three months.

The apartment was located at 31B Sales St behind Victoria Park Market and had a floor area of 90 square metres.

It was in a character building and had features such as high stud ceilings, exposed brick walls, timber beams, timber floors, stained glass windows and a fireplace.

However, it had also been given a category D seismic strength rating, which means it is rated as meeting just 20-33% of the National Building Standard and is classified as potentially earthquake prone.

It was auctioned at this week's regular Ray White City Apartments auction and prior to the commencement of bidding the auctioneer took the unusual step of stating that anyone who had not read the seismic report on the property, which was supplied with the auction documents, should not bid for it.

Bidding for the property opened at $550,000 and proceeded briskly from there with several keen bidders trying to outdo one another until it was sold under the hammer for $775,000.

It was not the only property to be resold at a substantial premium after a short period of time.

At the same auction a two bedroom apartment in the Federal City building on Federal St was given an even quicker flick.

According to QV.co.nz it had been purchased in March this year for $475,500 and appeared to have been pimped up and put straight back on the market and sold at this week's auction for $540,000, an increase of $64,500 a month after being purchased.

Of the eight properties offered at the auction, all but one sold under the hammer.

See below for the full results:

101/421 Queen St. Kiwi on Queen Building. A 35 square metre, one bedroom furnished unit. Vacant. Sold for $288,000. According to QV.co.nz it had been purchased for $127,000 in 2007.Rates were $965 and the body corporate levy $3817. The agent was Aileen Wu.
31B Sale St. Quick flick. A 90 square metre, one bedroom character apartment with a Category D seismic rating (potentially earthquake prone). Vacant. Sold for $775,000. According to QV.co.nz it had been purchased for $505,000 in January this year. Rates were $1966 and the body corporate levy $2564. The agents were Mitch Agnew and Ryan Bridgman.
6D/100 Greys Ave. Amora building. A 34 square metre furnished studio with balcony. Vacant. Sold for $305,000. According to QV.co.nz it had been purchased for $155,000 in 2005. Rates were $1113 and the body corporate levy $3211. The agents were Damian Piggin and Daniel Horrobin.
808/207 Federal St. Federal City building. Quick flick. A 61 square metre, two bedroom unit with a balcony. Vacant. Sold for $540,000. According to QV.co.nz it had been purchased for $475,500 in March this year. Rates were $1397 and the body corporate levy $5223. the agents were May Ma and Mark Li.
203/47 Wakefield St. The Sun building. A 19 square metre unit furnished unit. Rented at $305 a week. Sold for $225,000. According to QV.co.nz it had been purchased for $116,500 in 2002. Rates were $1010 and the body corporate levy $3277. The agent was James Mairs.
8A/189 Hobson St. The Stanford building. A 35 square metre, two bedroom unit with a car park. Vacant. Sold for $340,000. According to QV.co.nz it had been purchased for $208,000 in 2007. Rates were $1088 and the body corporate levy $4763. The agents were May Ma and Mark Li.
3BC/23-31 Hobson St. A single car park in the parking building opposite the Heritage Hotel. Sold for $66,500. rates were $314.46 and the body corporate levy $890. Rental income was estimated at $65 to $80 a week. The agent was Krister Samuel.
311/31 Davis Cres. Quest Newmarket building. A 30 square metre, studio under management contract to the hotel. There were no bids on the property and it was passed in. The agent was James Mairs.

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84 Comments

by mikeperro1 | 30th Apr 16, 7:25am 1461957908

We are doomed as a country for now and in the future. If land costs this much now then we are all going to have to live in apartment blocks. This is unacceptable and I pity anyone who doesn't own a house as you are doomed forever. Is this a country we want to be living in? The only thing that can fix this is 20% interest rates or another World War which will get the population down, unfortunately I dont foresee any of that, but then again neither did anyone foresee the credit crunch, 80s stockmarket crash, WW1, WW2, Dotcom bubble...

by cmat | 30th Apr 16, 8:00am 1461960048

You didn't foresee WWI and WWII.... Far out you're old.

Did you foresee Christ's birth?

by JimboJones | 30th Apr 16, 9:46am 1461966364

I can't tell if you are being sarcastic or not? Living in an apartment block isn't that bad is it? And there are plenty of cities where you can still buy a house if you aren't into the big city vibe.

by xelnaga | 30th Apr 16, 7:54am 1461959666

Breaking news. A carpark was sold!

by Kakapo | 30th Apr 16, 7:55am 1461959752

Does it have indoor-outdoor flow?

by dictator | 30th Apr 16, 8:56am 1461963386

I understand it was open plan.

by Kakapo | 30th Apr 16, 9:19am 1461964751

Is it subdivisible?

by rastus1 | 30th Apr 16, 9:26pm 1462008376

..probably will house one of those damn foreign vehicles ...

by muntijaqi | 30th Apr 16, 2:41pm 1461984080

Do you think the problem of high land prices and property is the high population? No it's not.
It's as simple as this: there is a bubble
And every bubble has two main factors: the spread believe that prices will continue increasing (and your comment just confirms that) and an unlimited amount of credit (because the banks also are part of the first group and consider irrealistic equity when lending more and more)

It will burst. No need to kill half of the population for prices to decrease, just wait and see.

by xelnaga | 30th Apr 16, 10:12am 1461967921

It's different this time. This is the new paradigm! Auckland house prices double every 7 years. Forever.

by zorro15 | 30th Apr 16, 8:50am 1461963015

$505 to $775, 53% in 3 months. $480 CV, 58% above CV. I wonder if they were local buyers? Looks like money laundering to me.

by dictator | 30th Apr 16, 8:58am 1461963521

People don't understand how expensive earthquake strengthening is. Then factor in the number of people who can't afford to contribute their portion. That's a huge risk. Don't attribute to money laundering that which could be explained by stupidity.

by Neonlights | 30th Apr 16, 9:02am 1461963739

Viewed Sale Street and most (not all) of the buyers viewing had kiwi accents so seemed local. Plenty of boomer types. It's a nice enough place but not spectacular and has no car park. I'm stunned it went for that much, even in the context of the current market. Starting to get a strong sense of my time living in Ireland during the boom...

by CJ099 | 30th Apr 16, 12:09pm 1461974941

There are three simple answers to slowing down and recorrecting the housing market.

1) Massively restrict Non Resident buyers, we all witness how the housing market ground to a halt when the IRD changes first came in to effect last October.

2) Stop allowing immigrants to purchase their citizenship but just buying (Supposedly investing) properties here as it causing our housing market t drastically over inflate, locking out actual NZ Citizens.
3) Tighten up immigration, the people coming here need to be qualfied and skilled able to contribute to New Zealand. Preferably by setting up new businesses (Being a Landlords should be excluded from that new business list as it only perpetuates the house price inflation).

by muntijaqi | 30th Apr 16, 2:45pm 1461984344

So mum and dad investors have nothing to do with it?
It all comes from outside then?

by rastus1 | 30th Apr 16, 9:32pm 1462008724

....I can tell you the pressure coming on us mum and dad investors to join the gold riush is huge. I'm diversified, but cripes I admit I have moments of panic that I'm not in boots and all with property. Can't imagine how the pressure must be for someone with no property. The situation that has developed is terrible.

by rmnz | 1st May 16, 6:03pm 1462082625

Its not too bad (speaking as one without property), friends of mine who have over leveraged on property have stopped shaking their heads at me and are now getting worried about job security, negative cashflow etc. Having said that, someone I know has just re-done their home loan down to a cheaper rate....and have treated themselves to a brand new BMW X5 as they're "not paying any more than I was".

by Mark L | 30th Apr 16, 9:43am 1461966218

I.R.D.... Are you out there ?

by sharetrader | 30th Apr 16, 9:51am 1461966689

I'm sure it was a change of circumstances

by Alter Ego | 30th Apr 16, 10:12am 1461967930

Never mind just the IRD....

Where the hell is our 'Very, Very Dear Leader and his cohorts' in all this.

by Joe Public | 30th Apr 16, 10:32am 1461969147

Stamp duty them on the way in and capital gains them on the way out. That is the only way out of this mess that has been created.

by two otherguys | 30th Apr 16, 12:08pm 1461974893

Stamp Duty

Can't be done - because of a clause in the NZ-South Korea FTA - so says John Key - The NZ-China FTA requires identical treatment as all other countries including South Korea

Then John Key travels to China to renegotiate the NZ-China FTA

You would have thought the smartest thing to do would be to renegotiate the NZ-South Korea FTA and get rid of that clause because it doesn't seem Korean's are such large buyers of NZ residential property

Then we could impose stamp duties on all Foreigners

Hong Kong and Singapore did it - so they must not have FTA's with South Korea

Who signed us up with that stupid FTA?

by Penguin | 30th Apr 16, 12:35pm 1461976504

A 5% land tax per annum should sort out the offshore buyers. I can't work out why we can't charge stamp duty when they charge a 10% stamp duty on foreign buyers in HK and point blankly you aren't allowed to buy property in China.

The playing field seems to be on the side of a hill.

by ObeseBallerina | 30th Apr 16, 5:28pm 1461994084

For the 10th time, stamp duty CANNOT be implemented! Dont you watch the news? Youve been banging that same drum all over the internet. Move on and find a new Envy tax to bang on about.

by SmoKey | 30th Apr 16, 11:46am 1461973599

The Govt and IRD are massively losing out on these speculative ventures...

by Hardworker-doe… | 30th Apr 16, 12:05pm 1461974719

Im not even sure what to make of all this anymore. I was angry and worried and tired of swimming against the tide. Now I feel like I'm watching a slow moving car crash from the side of the road. With no way for it to be stopped and at serious risk of being slashed by the shrapnel.

by Alter Ego | 30th Apr 16, 12:33pm 1461976403

You cannot beat a millionaire from overseas or even here buying up your homeland, and birth right.

You have been sold down the road, even blocked as it is, in Awkland.

You have been blocked too. By our 'Dear Leader and his cohorts"

I suggest stop working, go on the dole and get a free rental from Social Welfare, via the Taxpayer funded rental scheme.

That will learn them, that HardWorkers are really required to make things work in this unfair country....Eventually.

Might take a time, as all Hardworkers would have to all down tools, whatever it is you do, with all your jobs.

Nuts is it may seem, when all the NZ Hardworkers really band together, someone will really take notice. It might take a revolution, too.

But you will have to block the Hardworkers from coming in from overseas and all those so-called millionaires, gambling on you not doing a thing, but Renting..and keeping 3 or more jobs going to pay for their ....easy pickings.

Otherwise, the Government, will continue your decline in interest and your decline in having a home of your own....and pull out all the stops...in between.

Sorry mate, I feel for your dilemma, but we brought all this on ourselves, when voting in the wrong party hearty brigade. Because inflation is everything...to them.

And it is in houses.....primarily in Awkland...because the have their hand in the till...

Yours.

by Hardworker-doe… | 30th Apr 16, 12:38pm 1461976734

F**k.

by CJ099 | 30th Apr 16, 12:50pm 1461977430

I very much agree with you Hardworker and Alter Ego, though we're still citizens and we have the majority of the voting power. If it also takes shaming our government in to action then that's what we'll do!

We all know that one of the main reason why Auckland's house prices are so over inflated is a lot due to money laundering and Non Residents looking for a safe haven for their capital, which is a false economy by the way.

If other countries are prepared to do something about this, I do not see why our government should sit back and be idle, when we know it's having a drastic effect on NZ and is basically turning our young generation in to tenants which will have a huge negative affect on all our well being.

Here's an example of how the UK is taking a stand against corruption:-

http://www.transparency.org.uk/publications/paradise-lost/
Paradise Lost: Ending the UK’s role as a safe haven for corrupt individuals, their allies and assets.
Paradise Lost is a thorough analysis of the UK’s role in global corruption, outlining the multitude of ways in which the UK is enabling corrupt individuals to enjoy luxury lifestyles and cleanse their reputations. This includes:-

* The ability to buy UK property anonymously through foreign companies.

* The UK’s Overseas Territories offering secretive company ownership

* Lack of powers for law enforcement to seize stolen assets.

* Role of UK based accountants, lawyers, estate agents and other “professional enablers” in making it easy for corrupt individuals to hide their cash.

* An anti-money laundering system that is easy to bypass in order to launder money with impunity.
Key recommendations include:-

* Ensure the UK’s Overseas Territories and Crown Dependencies introduce centralised public registers of beneficial ownership, and ensure corrupt individuals cannot buy UK property with impunity.

* Act on unexplained wealth by increasing the capabilities of the UK’s asset recovery regime to seize corrupt funds.

* Fix the flaws in the UK’s anti-money laundering regime – overhauling the supervision of the rules, and prosecuting complicit professional enablers.

Sound familiar....?

by Penguin | 30th Apr 16, 12:51pm 1461977463

The fire sale continues......NZ First's ratings must be going up by the day at the moment.

http://www.voxy.co.nz/politics/5/250130

by sharetrader | 30th Apr 16, 1:12pm 1461978758

"gifts attached" or sweetners, backhanders, in other countries is called corruption, here its doing business.
the stink is up high and now filtering down, I guess that is the trickle down theory in action

by Zachary Smith | 30th Apr 16, 1:25pm 1461979512

Come on you guys, it's not that bad. Auckland is a the super-city of NZ and NZ is highly rated. A funky apartment like this will go for a premium. Other ones were considerably cheaper and nice two bedroom units in Central Auckland sell for high prices like this too. There are quite a few couples with both earning high salaries that may see this as a better choice than a standard three bedroom home in the suburbs. It is something you can just lock up and leave when you go travelling.

by Echinops | 30th Apr 16, 1:34pm 1461980080

Hey Zachary my neighbour just sold their house to Chinese for $2.65m. Over the 3-week marketing campaign there were 120+ groups and over 80 groups of them were Chinese.

by Zachary Smith | 30th Apr 16, 3:00pm 1461985244

Interesting statistics. Do you know what the CV is? I do think the rise of the Chinese middle-class which is kind of unprecedented has had a major impact. NZ has decided to go global so this sort of thing is not unexpected. All I can say, hopefully I am allowed to, is that you could do worse. The Chinese do integrate quite well into modern European societies, make the kids do piano and violin for example and generally don't have incompatible beliefs and will inter-marry.

by J.C. | 30th Apr 16, 3:54pm 1461988473

Yeah, comparatively, the Japanese were different. They couldn't and didn't want to integrate.

by Echinops | 30th Apr 16, 4:33pm 1461990788

The CV is $1.75m. It has got 600sqm of land, freehold but the house is a boring 80's brick & weatherboard 4-beddy. No views but I think the Chinese like the school zone. My neighbor bought it in the mid-90's for around 400k.

by ObeseBallerina | 30th Apr 16, 5:32pm 1461994368

Who cares what CVs are? They are all wrong! They should do away with this system. Its hardly any form of benchmark.

by Zachary Smith | 30th Apr 16, 6:24pm 1461997447

I disagree. In certain individual cases they are wrong but I can get a general idea of what the sale price will be by using the CV as a benchmark. Different suburbs tend to sell over CV on average by a different percentage. Different types of houses too and after studying hundreds of them I was starting to get good at guessing what their sale price would be.
I was also tracking average percentage over CV for auctions to see if the market was trending up or down. Auctions tended to have an average over CV of around 35%. If they went below 30% I'd know that we were on the way down and if they went closer to 40% I'd know it was trending ever upward. It was kind of my hobby, much to many commentator's ire.

by ObeseBallerina | 30th Apr 16, 7:32pm 1462001521

I enjoy your commentary Zack. I just feel the CV's are so finger in the air it really is pointless. But I suppose what do you use instead? In the UK the bank valuers look at whats sold comparative in the area recently and use that as a benchmark.

by BadRobot | 30th Apr 16, 7:54pm 1462002859

Strange - my neighbours property sold for only $5K over CV here in Christchurch.Other properties in the area seem to be selling just above CV.

by ObeseBallerina | 30th Apr 16, 8:00pm 1462003254

Wonder how many earthquakes are coming? Certainly not much upside for paying a premium for Christchurch property.

by BadRobot | 30th Apr 16, 11:12pm 1462014766

And in Auckland there is an upside - you're sitting on 50 odd volcanoes ( not to mention the super volcano) .

by ObeseBallerina | 1st May 16, 3:59am 1462031961

Teradactals witnessed the last Auckland eruption. The last Christchurch earthquake was live streamsteamed on YouTube. Can you tell the difference?

by Zachary Smith | 1st May 16, 7:03am 1462042982

Actually I believe the Maori witnessed Rangitoto last erupting about 600 years ago. A similar eruption today would probably be quite a good tourist attraction.

by BadRobot | 1st May 16, 9:17am 1462051055

And I believe Auckland has had sizeable earthquakes in the past.

by ObeseBallerina | 1st May 16, 9:38am 1462052281

No doubt. I'm sure NZ was created by volcanic eruptions too. Im also sure anyone thinking of buying a property in Christchurch has earthquakes as a no 1 priority. Auckland - not so much.

by Zachary Smith | 30th Apr 16, 7:55pm 1462002909

Thanks ObeseBallerina I enjoy yours too. Yes I keep a close eye on comparative sales for assessing my own properties as they are certainly the best indicators.

by Clarence68 | 1st May 16, 12:28pm 1462062515

G'day Zachary. Just out of interest what would you do if properties starting slipping well beneath the 30%? Would you sell or are you keeping all your properties for the long term? How many properties do you own, if that is not too personal a question? And if you had to take a guess on when the market will peak (the trillion dollar question) when would you say?

by Zachary Smith | 1st May 16, 12:59pm 1462064374

I have only four properties including my own residence so am a pretty lightweight landlord although as you can imagine double digit annual price increases are a bit embarrassingly high in dollar terms. However as you know it is unrealised and I live pretty frugally.
I don't think all properties would drop 30% across the whole city and consider I own ones in a very desirable area. I would expect in such a scenario for there to be significant drops starting on the outer fringes of the city. I would probably sell one now if my tenant left but I don't like to give tenants notice on a whim and kind of go with the flow. I am not really a speculator but just want to secure housing and income for my family as our lives change.

I have been expecting property prices to reach a ceiling soon and have sort of structured things so that the family can rearrange things and live in a couple of the current rentals for attending university and another for us to possibly retire to. So my properties are very much purchased with a view for personal use eventually and I want to keep them for the very long term.
So short answer is I would sell one and keep the rest because I need them. I think people should hang on if they can afford to. The peak is soon hopefully with only small single figure increases.

by Clarence68 | 1st May 16, 1:18pm 1462065517

You are obviously very tuned into the market. It would be good to hear from you when you think it is peaking. I am hoping it will stop booming soon - for the younger generation rather than for myself.

by Zachary Smith | 1st May 16, 1:31pm 1462066311

I am of the same mind and will certainly report it if my calculations show prices are dropping. I have already expressed concern about price rises for entry level homes in the South and West of Auckland being a bit excessive over the last year. Earlier comment battles were misinterpreted as spruiking but I was only countering people who were claiming that prices were starting to drop as that was at odds with what I was seeing.

by Clarence68 | 1st May 16, 2:09pm 1462068572

I always suspected you were a nice chap, Zach, although I wasn't too sure about your alter ego Doublegz. Was he your Mr Hyde?! :)

by Joe Public | 30th Apr 16, 7:50pm 1462002649

Stamp duty all investors.

Has anyone seen the actual clause they are talking about rather than just "watching the news and listening to John Key like sheep" ?

Post it on here the specific part than mentions stamp duty. I can understand that they may not be able to single out foreign investors however it would be a blanket stamp duty on both local and foreign. Who would sign something that would restrict that. You would have to be an idiot.

by rmnz | 1st May 16, 6:22pm 1462083771

Not an expert but I suspect it falls under this;
Annex 10 - E - Taxation & Expropriation:
"The determination of whether a taxation measure, in a specific fact situation, constitutes an
expropriation requires a case-by-case, fact-based inquiry that considers all relevant factors
relating to the investment, including the factors listed in Annex 10-B and the following
considerations: "

...

"...(c) a taxation measure that is applied on a non-discriminatory basis, as opposed to a
taxation measure that is targeted at investors of a particular nationality or at
specific taxpayers, is less likely to constitute an expropriation;..."

If so, its hard to see how this is applicable yet a Land Tax wouldn't fall under the same measure.

by Joe Public | 30th Apr 16, 7:55pm 1462002956

"That's why the prime minister last week said stamp duty on foreign buyers of New Zealand land may now breach FTAs," he said.

What about a stamp duty on all investors local and foreign. It seems to say that if you were to single out foreign investors it would be a breach however does anyone know if it applies to a stamp duty on all investors ?

Classic case of not knowing all the facts and ruling out a viable option just because the ex banker said so.

by ObeseBallerina | 30th Apr 16, 8:06pm 1462003562

its a non starter! Find a new Envy tax.

by moa man | 30th Apr 16, 8:16pm 1462004198

What is to be envious of? I am curious.

by ObeseBallerina | 30th Apr 16, 10:01pm 1462010487

Ask Joe, hes the one rampaging for taxes he wont ever have to pay.

by moa man | 30th Apr 16, 7:56pm 1462002992

This apartment looks like a piece of junk. A Dump Par Execellence. Will it fall apart when in rains too hard? Will it melt?

by Zachary Smith | 1st May 16, 6:42am 1462041774

The featured apartment has lasted almost ninety years already without melting. It is 90 sqm which is large, like three times the size of some of the others in the article, so it is rather special.

by ObeseBallerina | 1st May 16, 7:03pm 1462086210

I think its quirky/cool too. Reminds me of the apartment I rented in New York, just substantially bigger!

by Joe Public | 30th Apr 16, 9:42pm 1462009379

Ok found it
ANNEX 10-E
TAXATION AND EXPROPRIATION
The determination of whether a taxation measure, in a specific fact situation, constitutes an
expropriation requires a case-by-case, fact-based inquiry that considers all relevant factors
relating to the investment, including the factors listed in Annex 10-B and the following
considerations:
(c) a taxation measure that is applied on a non-discriminatory basis, as opposed to a
taxation measure that is targeted at investors of a particular nationality or at
specific taxpayers, is less likely to constitute an expropriation; and

I would say that a blanket tax on all investors (Local and foreign) would likely pass this test. It is applied on a non-discriminatory basis.

How is the stamp duty tax and different than the land tax that he is harping on about ?

So maybe under the Korean FTA agreement you cant apply a stamp duty to foreign investors (discriminate) however I can't see why you can't apply it to ALL investors (non discriminatory).

Make our houses our homes again. Stamp Duty 10-15% on all investors buying existing housing stock. Zero tax on new builds to encourage supply.

by ObeseBallerina | 30th Apr 16, 9:11pm 1462007513

Well I'm pleased you don't have any power to implement policy.

by BadRobot | 30th Apr 16, 11:14pm 1462014877

And I'm glad you don't either.

by ObeseBallerina | 1st May 16, 3:57am 1462031825

What I like as policy is policy now.

by Zachary Smith | 1st May 16, 7:21am 1462044080

I would certainly rather have ObeseBallerina making the policy. Things are actually pretty good as they are for most of us. It really is only a handful of malcontents and frankly some are approaching nutter level on this website making more than their fair share of noise.

Why do so many people come to NZ? Because they see it as a land of opportunity. They can make a good life here. If you fully take advantage of what society offers you can make a good go of it and I think a lot of immigrants can see that and they wonder why many born and bred Kiwis don't. For example a childcare centre near me had a mix of Chinese and Kiwi staff but the Chinese staff worked their butts off to get their qualifications and ended up earning twice as much as their Kiwi counterparts. Sure it is anecdotal but one told me that she couldn't understand why the Kiwis didn't try harder as it was immeasurably easier if you didn't have a language barrier to overcome.

by two otherguys | 1st May 16, 6:54pm 1462085679

nonsense quote: Things are actually pretty good as they are for MOST of us

Really

You got any proof of that - some factual evidence - or are you giddy from doing too many of OB's fouette's

by Joe Public | 30th Apr 16, 8:16pm 1462004203

You call it Envy tax I call it Reduce Inequality Tax.

Other countries are doing it and it is successful why wouldn't NZ follow suit. The stamp duty would help pay for the new infrastructure such as the rail loop so that AUckland Rate payers wouldn't have to cover as much of the bill. Why shouldn't society benefit from investors foreign and local driving up prices and making hundreds of thousands of dollars at the expense of first home buyers.

Plus it will encourage new supply as the stamp duty wouldn't apply to existing homes. Win Win situation.

by moa man | 30th Apr 16, 8:29pm 1462004985

Win Win for who? Cash is King. Property investors are scum. Losers worry about Stamp Duty.

by Joe Public | 30th Apr 16, 8:32pm 1462005136

Win WIn for society. Money goes to pay infrastructure and new houses are built.

by moa man | 30th Apr 16, 8:58pm 1462006723

And will the new houses that are built be for New Zealand citizens or for the cheap imports?

by Joe Public | 30th Apr 16, 9:41pm 1462009308

Moa man than kind of thinking should be extinct like the Moa ;) No life is cheap.

by moa man | 30th Apr 16, 9:45pm 1462009538

It happens. Has to be done. The adults in the room prevail.

by Machiavelli | 1st May 16, 10:55am 1462056916

I had to wait 2.5 years for this level of gain on one property. What about us poor property investors having to compete against these speculators. Where's the justice?

by Clarence68 | 1st May 16, 12:37pm 1462063023

I read today about the market in the UK after they introduced the new additional 3% stamp duty for investors on 1st April. There was a rush to buy in the 3 months prior and they were worried the market would drop steeply in April. They wanted to even the playing field for FHB but not to instigate a crash. The market went up 0.2% in April. It didn't crash as demand, like here, is too high and interest rates are very low. I would say that is a good result. Stop the boom but keep the market steady. I just can't understand why the power- that-be are so nervous of introducing demand measures here. Anyone care to explain why NZ should be different.

by Andrewj | 1st May 16, 12:40pm 1462063218

http://www.dailymail.co.uk/news/article-3537799/Cherie-Blair-son-Euan-s…

by Clarence68 | 1st May 16, 12:43pm 1462063381

Bloody self interested politicians. I hear that 71% NZ MPs own several properties.

by BigDaddy | 1st May 16, 1:10pm 1462065011

You are all wrong.
The apartment in question may be earthquake prone but the owners do not need to do anything about it for up to thirty (30) years.
From the Council own website:

What is the timeframe for strengthening work?
"Auckland Council’s earthquake-prone building policy states the timeframe for strengthening work is 10-30 years, depending on the priority of services of the building and if it is a heritage building. The council will work with owners and tenants to develop realistic timelines for strengthening"

In practice it is closer to 30 years.
Hence the buyer has done his homework and paid the right price and the seller too, has reaped his richly deserved reward.

by Fritz | 1st May 16, 5:44pm 1462081459

What a joke this is!
This would be subject to the govt's new CGT rules right as it sold within 2 years?
This is definitely a bubble, it it pops NZ is well and truly screwed.
Thanks for lazy / incompetent local and central govt politicians over the past 15 years!
We are a country of myopic dimwits we are and most don't realise it.

by Zachary Smith | 3rd May 16, 6:29am 1462213758

This is just one unusual and remarkable sale. No need to extrapolate it out to all house sales. One of the other apartments went up 132k in nine years which was about 5% a year. Keep calm and carry on.

by positivelywallstreet | 3rd May 16, 7:43am 1462218208

One of my family was at that auction and I have read a building report.
The apartment could take a second bedroom and that would justify a $700k figure.
The building is lime earth block which is rather classic but plenty of cottages of this construction are still standing.
Just to stir you all up again the successsful bidder was a telephone bidder ....but the agent was not asian.
Back to sleep.

by conservative | 4th May 16, 2:26am 1462285577

There are several issues fuelling the Auckland property-price bubble which no one seems to care about..

High property prices isn't such a bad thing if it's accompanied by commensurate income levels... where are the incomes in Auckland? What is the average per capita, per annum income in Auckland and by how much % does it grow every year? Compared to incomes, by how much % do property prices go up by? Property prices in the UK have corresponding income levels to support the property price levels.. Can the same be said of Auckland?

Immigration - where is the focus on quality? How will they even afford the rents, forget the property prices with the given income levels in Auckland? Bring immigration focus back to quality of migrants and ensure these quality migrants get high-paying jobs..

Ban property-related investment as a pathway to immigration

Encourage only business-driven migration, which creates jobs and creates capital in NZ

Insert suitable tax provisions through legislative changes that contribute to NZ before the profits leave the country in the form of "return on capital" as reported in yesterday's newspaper about a pharma global giant which repatriated $52 million out of NZ to a European country in the guise of return on capital in a perfectly legitimate way after paying just $59,000 by way of NZ taxes. Similarly tax the profits made on speculative / investment property sales

There must be some sort of a disincentive for speculative and / or investment buying of property. In short, any property bought by anyone for a purpose other than self-occupation should be taxed appropriately, say at 30% at the time of buying and at the time of selling, if sold within a 3-year period from the date of purchase.

Land ownership - leasehold

Change the lease laws. Land is an asset upon which (usually massive) capital gains occur over time at the time of transfer of ownership. But in NZ, the lease that a lessee pays the lessor is linked to the price of the land which is unfair and unsustainable and on top of that it steadily increases due to the lease review period of 7 years (in most cases). So in such cases land which is an asset class should only yield capital gains also yields a steady revenue income which is unfair and unjust. These laws need to be amended to ensure that the lease rent is fixed for the tenure of the lease at a very nominal sum, say around $1/- per square meter, per month. This would greatly reduce the progressively increasing inequality between the lessor and the lessee. It will also remove the uncertainty a lessee faces every 7 years. It is ridiculous to have the lease rent linked to the land value which in most cases, is bound to keep on increasing. Where else in the world, apart from NZ, does this model of leasehold land ownership and treatment of land as an asset class and treatment of lease rent as a revenue income prevail?

The way things are, if they continue, the average New Zealander will become poorer and remain a tenant all his life. How can a first home buyer with limited access to funds compete against a speculator or investor with access to a relatively vast pool of funds at any property auction?

Lending

Bank lending is skewed in favor of giving loans to borrowers who are able to prove to the bank that they do not need the loan (at the cost of the genuine borrower who needs a loan) !!! The welcome home loan scheme is only for homes costing under $500,000 in Auckland. What % of the current freehold housing property inventory for sale is valued under $500,000/- to be eligible for a welcome home loan? 1%? 5%? What is the latest Auckland median home price? $800,000+ ??? So who can get a welcome home loan in Auckland?

And the main issue is that nothing is illegal. So the only way out is through legislative changes in the way property is marketed, bought, sold and taxed...

by Joe Public | 4th May 16, 2:35am 1462286157

Conservative. Well done it was the post of the month !!!

by conservative | 4th May 16, 9:49am 1462312176

Is there any flaw in the reasoning? Let more people think along these lines... maybe better suggestions will come up which will ultimately benefit NZ..