Ray White City Apartments was the only one of Auckland's apartment specialists to hold a major auction this week and it was a small but committed crowd that turned out for it.
Five apartments were on offer with a bit of everything in the mix, a one bedroom unit with its own enclosed garden in the Eclipse Building on Vincent Street, reliable investor fare in the form of a shoebox unit in the Zest Building on Nelson Street, a leasehold unit in the newly remediated Landings Building by the historic former Central Railway Station Building, a two bedroom unit in the upmarket Connaught Building near the High Court, and a run down unit in need of renovation in a block at Point England.
Although it wasn't a large crowd, they weren't there to window shop and all of the properties attracted bids, with multiple bidders competing for four of them.
However buyers remained cautious on price and by the end of the auction two of the properties had sold under the hammer and three were passed in for sale by negotiation, although the price gap between the price vendors wanted an the price buyers were prepared to pay probably wasn't large on a couple of them.
The units that sold were the apartment with the garden patio in the Eclipse Building and the leasehold unit in the Landings Building.
Details and photos of the properties offered and the prices achieved on those that sold are available on our Residential Auction Results page.
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37 Comments
With all due respect it was a question to NJ not you Taubin, my angle is that NJ likes to give lots of opinion and advise to something that he potentialy has no experience or skin in the game with. If you really want to know I am an investor ie I don't work happy ?
With all due respect, this is a public thread that anyone can comment on. I'm not sure when it became okay for users around here to demand answers to their questions, especially when it's obvious they are only doing it so they can berate the other person, but it really needs to stop. It's petty and childish to say the least, and brings nothing to the discussion.
Shoreman, Have I ever told you about Bill's property journey? 'There and back again' a cautionary tale about the dangers of too much leverage.
'Bill bought a 2 bed flat for $250k he put $50k down and took a mortgage of $200k at the beginning of the cycle.
4 years later Bill's flat was worth £300k so he decided to move on up and take the 100K he now had in equity (mortgage was interest only) and use it to buy a 3 bed shed for $400K with a 300K mortgage (25% equity).
4 more years on and Bill's shed had somehow risen to be worth 500K (he was still earning the same money as before plus 2% per annum rises) but he now had 200K equity. Bill traded up and bought a house for 800K with a 600K mortgage. All was good in the world, he had a great house and didn't care that he would never pay the loan back in his lifetime..... The banks felt secure too, they'd got a 25% buffer.
Then the market changed... Bill's house went down to 700K (not a lot) but his equity position was now 100K, back to where he was when he owned his apartment 8 years before..... Then Bill started getting shitty with the whole situation and people kept talking the market down and he had this bloody great debt over his head. He never has any cash to go out, wife was miserable too and then Bill made the mistake of shagging a colleague from work..... Bill had to go to the market at a terrible time, but life has to change, there were very few buyers so eventually he took 650k offer - He finally withdraws his 50K equity, (where he started the adventure) but can't start again because his wife gets that in the settlement. Bill is back to zero.
Equity is a dangerous game to play if you keep magnifying your exposure. What we will see here is just a re-run of what happened in the UK in the 2000's. 6 and 7 times income mortgages just aren't sustainable for a normal life to the led.
It's got to be worse today, in 2008 we had to much debt, Central banks bailed out banks who then went on to lend a lot more money. So today a top a mountain of debt thats just not going to be an easy fix. Powells problem is not what to do today but whats been done in the last ten years.
"I argued that contemporary non-bank market-based finance, operating outside of bank reserve requirements, created an "infinite multiplier effect." And I posited that "unfettered finance" essentially changed everything (market dynamics, policy, saving & investment, economic structure, etc.) In particular, "money" would circulate freely throughout the securities markets, inflating asset prices and incentivizing speculation. In particular, there was essentially unlimited cheap finance available for securities speculation, ensuring price Bubbles inflated by self-reinforcing speculative leverage. "Money" could be borrowed in, for example, the "repo" market to purchase securities, where the proceeds from the sale would be recycled right back into the money markets where it would be available to borrow again and again without limit.
It amounted to the greatest transformation in financial and market structure in history, all backstopped by the "activist" Federal Reserve and global central bankers. It was a New Era - a New Paradigm - that worked miraculously until its 2008 malfunction risked bringing down the global financial system. Most importantly, this incredible system of ever-expanding speculative leverage, seemingly endless liquidity and powerful asset Bubbles has a fundamental Defect: it doesn't function in reverse (with deleveraging). Yet rather than addressing what went so terribly wrong in 2008, global central banks resuscitated and then bolstered this deviant financial apparatus, sending it on its merry way to reflate global markets and economies."
https://creditbubblebulletin.blogspot.com/2018/10/weekly-commentary-con…
NJ - I know it has and is popular to leaverage of one's existing property and get a bigger property footprint many have been successful but are potentially exposed if their timing in the market is wrong as you're story. Personally I have done that initially years ago but other purchases have been with real money and each property stands on it's own cashflow. The true potential of wealth through property is to HOLD on to it !
NJ - Great thankyou seems some people are sensitive on here to questions but thanks for your answer an answer can be given or simply declined. No offence but you're comments/advise re Auckland property should be viewed by other readers as just that from someone who has - Quote - 'I have a little experience'.
And for your reference in my opinion (35 years in the market) Auckland's market is probably in for a rough 18 months before it gains momentum again but history will tell the truth on that for all of us ! Regards
Greg has 6th sense when it comes to property matters such as this.
Now tell me, you’ve clearly indicated that you are looking into potentially purchasing a kiwibuild if the price is right, and said that you once owned a house. Kiwibuild is for first home buyers only, which obviously doesn’t include you. The only way you are eligible is under the “second chancer” criteria - but that would mean you have the financial status of a youngster with few assets or savings. For someone either approaching or over 40, this is a real worry.
The day you start listening to me is the day we start to turn this hot mess around.
All the info is reported on facebook through Bob Dey see link below
https://www.propbd.co.nz/eclipse-landings-units-sell/#
Thanks, this is very interesting (appropriate username).
From an earlier article,
Metropolis, 1 Courthouse Lane, unit 1101:
Features: 35m², one bedroom, storage unit
Outgoings: rates $1265/year including gst; body corp levy $3516/year
Income assessment: $475/week, fixed until 16 January
Outcome: passed in at $402,000
I saw that one put back on sale for $540,000. Seems a mite hopeful to me, for 35sqm. Other units in that building selling around that price have been significantly bigger, from what I recall.
There are several on Interest.co that really need to get out more!
Sitting at a computer being glum that house prices are too expensive for them is not a beneficial exercise.
Yes I spend time as well, but then I can afford to!
Back from overseas and had to tenant a property where the tenants are moving out in November.
Listed it while overseas and we were unindated with enquiries and people wanting to view.
First day back and wife showed 6 thru and had 3 applications and already taken by good people hopefully!
The rental market is very strong in Christchurch and returns are still very good.
This was interesting:
60 Minutes Australia House Bubble POP Rent Vs Buy
Thought it was current, but no, 2011. Same story, Australian bubble popping, mortgage stress etc.
Would be good to follow up those families who thought it was a good idea to rent back in 2011.
Interesting comments too.
I have finally sold my DGZ home to Chinese. Invercargill here I come!
https://www.bayleys.co.nz/1751629
FYI, a property mentor's perspective :
1) Oct 14, 2018 - https://www.propertyinvestorcentre.co.nz/the-boom-is-over/
2) Jan 11, 2018 - https://www.propertyinvestorcentre.co.nz/nz-property-market-whats-happe…
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