In a swift turn of profitable handover, an Auckland developer demonstrated some acute business acumen when he re-sold a West Auckland property for a stunning $1.5 million within just seven months of its initial purchase – earning him a gross profit of $299,000.
The property, a 1960s-vintage three-bedroom house situated in Mason Street, New Lynn, was initially acquired in February for $1.201m by the developer. He had set his sights on constructing townhouses on the 809 square meter area due to its urban density zoning.
The seasoned real estate agent, Benjamin Feng, who facilitated both purchases, revealed that his client had managed to clinch other plots of land earmarked for a grander project located on the North Shore. Consequently, he decided to let go of his New Lynn investment.
Despite the fact that the developer made some preliminary planning undertakings, no resource or building consents accompanied the sale of the property. This means that the buyer must embark on the project from the ground up, bearing the extra cost for design and consents, according to Feng.
However, this did not temper the enthusiasm of potential buyers. In Feng’s promotional campaign, the catchphrase “Vendor’s instructions are clear! Must sell!” attracted numerous developers who did not even find it necessary to inspect the house personally to determine its value.
“No downturn is predicted in the market, but rather an upswing. The property attracted myriad buyers, with some opting to invest for long term gain while others plan future developments,” said Feng.
With a CV of $1.6 million, the property’s land value stood at $1.4 million. The profit made equated to an impressive daily earning of over $1300.
Feng divulged that up to seven other developers had demonstrated interest in the property. The bidding, which began at $1 million at the previous week’s auction, briskly climbed to $1.48 million once it was declared on the market. The proceedings culminated in a competitive bidding war among three contenders.
“The eventual buyer, a prominent developer, who remains undecided on future plans, is currently reviewing financial implications with suggestions from a planner and myself,” said Feng.
Feng insider’s knowledge posits that even after the hefty $1.5 million price tag, another developer could still make a handsome return upon reselling in a year or two. He also revealed that the original vendor had plans to construct four or five single townhouses, which could each fetch over $1 million in the current New Lynn property climate.
Returning to the auction market after missing out, other developers continue their pursuit of potential sites. Those who remained financially robust have been engaged throughout 2022 and stand ready to initiate new projects after disposing of completed endeavors.
According to recent indications, the auction market experienced a resurgence over the last month. At Ray White Manukau’s most recent mega-auction in South Auckland, 33 lots out of 55 properties went under the hammer, an additional cluster is currently in negotiations or receiving multi-offers. Among the 213 registered bidders, properties collectively sold for nearly $28 million on the day, in spite of pre-election anxieties from some parties.
