PHOTO: This home on George Street, in Papatoetoe, Auckland, sold at auction this week for $1.305m. Photo / Supplied
According to ONE ROOF A four-bedroom home in South Auckland that was bought just over a year ago for $2.3 million sold yesterday for $1.305m – representing a near-$1m loss for the vendors.
The house on George Street, in Papatoetoe, was listed at the start of the month, with the agents making clear it was an “urgent sale”.
Barfoot & Thompson agents Salesi Lelaulu and Roger Franks said in the listing that the “vendor’s circumstances dictate that this beautiful family home is now on the market and make no mistake it WILL sell”.
Bidding for the home started at $1m with the property on the market at $1.3m. Two final bids pushed the sale price to $1.305m – more than $100,000 below the June 2021 CV.
Records show the vendor bought the property, which comes with an outdoor pool, in December 2021 for $2.3m.
Lelaulu declined to comment about the sale when approached by OneRoof.
The size of the comedown is notable, but price reductions have become more prevalent in the Auckland market.
OneRoof recently reported that the owner of a Mission Bay penthouse listed their property with a declared auction reserve that was $1.3m lower than what he paid for it two years ago.
CoreLogic chief economist Kelvin Davidson told OneRoof he expects to see more of these losses, especially if people are forced to sell within a short period of time.
“That’s quite a big loss. You’d have to wonder whether there’s something quirky going on.”
People who have bought near or at the peak of the market with the intention to hold onto it, but their personal circumstances have changed and they have had to sell are the ones who are likely to take the biggest hits, he said.
“I suspect most of these short sales are probably still personal circumstances, but you would think financial stress would start to become more common as a driver. But I suspect the common characteristic would be a short-hold period and some driver that has caused those people to sell sooner than they intended.”
Rising interest rates could start to make up a big part of the financial stress, he said, as people who purchased at the end of 2021 and signed up for a one-year fixed interest rate will probably have had to refix in the last few months to an interest rate about 3% higher.
“A big theme for the property market this year is just waiting for those lagged effects to come through and hoping they are not too big.”
Valocity head of valuations James Wilson said such a large drop in value was out-of-the-box and much bigger than the overall market decline happening with Papatoetoe property values at the moment.