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Central-city unit sells for just $12,800

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  • Central-city unit sells for just $12,800

    Central-city unit sells for just $12,800
    4:00AM Saturday August 30, 2008
    By Anne Gibson

    Auckland's property market has plummeted to a new low with the sale of a unit for just $12,800, which three agents said had set a record.

    The rock-bottom price was paid for a fully-furnished 32sq m one-bedroom apartment in the 232-unit Quay Park Railway Campus, a conversion of the former Auckland Railway Station.

    Andrew Bond of City Sales listed the Mahuhu Crescent unit and said it came with curtains, a microwave, bar fridge, single bed, carpet, desk and lights.

    City Sales auctioned unit 30, an empty ground-floor west-facing apartment which had been generating $92 rent a week, giving its previous owner $4800 annually, plus GST, during the last four years. But now the building is vacated for major repairs and the unit is generating no rent and could be empty for the next three years while the place is fixed.

    The low price paid surprised agents who said it set a record. Mr Bond and Mike Richards, sales manager at City Sales, said they had never heard of an Auckland unit going for so little. Damian Piggin of Ray White also said it was the lowest he had heard about. But he would not have paid a cent.

    "I don't think it makes a lot of financial sense," said Mr Piggin, who also specialises in selling apartments.

    The unit's new owner faces contributing to a $6.1 million repair bill, mainly to fix weathertightness problems. Unit 30's buyer is up for $22,000 plus GST as a share in the repair bill, Mr Bond said.

    Owners are also forbidden from living in their places because the entire Railway Campus is leased to the University of Auckland.

    Mr Bond said unit 30's outgoings were annual body corporate fees of $1100, Auckland City and Auckland Regional Council rates of $600 a year but no ground rent until 2011. Then, land owner Ngati Whatua O Orakei Trust Board will charge an annual fee, as yet unknown. But the building's repair will eat the biggest hole in the new apartment owner's pocket.

    Unit 30 does not have a kitchen, but it does have a lockable cupboard in a ground-floor communal kitchen area for students, Mr Bond said. The building has 123 carparks, but unit 30 does not come with this luxury. Mr Bond said many of the parks were owned by New Zealand's largest private parking company, Tournament Parking.

    City Sales auctioned six Railway Campus units, all owned by one investor who is thought to have paid around $800,000 for them some years ago. The auction netted the investor just $101,800.

    Mr Richards said the places were auctioned without reserves. Bidding started sometimes at just $1000. Top price was paid for a three-bedroom place which went for $25,000. Two two-bedroom units were auctioned for $16,500 each and another two-bedroom unit fetched $17,500. As well as the $12,800 place, another one-bedroom unit sold for $13,500.

    Next City Sales apartment auction: 12.30, Wednesday, at Hopetoun Alpha, 19 Beresford Square.

    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    City Sales auctioned six Railway Campus units, all owned by one investor who is thought to have paid around $800,000 for them some years ago. The auction netted the investor just $101,800.
    Examples like this should be compulsory reading for anyone who thinks that property investments is "as safe as houses".

    That is a truly sickening loss.



    • #3
      Even if the vendor paid me $12,800 to take it off their hands it still wouldn't be enough. What a dog of a development.



      • #4
        Would be interesting to see the sales history on some of these. I seem to remember these were being sold very cheaply after one of the americas cups.

        Now that they are leaky, it is difficult to tell if this will be a good deal. My guess is on no, even at that price!


        • #5
          Has anyone noticed that the papers appear to get City Sales email rather than actually going to their auctions. All their "news" is actually 1 week out of date (this is two weeks in a row this type of article has been written.).


          • #6
            The irony of the Railway Campus debacle is that the landlord is Ngati Whatua, who got the property as a result of allegations that their ancestors had been ripped-off in the early 20th century - which was demonstrable bollocks.

            Having acquired the property on that basis, they then proceeded to flog off leasehold units in it - which are now worth a fraction of what was paid.

            I would like to know where the millions paid by the purchasers, and previously by the taxpayer, have gone.

            The only recent developement is that Ngati Whatua now claim that they own the whole of Auckland City and demand compensation for not pursuing that claim.


            • #7
              GF - I don't think you can blame Ngati Whatua for the railway station being leaky as they weren't the developer/architect/building regulator/etc.

              They own the land and as far as I know, the lease they provided is still as the day they issued it, it is the building on top that has the problem.


              • #8
                Quite right CJ.

                I think the land was given in lieu of a situation where tribal land in Orakei that was taken by the Crown around WWII for strategic use and not given back to Ngati Whatua but rather sold on or given to the council. Wasn't that what the Bastion Point occupation about?

                Anyway, a multi-unit leaky building claim on leasehold land is one deal I would not touch with the a bargepole. The purchaser is playing Russian roulette on that one.

                Last edited by kane656; 02-09-2008, 04:01 PM. Reason: Doesn't make sense...