Two neighbouring homes in the suburb of Mangere Bridge in south Auckland were sold five times in four days amidst a “flipping” frenzy in New Zealand’s largest city and hottest property market.
Flipping is loosely defined as properties that are sold twice or more within a single year.
One of two Mangere Bridge properties – an expansive Victorian homestead – sold for NZ$1.45m (R14.1m) in February last year, again in early-August for NZ$2.4m (R23.3m) and then again four days later for NZ$2.8m (R27.2m). Within a six month period, the value of the property virtually doubled – making it a classic example of flipping.
The neighbouring home – a modest family bungalow – was sold three times in the same four days in August. Property records show that the first investor, who purchased the property in early-August for NZ$1.9m (R18.5m), on-sold the house the same day. Four days later the house was sold for NZ$2.05m (R19.9m) – an increase of NZ$150 000 (R1.46m). The NZ$1.9m paid by the first investor was more than double the price the original owners paid 20 months earlier.
Chinese-owned property development company, Treasure Plus, which now owns both houses, plans to demolish the two building and construct 18 townhouses.
Last year, 1 831 Auckland properties changed hands twice or more within a single year and 74 within a single month.
“Properties that are sold twice or more within the space of six months are of particular concern to regulators.”
The Real Estate Agents Authority is concerned that flipping is on the rise in Auckland, where net in-migration and a chronic shortage of housing stock have driven the average house price to a record NZ$1m (R9.7m).
Properties that are sold twice or more within the space of six months are of particular concern to regulators. As a result, the repeated sale of the two Mangere Bridge properties has prompted an investigation by the real estate watchdog. Authorities are particularly concerned when prices escalate so quickly that developers may be taking advantage of less-educated sellers.
An estimated 7.4% of Auckland’s 2016 property transactions have been identified by the real estate regulator as potential flips. The cities of Hamilton and Tauranga, both within a two-hour drive from Auckland, have also been identified as flipping hot-spots.
