Preparing to sell one of his newly-built homes for as little as one dollar, a New Zealand developer has narrowly avoided a devastating loss after dozens of buyers turned up and sparked a competitive auction.
The developer was forced to sell five properties in Māngere East, Auckland, after his lender told him: “Sell it or we will.”
He listed one of the properties, a three-bedroom standalone home, with a NZ$1 ($0.80) reserve, meaning it could technically have sold for next to nothing.
Whatever the property managed to fetch would then become the reserve for the remaining four homes that were in the development.
According to OneRoof , the highly-anticipated Harcourts auction was packed, with people even reportedly standing on chairs to get a better view.
After 42 bids over eight minutes, the hammer finally fell at NZ$625,000 ($501,591).
Despite the result falling NZ$200,000 ($160,509) short of what the developer had originally been asking when the home hit the market in March, it was still much more than the pocket change it could have exchanged for.
“The room was packed. People at the back were standing on the chairs to see. The crowd was wild, which was good,” Harcourts agent Harsh Kathuria told OneRoof, saying 28 people registered to bid.
The buyers will reportedly use the property as an investment and keep the current tenants in place.
The surprises continued as two more properties in the development sold under the hammer that night, selling for NZ$645,000 ($524,865) and NZ$687,000 ($551,349).
The remaining two attracted multiple bids but were passed in. They are now being advertised for NZ$695,000 ($557,770) and NZ$675,000 ($541,719).
The developer used the same NZ$1 ($0.80) reserve price strategy in February this year, taking three apartments in another Auckland development to auction.
The first property, in Papatoetoe, sold for NZ$570,000 ($457,451) after 68 bids, which was well below its NZ$790,000 ($634,011) council valuation.
Two neighbouring homes followed, selling for NZ$580,000 ($465,477) and NZ$588,000 ($471,897).
Kathuria said there was a difference in the types of buyers attending the two auctions.
“Last time we had more traders, but this time we had more investors,” he said.
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