'Do-up' state houses fetch millions

30 Dickens St: $9995,000. Photo / Steven McNicholl.

Two Grey Lynn state houses deemed "past their useful life" by Housing New Zealand have sold for about $1 million each.

Estate agents say the price tags on the do-ups, both sitting on 480sq m sections, reflect what house-hunters are willing to pay for prime land in the sought-after Auckland suburb.

In the past year, HNZ has sold 15 properties in the city worth more than $700,000, generating $12.8 million.

A three-bedroom villa at 39 Millais St, which had a council valuation of $840,000, sold for $1,006,000 at auction.

Photos taken inside show chipped paint on doors and skirting boards, stained carpet, missing windows and kitchen cupboards, exposed pipes and old plumbing fittings and appliances.

The house has one bathroom, a separate toilet and a large west-facing backyard but no garaging.

An advertisement says it "is ripe for the picking and awaits your imagination and flair" and "is the perfect place to create a dream home for you and your family".

Another state house nearby, 30 Dickens St, sold for $995,000, and had a council valuation of $810,000.

Photos inside show ripped carpet exposing floorboards, stained walls and floors, loose wires hanging from the ceiling and a bathroom hand basin covered in stickers.

Described as a "Grey Lynn gold mine", the four-bedroom villa has one bathroom and a separate toilet.

The listing warns potential buyers: "Not for the faint-hearted, bring your hammer and nails and plenty of imagination. Calling builders, developers, first-home buyers."

Grey Lynn house prices are up 17.9 per cent from previous highs in 2007.

A spokeswoman said HNZ had sold the houses as part of its policy to look at getting rid of properties worth more than $700,000 so it could reinvest in cheaper housing.

"Both were very old properties - almost 100 years - and for this reason had passed their useful life. With Millais St there were also significant maintenance issues and this work was simply uneconomic to undertake given the age of the property. In relation to the location of some of these high value homes, as you would expect, they tend to be found in the eastern suburbs of Orakei, Kohimarama, St Heliers, Remuera and inner-city areas of Westmere, Grey Lynn and Ponsonby, as the high value in these locations is always in the land, not the house."

The most expensive state property sold in the year to June 30 was a two-bedroom home at 39 Spencer St in Remuera. The house, sitting on 683sq m, sold in June for $1.3 million - nearly double its valuation.