KEY POINTS:
Bargain hunters chased eight Auckland apartments auctioned yesterday, and they got deals which cost the vendors at least $670,000.
Vendors are having to discount their places heavily to reach buyers' expectations, as high interest rates, a plentiful supply of units for sale and talk of a looming recession have dampened enthusiasm.
But now investors are beginning to see dollar signs instead of trouble in the units which are going for a song.
City Sales' fortnightly apartment auction drew about 100 interested buyers, a big turnaround after poor crowd numbers and lacklustre interest during the past few weeks.
"We thought we'd be twiddling our thumbs for the next six months," agent Andrew Bond said after the auction.
Instead, staff were scrambling to find enough chairs for the bidders, reserves were quickly reached, price calls came fast and seven out of the eight units sold in City Sales' most successful exercise this year.
Only a heritage apartment in the popular Whitcoulls building on the Queen/Victoria St corner was left unsold after bidding got to just $260,000 and failed to meet the vendor's reserve.
Blue Chip investors sold two units and suffered heavy losses. The vendor of apartment 303 in Grafton's Madison House lost $233,000 after getting just $157,000 for the unit bought off-the-plans. Another Blue Chip investor sold a unit in The Beach, under construction, and lost $97,000.
Some units were bought earlier this decade after investors attended seminars run by property investment specialists. Other units were bought sight unseen off-the-plans and vendors are having to slash their prices to snare buyers.
Auctioneer Neil Newman told the crowd that reserves had been set well beneath previous purchase prices.
Apartment 32c on Gore St's Harbour City fetched $141,000 less than the vendor had paid. It went for just $354,000. Units in that 40-level downtown high rise had been fetching up to $400,000 or more previously.
* City Sales' next auction is on April 2 at Hopetoun Alpha, Beresford St in Auckland.
