KEY POINTS:
In one of the most conspicuous signs of the property market's downturn, a grand St Mary's Bay mansion has gone for about half its market valuation.
The two-level colonial weatherboard house with an adjoining section at 11 London St is valued by QV at $5.3 million.
But a buyer has just snapped it up for less than $2.65 million.
The house is above the motorway, with sweeping waterfront and harbour bridge views, sitting on a large site which has resource consent for two other dwellings.
Pene Milne, of Premium Real Estate in Herne Bay, staged a Dutch auction on the house where prices started high and then dropped.
Bidding started at $5 million and then dropped rapidly, sometimes in $500,000 stages, she said.
The calls stopped coming at $2.65 million.
Negotiations subsequently resulted in an unconditional sale.
Pene Milne encouraged people to view the result as excellent because she said many other agencies had listed the place this year without selling it.
Getting an unconditional deal in a market like this was a great result, she said, refusing to disclose the final price.
The buyer was a Kiwi who did not live in Auckland.
She said the Dutch auction had worked well because it was an unusual technique which flushed out people who had previously not expressed an interest in the house, she said.
The house was sold by Takapuna Village, a company owned by North Shore developer Rick Martin who built the 30-level Sentinel Tower in Takapuna.
He bought the St Marys Bay property from international businessman Mike Panjwani as part-settlement on the two-level $11 million Sentinel penthouse.
Mr Panjwani did not settle the deal to buy the penthouse and that left Mr Martin with both properties.
Meanwhile, a senior real estate official has questioned QV valuations.
Mike Pinkney, a Real Estate Institute board member and agent with 38 years of experience, said the new council valuation of his own property was $300,000 above market value.
Mr Pinkney blames low volumes of house sales on QV ratings which he says mislead vendors into expecting high prices which buyers will not pay.
"People base decisions worth multiple thousands of dollars on [QV valuations], deciding what they will sell for or deciding what they will pay instead of getting a real valuation done for around $400, which includes home inspection and takes into account current market value," he said.
