Auction ordered at Mount

More than 50 luxury apartments in a popular beach spot will go under the hammer as a single package, after a plush new development failed to attract buyers during the recession.

The newly completed Pacific in Mount Maunganui has sold just 15 of its 68 apartments.

The main funder for the $60 million development, Westpac bank, has run out of patience and called for the remainder to be sold in one lot at a mortgagee auction in December.

Property developer Philip Lindsey told the Herald more than half of the apartments had initially sold off the plans, but many buyers pulled out due to financing problems.

He said his company had become caught in the middle of the two funders, Westpac and secondary receivers Dominion Finance.

Dominion, which is in liquidation, provided some of the money to buy the original site, which included two motels. Mr Lindsey said he was "frustratingly close" to paying off a loan from Dominion.

He said he was looking to buy back all 53 apartments so he could capitalise on an improving housing market.

"This is the prime selling season in the Mount, and we've lost two good months of selling because of the financing situation.

"I want to finish it. I'm not looking to make a quick buck like some other developers. Unless somebody else is prepared to pay more than me, we should be back in business soon."

Bayleys senior commercial agent Robert Platt, who is managing the auction in Auckland, said that apartments would not necessarily sell at bargain prices.

"The prices will be determined by how people see the product going forward. It's like a number of properties over the past 18 months ... where the market demand was just not there. But an auction will flush out the buyers," he said.

When construction on the Pacific began two years ago, Mr Lindsey offered apartments which had the quality of a four-and-a-half star hotel and stunning views of the peninsula.

The 11-storey building sits in the middle of the Mount's shopping and entertainment area and boasts views of Pilot Bay and the main beach.

The apartments, which range in size from 55sq m to 441sq m, have floor to ceiling windows and sprawling balconies. Of the apartments already sold, prices ranged from $385,000 for a studio to $1.65 million for a three-bedroom suite.

The auction includes the Number 8 cafe on the ground floor, and a conference room. The 441sq m penthouse is priced at $5.7 million.

At neighbouring development Eleven, which opened three weeks ago, only 35 out of 65 apartments in the $125 million building have sold.