Auckland house prices are on a tear, launching 24% over the past year, according to the REINZ:
With the house price-to-income ratio in Auckland reaching an astonishing nine times incomes:
As noted by the RBNZ earlier this week, part of this price growth has been driven by surging demand from investors.
An extreme example of this speculative investment has been provided by Stuff.co.nz, which profiles a basic Auckland home that was flipped four times in three months, achieving a total increase in value of $153,000:
The three-bedroom home in Henderson was sold by its owner of three years Sue Wilson to Xiaoli Zhen in May for $475,000, only for it to be sold again to a trust just weeks later for $522,500.
The trust then flipped the Bruce McLaren Rd property again earlier this month for $559,000, according to CoreLogic data.
Most recently the house was listed last week by Barfoot & Thompson and was sold for $628,000…
The former owner of the house, Sue Wilson, told the New Zealand Herald she bought the cross-lease property at 1/161 Bruce McLaren Rd in 2012 for $291,000.
Wilson said the fast turnover and escalating price of the property, which was advertised as a “first home or investment”, was shutting first-home buyers out of the market.
“I was horrified. What annoyed me most was we’re trying to get young people into houses and this sort of thing is going on with them bumping up the price,” she told the New Zealand Herald.
Neighbours told the newspaper the property sat empty during July and value was not added through renovations or improvements other than professional staging.
What complete and utter madness.