Press Release – Bayley’s Real Estate
A portfolio of former State houses in a small Waikato town have all been sold in a mortgagee auction to investors from across the region. State housing mortgagee auction sells entire portfolio
Adding some fizz to Paeroa’s residential property market – these former state houses are now set to deliver excellent investment returns for their new owners.
A portfolio of former State houses in a small Waikato town have all been sold in a mortgagee auction to investors from across the region.
The eight residences in Paeroa consisted of a mix of two and three-bedroom dwellings built in the 1950s on sizeable ‘quarter-acre’ sections. The homes sold under the hammer by Bayleys for between $64,000 and $90,000, and were bought by various individual investors from outside of the town.
With two and three bedroom units in the township renting for approximately $200 per week, the investment levels equate to rental yields of between seven to 10 percent. The houses were bought in 2008 by an Auckland property investor who paid in the region of $120,000 for each of the dwellings, with the mortgage held by Westpac.
Bayleys Waikato manager Stephen Shale said the 100 percent sales success of the Paeroa ‘renters’ highlighted there was still strong investment demand for residential property – even with many investors hanging off from entering the market until after the Government’s May budget.
Mr Shale said buyers came from throughout the greater Waikato region – from Pukekohe in the north to Tauranga in the east, with one buyer from Waiheke Island in Auckland picking up a residence. Two of the buyers bought multiple properties.
Mr Shale said the Bayleys website promoting the auction received a number of ‘hits’ from offshore parties, although none were among the telephone bidders who dominated the auction process held in Hamilton.
“Rental yields of seven to 10 percent are well above comparable investments in the likes of Auckland, Wellington or Christchurch, and show that by looking outside the square, there are plenty of excellent investment opportunities available in the residential sector,” Mr Shale said.
“A considerable amount of work had been undertaken on restoring some of the homes to their former original conditions – with new kitchens, carpeting and fittings. They actually looked quite smart. Unfortunately, some of the other dwellings were left in a sad state of disrepair by previous tenants – and this was obviously reflected in their lower pricing levels.
“However, lower social-economic towns like Paeroa will always have demand for rental properties, so from that perspective, they made sound investments. In fact, half of the homes sold have tenants in residency who are committed to staying in the properties.”
The Paeroa mortgagee sell down capped off a highly successful day for Bayleys real estate agent Karl Davis who handled marketing of the eight homes. Immediately before the auction began – and at the total opposite end of the real estate spectrum – Mr Davis in conjunction with real estate colleague Glen Tanner from Bayleys Coromandel, sold a three hectare lifestyle property in the Kopu-Hikuai Range.
The large family home on the property was finished to a high standard, and was set in bush with a stream running along the property boundary.
“Working with motivated vendors who have a sound understanding of where the property market is currently sitting, certainly helped get this deal across the line,” Mr Davis said.