Apartment pain: Bought for $750,800, sold for $475,000

An elderly Orewa couple have lost almost $300,000 on the sale of their Auckland apartment as the property price slump spreads from shoebox investments to the luxury market.

In 2004, Cliff and Doreen Humphries bought one of 117 apartments off the plans for the Sentinel building in central Takapuna on Auckland's North Shore.

Using money from the sale of a Northland beachfront property, they paid $750,800 for the two-bedroom, ninth-floor apartment, with two car parks and sweeping views over the Hauraki Gulf. On Thursday they sold the apartment for $475,000 a loss of $275,800.

When they bought the Takapuna apartment they were living in a 57m2 apartment in Orewa and were looking forward to enjoying more space in the 85m2 property.

But when the Sentinel was completed the Humphries felt too settled to move again and put the Takapuna apartment, which has never been lived in, on the market last September, listing it for $799,000.

Doreen Humphries, 68, said she wasn't happy with the final selling price and estimated the couple's total loss on the apartment to be $300,000, including advertising.

"But we can't worry ourselves into the grave. We have to grin and bear it," she said.

Cliff Humphries, 73, said nobody liked losing that sort of money. "We wanted cash out of our property to enjoy life," he said.

"Oh Jesus, what a bargain," said Sentinel developer, Rick Martin of Cornerstone Group, when told about the sale.

He believed it was worth nearly double that price and said he intended to increase the asking prices on the remaining unsold apartments this week.

But there have been recent reports that some buyers have lost substantial deposits on Sentinel apartments because they have been unable to sell their existing homes in the current market.

The Reserve Bank has predicted house prices will fall 13% over the next three years a drop closer to 22% once inflation is taken into account. The national median house price has already fallen $12,000 between the market's peak in November, to June a drop of 3.4%.

The Humphries' apartment was one of eight in various locations auctioned during the week by real estate company City Sales.

The other seven apartments included in the auction all sold under the hammer and the auction room was packed with several dozen buyers.

Several bidders competed for all of the properties, indicating there was no lack of buyers in the market, but the prices they were prepared to pay were generally well down on what the vendors had originally paid in the past few years.

The speed with which most deals were concluded also indicates that vendors were resigned to the prices and were prepared to meet the market to achieve a sale.

A two-bedroom apartment with a car park in the popular Volt building on Auckland's Queen St, just a stone's throw from the Town Hall, sold for $238,000 compared with its original 2005 purchase price of $368,000.

Prices for apartments in student accommodation buildings fared even worse, with some losing almost two-thirds of their value.

Such developments have been popular with investors over the past few years because the individual units are often leased to a university accommodation service which rents them out to students and provides the owners with a regular rental income.

But their popularity appears to be waning.

A fully furnished studio in a student complex close to Auckland University, bought for $148,000 in 2004, sold at last week's auction for $55,000.

- © Fairfax NZ News