Panic sale warning as houses go for a song
Bargain hunters are snapping up damaged Christchurch properties, prompting a warning to owners not to sell for fire sale prices.
Properties with damaged but liveable houses are being advertised cheaply and some are selling to speculators and investors.
Recent fire sales have included a two-storey character Avonside house which fetched $157,000, the same as the rating valuation for the land only, and a house in Wainoni Rd which sold for $90,000 despite a $100,000 land valuation.
Advertisements feature enticements such as "free house", "no insurance, no EQC claim" and "owners just want out".
Valuers and real estate agents say the trend has developed in recent weeks, mostly involving homes on Technical Category (TC) 3-zoned land.
Some buyers are going without insurance and renting out the homes or living in them.
Harcourts agent Winton Royds already has a buyer and backup interest for one house he is advertising for close to the land price.
"It is damaged, but someone energetic could bring it back to a liveable or tenantable standard," he said.
"The floors are good and the house is pretty level."
Royds said many owners with insurance payouts were in a rush to sell and low mortgage interest rates had encouraged young buyers, especially, to go out bargain hunting.
"We are getting a new breed of entrepreneur. The enquiries keep coming in and if I had more of these I could sell them straight away."
Valuers Institute committee member Natalie Edwards advised owners with payouts on damaged homes to take their time and not panic-sell their biggest asset.
A house uneconomic to repair could still be a home for someone and have value, she said.
"Buyers are seeing an opportunity for an investment. One man's dead house is another man's rental investment.
"It's pretty low risk, really. That's why speculators are buying them. They can rent it and see how it goes, and the worst-case scenario is they have to demolish and rebuild."
Edwards said speculators were not out in force, but they had moved quickly.
Some were arbitraging the market and had bought and resold properties within days.
Red-zoner Walter Larason made an offer on a damaged and uninsured but sturdy St Albans house.
The asking price and his offer are both close to the land value.
"We'd been looking for a long time. There are so many people at open homes and there's a lot of competition," he said.
"It came down to finding something not so desirable that we could fix up."
Larason and his fiancee plan to do up the house, and may rent it out if they finish the job before they must leave their current home.