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NZ – Granny Flats the New Hot Sellers posted on the 21st November 2014
Ipswich Granny Flats bringing you an up date on whats happening in NZ as part of the worldwide Granny Flat phenomena…
Anne Gibson
Property Editor, NZ Herald
24 October 2014
Low Maintenance Granny Flats Popular with First Time Buyers.
Single-level Auckland brick-and-tile units are fetching record sums, often double the capital values assessed three years ago.
Auckland could have at least 100,000 such properties, a somewhat unloved segment of the market often labelled sausage blocks or granny flats.
Loan-to-value ratios quelling purchases of stand-alone houses are thought to have driven up prices.
So too have the rapidly rising value of the large sites they stand on, banks’ appetite to lend on such properties, lack of weather tightness issues and the enduring nature of the materials they are made of.
Sales of the utilitarian flats, often built in the 1950s and 1960s replacing single older homes on the site, are taking off as they foot it with classy villas, restored bungalows and cute cottages, a target for investors and first-home buyers.
Antonia Baker, director of The Property Market real estate agency, cited six brick and tile and unit sales which she said showed how far the market had moved lately.
“People called them granny flats because older people used to live in them and they called them sausage blocks due to the view from above. They looked like a sausage cut into wedges.
“I do think they’re having their hour. I think it’s that landlords have been attracted to them and where you’re looking at a market where the house-and-land option is out of reach for most buyers, all of a sudden people are looking at cheaper stock.
“This ticks that box and it makes the bank happy because they’re nice and solid, low-risk option for people coming into the market,” Ms Baker said.
Martin Dunn, City Sales managing director, said his firm was desperate for North Shore brick-and-tile two-bedroom units for its new City Sales Investment scheme.
“Fourteen years ago, these places were selling for $80,000 to $110,000 and I’m not at all surprised to hear of one going up $200,000 in two years. We’re struggling to get enough of them. They’re fantastic properties to own. A business set up by two guys in Auckland – Franchi and Ion – built thousands of them in the 60s and 70s. They don’t leak, don’t give problems, are good investments because they tend to be on good, big sites,” Mr Dunn said.
Ms Baker said first-home buyer families might stay only a short time, then shift to something bigger after the first baby arrived.
She sold one two-bedroom unit for $320,000 more than its CV last month. Vendors Samantha and Andrew Ketchin bought it in 2012 for just over $460,000 but had to put in a new bathroom and kitchen, and painted and restored floorboards.
“But they didn’t spend hundreds of thousands of dollars on it. They did do a nice job,” she said of the $200,000-plus gain for the couple, who have now moved to Europe.
The 74sq m place has a single garage but demand was so strong that desperate buyers are being forced to pay the big prices.
“Units have always been the savvy investor’s stepping stone on to the property ladder and in areas like One Tree Hill where the average sale price is around $715,000, they make more sense now than ever,” she said.
“Buyers and banks see them as solid and trustworthy stock and a good all-round investment.
A brick-and-tile unit on Pt Chevalier Rd went for $678,000 despite being on a busy road. Ms Baker said the price showed the popularity of that type of property.
“Maybe only three years ago, bigger places were selling on quiet side streets in the mid-$500,000s,” she said.
Other agents said brick-and-tiles in Mt Eden, Kingsland, Waterview, Pt Chevalier and Sandringham were so popular they couldn’t get enough stock.
But one lawyer said beware. Joanna Pidgeon, a partner at Pidgeon Law in Auckland, said many brick and tiles were on cross-lease sections and she knew of some dreadful situations and court battles between neighbours.
Owners sometimes forgot, or did not know, they needed neighbours’ permission for major building work.
Andrew King, Property Investors’ Federation executive officer, said loan-to-value restrictions locked many young families out of the market for stand-alone houses so they had turned to brick-and-tile units.
“You can do them up in a weekend. Investors love them. They’re wonderful.”
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