Cheap homes, but price only part of the picture
Got $55,000? In Auckland, it might not be enough to serve even as the deposit for your first home. But in other parts of the country, it could buy you a whole house (with a few strings attached).
Trade Me has revealed the top 10 cheapest properties currently listed on its website.
The list does not include houses that might sell yet cheaper but are for sale by negotiation or will be sold at auction.
Top of the list were three leasehold properties, one in Greymouth, one in Papanui and one in Lake Ellesmere (which comes with its own jetty). These were all listed for $55,000. ‘‘Leasehold’’ means that you have to pay rent for the ground the house stands on. In Greymouth, that’s $2420 a year fixed until 2024.
The cheapest in Auckland were three homes on one leasehold section, selling for $95,000. There, the kicker is the ground rent of $68,000 a year, fixed until 2035.
Economist Brad Olsen, of Infometrics, said the price of a leasehold house would look artificially low, given the true cost of owning and maintaining the property. ‘‘You’ll still have to pay rental figure for use of the land, and land costs continue to get more expensive.’’
Second-cheapest was a house and its own 506sqm section in Patea. This property is listed for $85,000.
Olsen said West Coast or
1. Leasehold house in Greymouth – $55,000
2. Leasehold in Papanui – $55,000
3. For Duck shooters in Lake Ellesmere – $55,000
4. Patea house with a big section – $85,000
5. Leasehold property in St Johns Auckland – $95,000
6. Doer-upper in Buller – $95,000
7. Taupo Road in Taumarunui – $99,000
8. Completion required in Taumarunui – $99,000
9. High St in Greymouth – $99,000
10. Very old school in Buller – $100,000
11. Investment in Murupara? – $109,000
12. 3 bed, 1 bath in Cobden, West Coast – $115,000
13. Leasehold in Greymouth – $115,000
14. A church in Blaketown on the West Coast – $120,000
15. Cosy spot in Buller – $120,000
16. Leasehold unit in Napier – $120,000
17. Go fishing in Temuka – $125,000
Taumarunui properties tended to be cheaper but the areas had ‘‘mixed to poor’’ economies and would be likely to have older and more rundown housing.
‘‘The latest Infometrics Quarterly Economic Monitor shows that the West Coast economy was the only regional economy to decline over the last 12 months – a 1.4 per cent per year reduction in economic activity according to our provisional estimates.
‘‘Taumarunui is similar, with Infometrics estimates showing a 0.8 per cent reduction in economic activity over the 12 months to March 2018 – for smaller areas we don’t have the same ability for more current economic activity estimates.’’
All up, Trade Me had 17 properties for sale with listed prices below $125,000.
Bindi Norwell, chief executive of the Real Estate Institute, said buyers should be cautious.
‘‘If the price of a property looks too good to be true, then it’s probably that low for a reason. It’s imperative that you do your research before buying a property so that you can understand whether you’re actually getting a bargain or whether you’re going to end up spending significant amounts of money on the property.’’
She said a property that looked to be a bargain might need a lot of money spent on fixing problems such as weathertnightness.
‘‘Or it could be that the foundations are cracking, and the property needs to be re-piled.’’
Sometimes significant renovations were needed that could add tens of thousands of dollars – or more – to the cost of a house.
‘‘There are plenty of examples of where an owner has lived in the property for 60 years and everything is still original, from the wallpaper to the bathrooms and everything in between.’’
Other times it might be in a less desirable or accessible spot. Sometimes it could be a genuinely good price if it was being sold by the estate of someone who had died or if the owners had divorced and wanted to move on quickly.