House with no toilet sells for $2m as New Zealand property market soars

A decaying three-bedroom house with no toilet or bathroom, missing walls and an overgrown garden has sold in New Zealand for more than $2m (£1m), in the latest example of runaway property markets around the world.

The 1920s-era bungalow on Ariki Street, in Auckland’s affluent suburb of Grey Lynn, sold at auction on Thursday for $2.075m (£1.05m), after the bidding opened at $1.75m, Stuff reported.

Auckland council’s property valuation page estimates its value at $1.65m and that the property requires $200,000 worth of improvements.

The Barfoot & Thompson real estate agent listing described the house as a blank canvas in need of urgent attention and was “the most affordable character entry to home ownership available in Grey Lynn”.

The property is classed in the “single house zone” under the city’s unitary plan – the plan that determines how areas in the city are used, developed or protected – and is prevented from multi-unit development.

Barfoot and Thompson’s auctioneer, Campbell Dunoon, told Stuff that such properties were highly sought after.

“People who I would call traditional retail buyers would in the previous years buy a property to move into are now buying a property to do up and then move into.”

“There are certainly more people like that.”

New Zealand has one of the hottest property markets in the world. The most recent data puts the average house price at a record-breaking $943,000 – a 22% increase from June last year. Its figures show Auckland’s market remains the hottest, with average prices now sitting at $1.5m. Grey Lynn’s average price is higher still – nearer to $1.6m.

The country’s housing affordability crisis has been building for over a decade, and has worsened significantly over the past year. Years of tax-free capital gains drove a thriving investor market that often priced out owner-occupiers. More recently, the issues with affordability and regulations that constrain urban supply have been compounded by ultra-low interest rates, and a faster-than-expected economic recovery from the pandemic. Auckland is now considered one of the world’s least affordable housing markets, with median house prices around 10 times median income.

In March, the government announced a series of billion-dollar measures aimed at reining in the runaway market.