Auckland development with 15 townhouses listed for mortgage sale

An Auckland development of 15 townhouses has been put up for sale in a mortgage auction.

The TradeMe ad for the Sunnynook Central development auction in Totara Vale is looking for a developer to complete the project, and existing townhouse buyers appear to have been taken by surprise.

The incomplete Sunnynook Central <a class=townhouse development in Auckland will be auctioned off by mortgagees in April.” style=”width:100%;display:inline-block”/>

Abigail Dougherty / Stuff

The incomplete Sunnynook Central townhouse development in Auckland will be auctioned off by mortgagees in April.

Barfoot and Thompson seller George Fong said a development financier triggered the auction from mortgagees after the developer was unable to make repayments.

The promoter, Sunnynook Central LP, was approached through its lawyers.

READ MORE:
*Here’s where real estate investors would buy right now
* “Shattering injustice” to mother and daughter delays sale of mortgagee in Kaikōura
* The advantages and disadvantages of mortgage sales

Auckland property developer David Whitburn, former chairman of the Auckland Property Investors Association, said he expected more developments to face mortgage sales due to rising costs, delays on construction materials and a tightening of loans driving prices down.

Fong said he had received a call from a buyer in development since the listing appeared on Tuesday, asking what had happened.

He said there had been a number of inquiries from interested buyers. The property would be auctioned on April 20.

Townhouses included two-, three-, and four-bedroom layouts.

10 townhouses registered as sold

The Barfoot and Thompson sales site for the development suggested that 10 of the 15 townhouses had been sold.

Seller Jeremy Mi said he was unsure how many properties sold or what happened during development.

“Everyone asks me the same questions today, and I have no idea what’s going on,” he said.

When asked if buyers would get their deposits back, he said he didn’t know.

“I tried to contact the seller and no response, so I can’t tell you anything.”

The developer expects more failed developments

Auckand property developer David Whitburn says developers who build thinking sales will be easy could find themselves in a sticky spot.

Thing

Auckand property developer David Whitburn says developers who build thinking sales will be easy could find themselves in a sticky spot.

Whitburn said he suspects Sunnynook Central’s problems may have been caused by a general withdrawal of Chinese lenders from the development space.

It was likely that the developer had paid a high price for the site at the height of the last building cycle and was now struggling to recoup the cost, with the cost of materials rising and credit crunching due to ratio restrictions loan-to-value. and new rules on credit agreements and consumer credit law.

Sunnynook Central purchased the property in mid-2018, according to title records.

“I never like to see someone fail, but unfortunately there are many reasons for that,” Whitburn said.

Mortgage sales had been rare lately, but he expected to see more.

“I think some of it will come from builders doing what I call specific homes – that is, homes that they don’t have a buyer for, or it’s not a build. contract where they build on someone’s behalf.

“They took the risk of buying the land and then having the building built in the hope of reselling it with a big profit.

“With the difficulties in getting certain types of rubbers and gib boards, those dreams are pushed back and holding costs are unfortunately still being charged, so there’s some pressure,” Whitburn said.

He didn’t expect a flurry of mortgage sales, as there were plenty of checks in place to ensure developers were going ahead with their projects and there were still plenty of eager buyers in the market.