The authorities in New Zealand have decided to investigate the sale of two neighbouring properties which were said to have changed hands on five separate occasions in just four days. At this moment in time there is no suggestion of any illegal activity but it is rather bizarre to see one property change hands three times and another change hands two times within a very short space of time. On the surface it is quite right that the New Zealand authorities are investigating this bizarre property trading but behind-the-scenes things look very different!
Trading New Zealand property investments
The story begins with the acquisition of two properties on Coronation Rd, Mangere by a developer known as Sha Liu. The properties were then said to have been sold to a developer by the name of Treasure Plus for approaching $5 million in August 2016. This is where it begins to get interesting because the properties had only been acquired four days earlier with the sales crystallising a combined profit of $500,000.
One of the properties, a bungalow, also changed hands yet again with official documents suggesting it changed hands twice in one day. The fact that there is legal paperwork and a paper trail suggests that everything is well above board but these trades have certainly hit the headlines. Why was there such strong demand for these properties?
Unitary Plan
Those who follow the New Zealand property market may be aware of the Unitary Plan which was introduced by the Auckland authorities. In a nutshell this allows some properties to be demolished and the land used to build 10 separate dwellings. Yes, some of the more luxurious properties in New Zealand could well be demolished and the land surrounding them be more fully utilised with the development of much sought-after homes.
The authorities confirmed that the properties on Coronation Rd, Mangere were not heritage sites and therefore the new owners could make use of the Unitary Plan. When you bear in mind some of the land surrounding larger properties in the more luxurious markets of New Zealand we can only imagine the potential value if this land was fully utilised. This comes at a time when demand for property in New Zealand is starting to cool but cooling from record levels. In reality there is still significant support for the market.
Political interference
If this is not an example of political interference in the real estate market then what is? This comes on the same day that some Indian property investors accused the Indian authorities of unwanted “meddling” in the Indian real estate market. The fact is that politicians, federal and local governments, are in a position of extreme influence when it comes to property, business, local economies, etc.
Whether the local authorities in Auckland will review the Unitary Plan remains to be seen but the fact is that while two properties changing hands five times within four days is not the norm, it is perfectly legal. Local authority policies have in this situation encouraged speculative investment in the property market – whether the politicians like it or not.