Auction wrap: iProsperity CFO takes big loss on $10.52m Mosman mansion sale

A luxury home in prestigious Mosman sold at a big loss on its weekend offering.

The $10.52m paid for the four-bedroom Fairfax Rd, Mosman, offering was $880,000 less than last time it sold in 2017.

A luxury home in prestigious Mosman sold at a big loss on its weekend offering.

Despite rapidly rising house prices across the nation, the perils of overpaying during past frenzied buying periods were reflected in the outcome.

The $10.52m paid for the four-bedroom Fairfax Rd offering was $880,000 less than last time.

It had bought for $11.4m in 2017 by the carefree Harry Huang, the chief financial officer of the now collapsed property group iProsperity, from Arjen Lugtenburg of the fund manager Allan Gray.

The “custom designed, no expense spared” home sold under mortgagee instructions came with 536sq m of internal living space and views across Middle Harbour toward Clontarf Beach.

Significantly, 2017 was a peak year for Mosman sales to buyers of Chinese descent, with records putting their acquisitions at about 30 per cent of its home sales above $5m.

The year saw 24 of Mosman’s 80 house sales above $5m involving buyers of apparent Chinese descent, up on the 15 of 64 buyers in 2016. In 2018 it dropped to nine of 72 sales, and to 14 of 69 in 2019. There were just 12 sales with buyers of Asian descent of the 79 sales across the 2088 postcode last year.

The 2017 surge came despite the introduction of state and federal taxes for foreign buyers, along with increased difficulties getting money out of China.

At the time veteran Mosman agent Kingsley Yates advised that Chinese buyers were “here in their truckloads” as “Chinese buyers believe the Mosman market is very undervalued compared with the eastern suburbs”.

The iProsperity founder Michael Gu, who also fled Australia last July, leaving company debts of some $350m, was another 2017 Mosman buyer.

Gu’s house sale escaped a loss when sold by his lenders last November.

The 10 Superba Pde offering fetched $12m, which was $2m up on its 2017 purchase price. PIMCO boss Robert Mead was the buyer with Gu’s creditors left arguing over the $12m house sale proceeds before NSW Supreme Court judge Richard Button.

It was sold by lender Credit Suisse, but ongoing dispute among 10 lenders as to priority will soon see Button work out “how the pie is divided and what order”.

IProsperity was one of the biggest players in the federal government’s Significant Investor Visa program which saw wealthy foreigners granted fast-tracked residency visas.

Menghong (Michael) Gu and Zhou Xiang (Harry) Huang are believed to have fled to Los Angeles, with Gu’s conduct reported by liquidators to the Australian Securities & Investments Commission.

Sydney selling

Some 812 homes were taken to auction across Sydney this week, returning a preliminary auction clearance rate of 86 per cent. Last week a higher 844 auctions were held with an 85 per cent final clearance rate and one year ago 830 auctions took place with a 75 per cent success rate achieved, CoreLogic noted.

Sydney’s second highest weekend sale was $7m through Fayez Yammine at Devine Real Estate for a waterfront in Abbotsford overlooking Hen and Chicken Bay.

The three-level parkside 25 Abbotsford Parade holding had sold at $5,215,000 in 2015. It remained unrenovated, reflecting 5 per cent annual price growth for the vendors, the Wei family.

Sydney’s cheapest sale was $364,000 at Liverpool for a three-bedroom unit. The price guide from Alive Realty agent Mark Sawyer had been $355,000.

Its sale price reflected a 6 per cent yield, given it has been a $425 a week rental.

Melbourne down

The Labor Day long weekend in Melbourne, and three other states and territories, kept auction volumes down. There were 477 Melbourne homes auctioned this week, down on the 1299 in the prior week. Of the results collected so far by CoreLogic, 80 per cent were sold. The final clearance rate last week came in at 76 per cent, which was well up on the 66 per cent success rate the same time last year, when volumes were at 418.

21 Thomas Street, Kew.

Melbourne’s top sale was in Kew where $6.4m was secured for a four-bedroom 1928 home on a 1314sq m Thomas St holding with a clay tennis court.

The house, known as Avignon, was designed in the French colonial style by the Hasse family who went back to France in the late 1940s. The house comes with a distinctive exterior of richly textured rendering, arched windows and stained glass windows.

There were four registered bidders at the Ray White auction with a pre-auction $5.6m to $6m price guide. The reserve was advised as $6.1m.

It had previously traded in 2018 for $5m, after seven decades of ownership. The buyers plan to knock it down to build again, while keeping the court.

“There were three local Chinese families and one Australian family,” selling agent Helen Yan said. It was sold to a local Chinese/Australian family, Yan confirmed.

Auction action

There were 1587 capital city homes taken to auction last week. Of the 1311 results collected so far by CoreLogic, 84 per cent have reportedly sold. Final figures on the prior week saw its preliminary clearance rate revised down to 79 per cent.

All of the smaller capital city auction markets saw over 80 per cent of auctions successful with Canberra at 91 per cent, followed by Brisbane (82 per cent), Perth (81 per cent) and Adelaide (81 per cent).

Canberra’s 36 weekend results saw a record Farrer price after a five-bedroom home fetched $2.21m through Mario Sanfrancesco at Blackshaw Real Estate. It had last sold at $1.11m in 2012.

The home at 125 Hawkesbury Crescent exceeded the suburb’s prior top price by $110,000, given a $2.1m sale on the same street last October.

Cheap and cheerful

The nation’s cheapest weekend result was $230,000 at Morayfield, set between Brisbane and the Sunshine Coast. It went just before auction. The 28 Kenneth St, Morayfield home came with three bedrooms and one bathroom on its 622sq m corner block. There was a downstairs storage room.

“This is exceptional buying and will most likely be Morayfield’s best buy of 2021,” selling agent Jamie Wyvill advised.

It last sold at $67,500 in 1998, according to CoreLogic.

50 Queens Road, Sorrento.

Easter eggs them on

Agents have now locked in their pre-Easter spike in early autumn auction listings, with the weekend before the early April holiday break typically one of the busiest of the year.

Some coastal properties are held back for the actual Easter period, especially on the Mornington Pensinsula.

There’s a contemporary Sorrento offering listed through Jellis Craig agent Andrew Macmillan with $4m to $4.4m hopes for its April 3 auction. It’s a classic coastal Norwood Constructions-constructed home on a 1761sq m lot. The six-bedroom home, with bluestone pool surrounds, comes with outdoor shower and powder room.

There was a nearby $4.4m Queens Road sale last month.

The pensinula’s popular boatsheds appear to be sparsely offered this Easter.

There’s so far just the one which has $374,000 hopes at Blairgowrie for bathing box 41.

Bathing box 41 at Blairgowrie.