Two neighboring houses in Auckland were sold an astonishing five times within the span of four days, prompting an investigation into house flipping in New Zealand’s largest city, where the property market appears to be booming.
The Guardianreports that the houses in south Auckland’s Mangere Bridge suburb were just one example of an emerging trend in New Zealand that is causing prices to skyrocket amid the expansion of big developers.
The practice of house flipping typically refers to properties sold at least twice within a year, making the unusually high Auckland turnover rates alarming for regulators. Some 1,831 properties in the city were sold more than twice last year, according to figures first reported by the New Zealand Herald. Of those, 74 were reportedly flipped within a single month.
For more on housing regulations, watch Fortune’s video:
In some cases the property values nearly doubled on resale. The price tag on one Victorian homestead shot from about $1 million to $1.7 million in just six months, the Guardian said. The buyer, Chinese-owned property investor Treasure Plus, also reportedly bought the house next door and plans to demolish both to make way for townhouses.
The Herald reports that the firm claimed to have no knowledge of the prior transactions, but the rapid-fire sales set off alarm bells for the city’s real estate authorities.
“Any time transactions take place very quickly you have increased concern to make sure all parties are fully informed of the decisions they are making,” the Guardian quoted Kevin Lampen-Smith, head of the Real Estate Agents Authority, as saying. Industry watchdogs will reportedly launch an inquiry into the Treasure Plus sales and another property that may be vulnerable to demolition despite having potential historical value.
