Why upgrades unlikely to add value to gang pad

Home improvements to the Christchurch Head Hunters gang pad contributed to its forfeiture, but they are unlikely to add much value to the property when it is resold.

This week the High Court ordered the forfeiture of the gang’s 31 Vickerys Rd, Wigram property to the Crown under the criminal proceeds act.

The Head Hunters had owned the property since taking it over from the now defunct Epitaph Riders motorbike gang in 2015, and had carried out renovations on it from 2016 to 2018.

Crime-funded spending on the renovations, which included a new bathroom and kitchen, a well-equipped motorbike repair workshop, a bar and lounge and new sleeping accommodation, contributed to the police’s case.

But the renovations, which a quantity surveyor estimated to have cost about $180,000, had not boosted the value of the property much. CoreLogic put the property’s value at $530,000. That was well below the median value of the suburb and the city.

There had been an increase in the property’s value since it was last officially sold. According to Homes.co.nz, it sold for $259,000 in July 2011, but the housing market had been on an upwards trajectory since then.

CoreLogic head of research Nick Goodall said title information had the property with three bedrooms and one bathroom, but any renovations that had not required building consents or had not been signed off by the council would not show up.

Any extra value added by the renovations would not be reflected in current figures, and a valuation of the property would be required before it was resold, he said.

‘‘Title information shows it has space for five car parks which suggests a lot of space, and is on a level 900m2 piece of land. It is also across the road from a park. Those are attractive features.’’

But any potential buyers who had done thorough research were likely to be aware of the history of the property, and that could impact on their view of it, he said.

University of Auckland senior property lecturer Michael Rehm said it was not uncommon for properties that had been the centre of a violent crime to be defaced.

That was probably because people were uneasy as they did not know what had happened in the house, he said.

‘‘It is possible similar stigma could be attached to a former gang pad, but there is no research in this particular space.

‘‘But you could see a property investor, or developer, snapping it up for the section, bowling over the existing house, and putting up some townhouses on it.’’

Overseas research suggested the prices of houses where a murder had taken place fell initially, but the stigma did not last long, and reductions disappeared after a few years.

Real Estate Authority lawyer Phirak Appleton said the authority could not comment on the specific circumstances of a property.

But, in general terms, an agent selling a property on behalf of police, would have to comply with their obligations in the Code of Conduct, he said.

‘‘An important obligation is the disclosure of property defects, and that they treat all parties fairly. Whether there are sensitive issues to disclose would be considered and dealt with on a case-by-case basis.’’