A LOSS of $4.5 million in only two years on a Gold Coast mansion tells the grim story of the diving property market on the coast.
The “Beach House” at No 247 on the glamour strip of Hedges Avenue on the beachfront near Surfers Paradise was sold at auction last weekend for $5m.
Melbourne investors John Rose and Timothy Rice bought the three-level mansion for $9.5m in February 2008, but it has been on the market since the end of last year.
The house went to auction in January this year with bidding starting at $5m and quickly rising to $6.25m, at which time Mr Rice raised the selling price to $6.45m.
If he’d have taken the $6.25m on offer in January he would have been $1.25m better off, and probably saved himself the hassle of a year waiting expectantly for the market to recover at a time when it kept going down.
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In August, the owners and agents were again over-optimistic about the strength of the Gold Coast high-end market, with the house listed for sale at $7m. The property’s history over the past decade charts the high-end Gold Coast market well.
It was bought in 1998 by Gold Coast shopping centre developer Norm Rix for $1.815m, and he sold it in 2003 to Canberra developer Barry Morris for $5.35m.
In September 2007, the house was sold to then 26-year-old IT tycoon Daniel Tzvetkoff for $10.25m, but he kept the house for only a matter of months before selling it in February 2008 to Walnut Peak, a company controlled by John Rose and Timothy Rice.
They probably thought they were getting a good deal by buying it at $750,000 less than Mr Tzvetkoff had paid for it only six months previously, but in retrospect Mr Tzvetkoff had form in paying well over the going price.
He sold 247 Hedges Avenue because he bought further up the avenue for $27m, but 2008 was the end of the good times for the man who that year made Business Review Weekly’s young rich list with an estimated fortune of $120m.
Mr Tzvetkoff was arrested in April while at a Las Vegas internet billing conference and, if convicted, could face a 75-year jail term over an alleged $500m money laundering scheme.