The latest auction results suggest the housing market remains on a firm footing as it proceeds through winter.
Although the number of properties being offered each week at the auctions monitored by interest.co.nz, has steadily declined since mid-May, the average sales rate has improved.
The graph below shows the average weekly sales rates for all of the auctions monitored by interest.co.nz, from the week ending March 7, which was at the height of the peak summer selling season, to the week ending 27 June in the depths of winter.
This shows that at the beginning March, sales rates of 72% were being achieved, but from mid-March the sales rate began to decline and for all of April and May remained between 50% and 60%.
However, far from putting a dampener on sales, the winter weather has lifted them, with the weekly sales rate climbing back above 60% in June.
That suggests demand from buyers has remained firm over the start of winter.
Last week we reported on a strong result at Ray White City Apartments regular weekly auction of inner city Auckland apartments, where the sales rate was 89%.
This week's auction was smaller, but the sales rate was 100%, suggesting buyers are also returning to the apartment market, although vendors will need to be realistic on price in a market badly affected by changes wrought by the COVID-19 pandemic.
However, the overall results of the auctions monitored by interest.co.nz suggest that while the weather may have been a bit on the chilly side lately, conditions remain nice and toasty in the auction rooms.
Details of the individual properties offered at all of the auctions monitored by interest.co.nz are available on our Residential Auction Results page.
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30 Comments
If we can't win the World Cup Rugby. At least we have won the 'World's Bubbliest housing market'
https://www.bloomberg.com/news/articles/2021-06-15/world-s-most-bubbly-…
Hi Greg, Not to forget, this is after four months from reintroduction of LVR and tax changes and still Mr Orr is on wait and watch despite all data / news suggesting otherwise.
Two months back Mr Orr suggested that he had information / data suggesting that housing market is cooling, what data was he talking about as one visit to auction room confirms that housing ponzi is on rise in its full glory.
Has anyone asked Mr Orr what his source was that suggested that housing market is cooling, is the same source that is suggesting that inflation is transitory.
Horowhenua really cooling...only up 34.7% in 12 months and 10.1% in the last 3....Freezing here!
"The housing markets cooling and the mania has gone... Yeah right" - Tui billboard
The market is still pumping. new RV's due this month although they don't usually hit the news until about October which will result in the Council Websites crashing again under the stain of everyone trying to see their hyperbolic new value. Several factors in the pipeline now to keep the momentum going until March 2022. This government deserves a big round of applause from existing home owners for sitting around and doing nothing about it.
We have monitored inventory here for sale since start March 2021 , three areas , New Zealand available inventory down 15 percent, Auckland down 16 percent and Waiheke ( tourism /second home) down 30 percent. Globally real estate inventory for sale appears to be dropping almost everywhere. When linked to flow on /flow off there is no reason to believe that inventory numbers will not fall further. When it bottoms and turns who knows. There certainly has not been the expected forecast surge in listings .
Yes I agree. A lot of buyers with money to spend and next to no choice. Property prices rise / money becomes worthless.
Are people holding out to spring/summer to sell? Surely there's alot of people out there that want to move on - upsize/downsize/relocate/divorce etc. Or are people stuck where they are and can't afford to move...?
people dont sell houses anymore... you buy, get equity, move to the next, rent the previous one, use your equity in the previous one, salary and rental income to fund the next
"The average auction sales rate has increased despite the onset of winter"
The average auction sales rate has increased despite the onset of winter and despite half baked measures by Robertson and Mr Orr.
Now what Mr Orr....how long do you intent to wait and watch before stepping or still sick to move !!
stuart
"The average auction sales rate has increased despite the onset of winter"
To consider only this metric is cherry picking as to the state of the market.
Hard to be sure exactly what the market is doing just on the auction data here - for instance the big elephant in the room is what is the price trend at auction?
While success rates may be consistent, the consistent falls in auction listings is an indicator that the market is changing . . . . an indication that the market possibly isn't seen as being as competitive.
There are a lot of mixed data signals but I tend to agree with Orr that the market is cooling - which doesn't mean falling.
stuart
"Now what Mr Orr....how long do you intent to wait and watch before stepping or still sick to move !!"
In being anxious for Orr to act, you overlook that we are still in the midst of a global pandemic and the Wellington experience shows just how vulnerable to Covid we and our economy are. You need look no further than Australia to appreciate just how much risk and how fragile we are.
Government and Orr have done well to date in protecting our businesses and jobs . . . and that is not over yet. Our borders are closed, international tourism businesses and jobs have been decimated but GDP and employment have remained strong.
Printer8, if housing ponzi is only way for economy ponzi, somewhere some thinking is wrong.
House is one of the biggest basic necessity, which has been turned into casino chi.
Understand hard to change as people who should be taking decession have vested interest - corruption in different form.
Tension building up. Spectacular season coming. Be quick.
But the treasury and reserve bank forecast zero house price growth over the next twelve months...
Surely you aren't calling them incompetent?
Economist- a blindfolded darts player throwing at a spinning dartboard.
Brock
Incorrect: RBNZ and Treasury certainly did not forecast zero growth over the next 12 months.
Both RBNZ and, as stated in the budget, Treasury forecast some cooling but growth this year and then falling to 2 to 3% pa in the following two years.
So yes, CWBW’s assertion is supported by both RBNZ and Treasury.
Spring will be up again
When did it go for it to come back
Check this, a plaster cross lease house ( one out of three house) expecting 1.4 million plus ( CV840000) :
https://homes.co.nz/address/auckland/bucklands-beach/2-135-bucklands-be…
If this is not madness, What it is.
stuart
I see it first sold in 2007 for $501k.
Capital gains compounding that is around 6% p.a.
Although a tax free gain, as an investment it is not exorbitant as interest rates were around that for much of the time and there were costs of repairs, maintenance, insurance and rates.
Last year befor panademic a similar house ( not plaster like this one but with CV of 860000) very near to this house, went for 850000 and another good 2 bedroom house with CV of 940000 went at CV and this too was before panademic.
I see a normal two bedroom house on a cross-lease section in the auction results page that sold for 675k in Feb 2019 sold last week for just over a million, an increase of 51% in just over two years. It is a bit scary currently.
Stuart and Zachary
Yes affordability issues means it’s currently tough for FHB.
The most common posts on this site regarding housing is both about affordability and a likely or need for a correction.
While you highlight the increases over the past year or so, I find it a quirk that back mid to late 2019 when I and a couple of others were posting that market indications were for upside, we were rubbished . . . and that has been consistent over the past year.
Fortunately well over 100,000 FHB over the past two years bought and now enjoy those capital gains. In the past year of these house price increases you talk about, the number of FHB has been the highest since RBNZ first collected and published data back in 2014.
As to the future, there is no certainty as to where the market is headed but while RBNZ, Treasury and Robertson see a cooling of the market they still see some growth this year and the next few years.
So yes, while it’s tough, it seems that much wished for correction is unlikely according to Orr et al. If I was a FHB, then there is little I can do about that, but I would be looking at serious compromises and getting a foot on the property ladder.
For some like Nzdan that has meant a daily hour plus train commute each way - but that isn’t a life sentence.
For some it will be a move to Australia or the provinces . . . that is nothing new. The past year was the only year when there has been net immigration gain of Kiwis since 2000 due to Covid. Most years since 2000 net emigration has been around 20,000 and in 2012/13 it was over 40,000.
As for such a move not being new, I purchased my first home in 1981 and due to affordability, my compromise was the border of Mangere East and Papatoetoe. In 1985, being in a position to step up, after looking at prices in Auckland and the regions, I moved to the regions . . . and have never considered moving back to Auckland due to a far better lifestyle and not having an hour commute twice daily.
So I am not saying something I haven’t done myself.
What were you reasons to suggest an upside from 2019? Surely you didn’t predict the RBNZ removing LVRs (the main cause of this massive increase in mortgage lending and hence price increase) and printing money like it was going out of fashion because of a pandemic?
albert
Yes, at no stage in 2019 did anyone foresee Covid and RBNZ reactions and the significant impact that would have from April 2020.
However prior to Covid, throughout 2017 and into pre-Covid 2020 many on this site were claiming a severe correction and that any FHB contemplating buying was a fool. That was the time of the rise of the "dgm".
In 2019 there was sound reason to suggest a contrary view that there was an upturn in the Auckland market from September 2019 contrary to that view.
A post thrown back at me illustrates this:
"by printer8 | 1st Oct 19, 12:15pm
Another swallow - while this and other data is not on their own indicators in a upswing in the Auckland market they are at least indicating a growing firmness. "
This proved to be correct and it was not a baseless guess.
After the Auckland market peaked in March 2017 it had shown some fall over 2018 and early 2019.
However, there was some continuing strength in regional markets and the Auckland-regional differential was closing.
From September 2019 onwards Auckland auction data was showing some strength and this continued to be supported by REINZ data throughout the rest of the year.
My comment was also based on reading a number of bank and economists' reports . . . not slavishly followed but listening to what they were saying and more importantly what they were saying to support their views.
Choice photo
Even with a 1% increase this summer will be hot
Luke
According to RBNZ, Treasury and Robertson 1% is very, very conservative.
... Yea and their predictions are so good, they will not hike it to fast as they know the affects if they do. I would say expect a. 25 hike to the OCR this year followed by another two next year, flow on will be about . 75 upto 1.25 from November 2021 to November 2022
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