The bears have taken charge in the auction rooms and we don't mean Paddington, Winnie-the-Pooh or Teddy.
These are mean and nasty market bears and their presence is clearly having a chilling effect at real estate auctions around the country.
Last week interest.co.nz monitored 166 residential property auctions throughout New Zealand. Sales were achieved on just 40 of those, giving an overall sales rate of 24%.
That means just under a quarter of the properties going to auction are selling under the hammer.
Even in Canterbury where auction activity has been particularly resilient compared to most of the country until now, the bears were on the loose, pushing the sales rate down to 27%.
In Auckland the overall sales rate was 20%, with the sales rates in Waitakere slumping to 9%, and it hovering barely above that in the city's leafy inner suburbs and Manukau which both had sales rates of 10%.
The chart below shows the results in each district where auctions were monitored, while the details of individual properties offered at all of the auctions monitored by interest.co.nz, including the prices achieved on the properties that sold, are available on our Residential Auctions Results page.
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84 Comments
Agents tell me they are still getting high prices but it takes 2 months now. Only takes one buyer...
Anything selling in Auckland at the moment seems to be at or below RV
Definitely true. I've been keeping a close eye on Auckland / Manukau properties and comparing sale prices against RVs. Now I've switched to comparing sales prices against 2017 RVs.. That gap is the next one to watch.
Looks like Propellor definitely needs more than one.This will be why they have been ramming their advert down the neck of radio listeners. Negotiating with the IRD...just pay your tax.
https://www.stuff.co.nz/business/129022581/inland-revenue-applies-to-pu…
Connors, who refers to herself as the queen of New Zealand property, dismissed the application.
”We are in negotiations, and I have done this before. We have come to arrangement, and we’re fine,” she said.
“It’s just the typical thing where they take a heavy-handed approach, and we say we don’t owe this – and that’s what it is basically.”
The adds on the radio for this entity I've found quite repulsive over the years - especially after living through the GFC in the US where people hyping up property investment was one of the big causes of their bubble....and listening to Connors talking up leveraged investment as having no risk and the road to riches I found to be extremely dangerous to people in society who don't know any better. If does all come crashing down and cause widespread pain, it will be her ilk who have gone a long way to contributing to the mess.
This is true but she was also selling back when Manurewa was 300k.... like any Ponzi the first in do OK.....
A fool and their money are quickly parted.
The bigger problem we might face is that we've been giving money to fools (our allocation of capital to residential property investment as opposed to long term sustainable/productive economic endavours) and doing so as a priority backed by central bankers and successive governments.
And now we have a generation of investors who think they are very smart....but like Taleb's turkey, its possible they don't know anything at all.
NZ has not been a great place to do speculative investment unless its been in agri or tourism. Have you ever tried to loan money from an Aussie bank for anything over then property: (Unless it's secured by property). It's just impossible.
Not just the Aussie banks either - Coop for example required either property or a term deposit of equal size to the loan.
... I don't wish her or the company any ill will , but I'll be glad to not have to endure her spruiking property on the radio anymore ...
Now ... to kneecap that Ashley Church fella ...
Cut some the same cloth....similar age...both have been rewarded for being involved in property investment at the right time...but possibly don't understand that what they have experienced isn't normal, but assume it is normal so call it their 'reality'...so now suffer from recency and confirmation bias....If prices do fall and it all falls apart, it could be very painful for them as they will need to readjust their entire paradigm of how the world really works.
Couple of fair weather sailors?
On a completely unrelated note, honest, a rather flash house in Christchurch went on the market last week. I wonder if the sign on the front fence in Google Streetview comes with it.
Actually, it's the underbidder that sets the price at auction, as much as the person who ends up buying it.
And that is why when there is a shortage of supply, contrived or not, then auctions are made for that type of situation, and in fact, exacerbate it.
And when there is more supply than demand, they fail miserably.
Agree, still selling though it takes time and only slightly below vendors expectation so is still a long way to go.
Does a bear go potty in the woods...yes it does. Did interest rate reality go potty on leveraged speculation...?
North shore holding up well...
The median selling price dropping 145k month on month will do that..
Realistic vendors & people wanting to buy in the area? Good isn't it...
It's interesting to study the houses that got bids but were passed in.
One got a bid of 925k but sold later in the day for 969k so that was good going. Sellers had bought it in 2019 for 889k.
Another the sellers had bought in 2016 for 660k and got a bid for 885k but passed in and now marketed as 'by negotiation'.
Another bought in early 2021 for 996k and got a bid of 1065k now advertised for 1188k.
A very curious one was a North Shore original home that passed in at 1500k yet the 2021 RV was 1450k and 1500k was the homes.co mid range estimate. It last sold in 2000 for 271k. Would be interesting to see what happens with that one.
Maybe it is in the agents interests to keep the motivated sellers out of the auction room. Real time price discovery for the other potential buyers and sellers may not be helpful for the agents. Best it is done behind closed doors with the sale price suppressed for as long as possible.
914 New Townhouses and apartments for sale in Auckland on Trademe today. How long before that breaks 1000?
Ive mentioned this before, but these not selling will have a downstream effect on new developments.
Often they need to be sold to finance the next job.
I don't understand, it makes little difference to the agent what it sells for, they just want sales.
depends on the agent - some still want a 'reputation' as one that gets relatively high prices in order to induce new sellers. Pretty easy to see some of that in action on the like of Barfoot where their previous sales prices are listed. the 'good' ones are those that know how to work both the buyers and sellers at the same time.
People avoid selling in a falling market. If they don't even come through the door to the agents in the first place there is little the agents can do to talk them into selling at lower price. Agents are sales people and they need people coming through the door in order to do their pitch. If no-one is coming through the door to even consider listing then it's bad news for agents hence keeping price falls on the low down.
If these were the auction clearing rates in Sydney, it would be a different headline .......
Indeed, the headline would be:
"Just under a quarter of properties selling under the hammer at auction in Sydney"
LOL
You do not want to be holding a dev site right now..... offers are low.
Hasn't stopped the developer next door charging ahead, sinking money into a quarry-like hole from which to emerge 3 storey shoe-boxes on 200sqm sections. Mind you, the developer drives mercedes utes so don't think making money is actually front of mind...
Its his only way out even at break even
"These are mean and nasty market bears and their presence is clearly having a chilling effect at real estate auctions around the country"
Are these a similar or related species to the doom goblins that TTP has been referring to?
But remember it's the bulls that chase the bears away.
The current correction was well overdue - but the longer term trajectory for house prices across NZ is upward.
We will soon see the rise of counter-cyclical investors, as expected in a buyers' market.
Pity the Doom Goblins (a term that Independent_Observer increasingly favours). They lack the wherewithal in any market to get their own roof over their heads.
TTP
Pity the bulls they lack the credit to buy even at these levels.....
Hope those doom goblins under your bed whispering naughty things like rising rates and negative equity don't give you too many sleepless nights Tim :-)
"They lack the wherewithal in any market to get their own roof over their heads"
Like yourself who claims to be a poor renter? So are you attempting to insult yourself because you lack the wherewithal in any market to get a roof over your head?
Not sure how you baited him out there.... I have been trying for days....
I think Tim has a special place in his heart for my positive comments regarding NZ's massive property bubble and the financial and social risks it has been causing this country (despite his desire to pump it for his personal financial gain......while pretending to be a 'poor renter').
I was just poppping buy to read and catch up….and could not be more amused to see the TTP Knight in Shining Armour, still defending his property market Maiden, as her darkest hour approaches. His property market love and chivalry demonstrates such a genuine devotion, it warms the cockles.
May we all be so blessed to know the kind of love thar TTP has for the NZ property market.
As I've said here many times before, Independent_Observer, learn from my mistakes.
I'd love to own - rather than rent! (But I don't whinge and moan like the DGM / Doom Goblins.)
TTP
Perhaps you should just take your own advice and find some wherewithal and buy then!
The real doom goblins are those who have been promoting this financial ponzi for their own personal financial gain, at the expense of the social and economic stability of the country as a whole...
You know, the real estate agents, the property brokers, the politicians.
If there are dark times ahead it will be from those who gained by creating the mess, not those warning against it.
Can you not just move into your Palmy penthouse?
The Bulls are so bloated from discounted food of the last ten years, they are two fat to runaway from anything, let alone a bear. Without interest rates exceeding inflation this will not change. This will translate into failed auctions, low sales volumes, and staff demanding inflation driven pay increases. Summary lower revenue, higher costs, and declining property prices.
Oh wait...that's already happening. Great time to own a RE agency I guess.
Sick burn brah
I just ran my boatometer on Trade me. All boats for sale in NZ went from 2950 at 12:00pm 13 June to 3081 at 12:00pm 20 June. Increase of 4.4% in a week. The deleverage stage of the incoming economic cycle is gathering momentum.
ITM Fishing show.....
Not saying this isn't the financial end of times you might be hoping for, but boat sales are generally sluggish in the middle of winter.
Next up: swimming tog sales plummet, a foreboding sign of economic downturn, or are people just not into chaffed nipples in July?
Yeah there will be a lot of seasonality there. Probably can't really look at it week to week without reference to those patterns.
People buy boats using a secured loan against the equity in their house to get a low interest rate. When private boat sale adverts start gaining momentum, deleveraging is underway. Contagion then snowballs into the property market as assets become exposed. The debt deflation spiral then starts to spin hard.
Interesting because the last few years boat builders have been in such high demand, and there have been very long waiting lists for boats to be built...
Even on the Facebook boating page, people are talking about wait times and changing costs etc for boats...
Hopefully cash purchases and not as you suggest above..
I can guarantee its borrowed money. Boats, Pools, Rangers - shes all on the house mate, moneys cheap dont ya know..... until its not.
For those items it is cheap. A Ranger over 30 years at 5% isn't a great deal of money to find month to month. Less than a 5 year old car at 12% interest over 3 years.
Except by the end of those 30 years you're actually paying for 5 rangers at the same time because you just kept upgrading and rolling it into the mortgage.
Everyone I know (business people admittedly) who bought a boat bought cash. Cash balances were strong post-COVID stimulus. But many have 12-18 month lead times so I am curious whether buyers regret will kick in by delivery as people eat into those reserves as the economy slows down. Boat listings will be very interesting about this time next year as people reflect on FY 23. Many SMEs don’t forecast ahead very well and will only tighten in FY 24.
That is of course another matter for context; wait times for new boats exploded over covid, and many if those orders are bring fulfilled this year - some of the used boats hitting the market are the old boats being replaced.
No point having a boat if you cant afford to fuel it
The Fordrangerometer could be a good one to
I heard an ad a couple of weeks ago that caught my admiration. It was form a Ford dealer and he was marketing his Ford Rangers as "These are new and registered before 1 April, so no Clean vehicle charges apply." Saw an opportunity and went for it.
Capitalism eh?
Not going to be a good time to own a mag'n'turbo store, not many sales of big wheels with knobbly tyres on the horizon.
This would have gone mid-high 2's last Nov....
16 Wendover Road, Glendowie
Sold For $1,925,000
Rating Valuation: $2,875,000
https://www.barfoot.co.nz/property/residential/auckland-city/glendowie/…
This shack isn't worth 1m
True but the land should be worth 2M+
Should it though?
If Westie comment above is right and there are 914 townhouses/apartments already for sale and with cost of building going up it would need to have a pretty unique selling point.
Glendowie - decile 10 school zone.
Carefully shaped school zone to keep the undesirables out of their school.
It's also right off Riddell Road where Graeme Hart owns property
lol, Riddell Rd is a really long street.
That particular property in Wendover is only a few doors down from blocks of state housing (not that there is anything wrong with that).
What ever happened to Madeleine Ave?
Turned into Leakers Avenue, whoops Mt Taylor Drive…
Just googled it out of curiosity, there are 76 decile 10 schools in Auckland.
If North Shore dropping $140k per month at the moment, why wouldn't Glendowie?
Land value only, get 4 on that easy....
Lol $1.9 million looks like a pretty decent price for a run down brick house... imagine the capital gains they would of made on that if they've on it long term.
Homes.co.nz had the price as $3.13M in April still, lol! The fall on the homes graph for this house is going to be epic once it settles.
There really shouldn't be any properties for sale by auction in the current market. It makes no sense at all to list a house for sale through auction, when there are so few buyers
It works for a quarter of the sellers. No annoying negotiations and conditions.
Depends what you're selling.
Exactly. Back looking in Auckland and desirable properties still selling. I suspect many sellers are now tyre kickers and also trying to off-load rubbish.
The crash has only just started don’t be fooled by people on this website who constantly come up with more nonsense as the ship go down.
Nonsense like predicting house price averages to go down by 60% ?
Looks like the RBNZ are still trying for a soft landing to me. Watch the OCR rises stop as soon as possible. Still not convinced that they are not trying to prevent a crash or we would have had a one off 100bp rise by now.
Like trying to land a fully loaded 747 at Wellington airport. Technically possible if everything goes right. But not very likely.
Only if you purge a truck load of weight via fuel dumping. What can the banks purge the easiest...the over leveraged. No secret, they have been declining them for the last six months and forcing them to move elsewhere.
Yvil nonsense is when you tell story’s like your one about making an extra million by cutting down some trees, We are already down 15% in Auckland rates have only just got for emergency level watch and see as inflation and higher rate sink price’s most people are happy to see this market get back to a affordable level you seem so upset.
RAWR. A bear is here.
If the situation continues for a year (Most probably will. as all data pointing towards recession) , it will be disaster, will it worse than 1980s or not to be seen.
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