The number of properties offered at auctions remained above 300 last week but there was a drop in the number that sold.
There were 307 residential properties on offer at the auctions monitored by interest.co.nz last week (19-25 November), compared to 316 the previous week.
Of those, 85 sold under the hammer, down from 113 the previous week.
That pushed the overall sales rate down to 28% from 36% the previous week.
Auction activity levels remained high on Auckland's North Shore and in the central suburbs, and Canterbury and the North Shore both had overall sales rates of 37%.
However the overall sales rate was 26% in Auckland and 28% nationally.
With less than four weeks left until the auctions close down for the summer break, the overall tone of the market remains cautious.
Details of the individual properties offered at all of the auctions monitored by interest.co.nz, including the selling prices of those that sold, are available on our Residential Auction Results page.
The comment stream on this story is now closed.
- You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
74 Comments
Commenters please note: Interest.co.nz is concerned at the increasing incidence of extremely low grade comments appearing in the comment streams of some articles. There are a small number of commenters whose comments are descending into juvenile slanging matches with each other. Their comments are often little more than name calling and school yard insults. This website should not be a platform for that type of behaviour. While interest.co.nz does not wish to unnecessarily restrict our readers ability to debate topics robustly and even humorously, the behaviour of a few commenters is detracting from the overall quality of the comment stream and deterring other commenters who may have constructive comments to make, from taking part in the discussions. Reluctantly we will be more aggressively deleting low grade comments, especially those that are little more than tit-for-tat name calling and insults. Repeat offenders are at risk of have their commenting privileges withdrawn. However this is unlikely to affect the great majority of our commenters, most of who make a worthwhile and informative contribution to the topics we cover.
Interest.co.nz is concerned at the increasing incidence of extremely low grade comments appearing in the comment streams of some articles.
It's an emotionally loaded topic Greg. Nevertheless, agree that the juvenility has been reaching shriek levels for quite some time.
As someone who has been looking at houses in Auckland central and the North Shore, I observe a notable difference in the RE agents ability to manage vendor expectations. I would say the North Shore agents have been a lot more successful in achieving this and this is showing in the auction clearance rates.
Increasing sales volumes would be a prelude to a floor to this market. Its plainly obvious we are a way off from this as a leading indicator. Low ball offers from the end of next year is a good starting point for those who want to own and occupy. To buy before this risks it being a milestone of disappointment. Who wants to be caught over paying for life's biggest asset? Those that want to speculate and flip, go hard and buy now if you must! How hard is it to reap quick capital gain from this ailing market?
edit
The problem is though. If you put in a low ball offer and it gets accepted, you were still the highest offer at the time. Who says that someone else will pay more than what you paid when you try flip it? Its all high stakes gambling really.
"Its all high stakes gambling really"
Exactly. In recent years, with use of others money, that's pretty much all its been.
Yep bang on AdamJay.
if you look on the shore you have harcourts cooper&co, Bayleys, and also 2 RW offices that offer excellent auction processes (agent training, vendor communications, strong auctioneers etc) and that is why they get the better results. B&Ts mass cattle market approach is often great for bagging a bargain but not for getting results
Realagent. Your comment has been deleted. We aim to keep our comment streams free of marketing material. That means we do not allow the comment streams to be used as promotional vehicles for particular businesses or individuals, or the goods or services they provide. Please refrain from making similar comments in the future. - GN
To realagent- My comment wasn’t in regards to whether to use an agent or not to- or what ‘techniques’ they may use to obtain a listing- I was noting that the stronger auction results in that particular area were due to the relevant brands/ offices being well-trained in the auction process. You obviously have your own agenda, and business to run, which is fine, but it shouldn't mean people can’t comment on what is happening in the market and add to the conversation..
I think you'll find what you're reading is a message from Greg to realagent about his original comment.
Got an email from a Real Estate Agency, must have been sent to all on their list and got a good laugh when I read "We enjoy reading the balanced commentary by Tony Alexander"
We enjoy reading the balanced commentary by Tony Alexander here is a recent one with some thoughts for buyers.
How about a good laugh to start the day.
Why are you part of so many RE email lists when you're not in the market and get triggered by them?
Sun Tzu had a famous quote about knowing thyself and the opposing view/enemy and you will win a 100 battles.
No point only knowing thyself without the opposing view - or for every victory you will also lose a battle.
What has been enlightening to me as that quite a few people don’t even know themselves (and their own bias) so the success they had has been more luck than good strategy (as Taleb put it - they’ve been fooled by randomness)
Well said IO.
Sun tzu being an expert in psychology knows about strategic thinking. While some just complain and complain about how others have laid out a well trodden successful plan. Example, the property clock is not rocket science but a lot of people don't know about it and how closely it models cycles.
Trigger........are you serious...and not part of too many agents but real estate agencies are toooo busy with their propaganda agenda, can't help.
Carinaz it seems every time you recieve an RE email you get upset and post about it here. Save yourself the stress and unsubscribe... you might enjoy things more and be less triggered.
Read the first post to commenters. He is talking about exactly what you are doing.
by Nifty1 | 29th Nov 22, 1:17pm 1669681066
Carinaz it seems every time you recieve an RE email you get upset and post about it here. Save yourself the stress and unsubscribe... you might enjoy things more and be less triggered.
Perhaps you could just take your own advice and ignore Carinaz posts if they trigger you into telling him that he's triggered (which will save triggering me and remove all this meaningless ranting from this site...I can't stand the hypocrisy...even when it results in me becoming a hypocrite myself by being triggered and replying to you...the child in me will say that you started it and feel it has to respond...so perhaps its best to just not start the process in the first place).
It's possible that Carinaz isn't the one being triggered by anything - but that you are the one being triggered by his/her posts about the RE emails (just as I am being triggered by you hypocritically being triggered by him/her).
https://i.pinimg.com/originals/fa/08/53/fa08537fdd7342ec6f6600179865d9a…
Greg Ninnes, is there any way of knowing if Nifty1 and HW2 are the same commentor?
All incoming posts will have source ip address tracking in log files.......
I don't think they are - very different personalities.
Yes Greg please check if we - HW2 and I, are the same posters and enlighten RP...
Not sure how my comments were insulting or low grade... constructive feedback perhaps, not always well received though if people don't like it.
Really hope people don't get too precious here if someone disagrees with their view, be a shame if censorship is encouraged as a result.
Surely it's more important to focus on substantive matters and lifting the standard of dialogue here - than be distracted by who might be posing as who (and other petty, inconsequential things).
TTP
Very well said
Again, online bullying and trolling by the master of spin retired poppy. Editor please take note.
by Retired-Poppy | 29th Nov 22, 1:55pmGreg Ninnes, is there any way of knowing if Nifty1 and HW2 are the same commentor?
by J.C. | 29th Nov 22, 12:18pm It's an emotionally loaded topic Greg. Nevertheless, agree that the juvenility has been reaching shriek levels for quite some time.
.
Stress....It gives a good laugh and nothing better than to start the day also you seem to be upset with me sharing the jokes.
Chill.
I'm a member of a couple of Facebook Property Investor groups. I don't own rental properties nor have the desire to.
Merely there for some light entertainment or thriving in schadenfreude.
Is the schadenfreude rising yet?
In response to the latest ANZ Mortgage Rate increases.
Watch the others... won't be able to help themselves... pure profiteering. Shame we can't borrow overseas against NZ properties... there the banks are kept honest.
NZ Dan, I assume you understand the meaning of "Schadenfreude", it's a german word made up of "schaden" = misery and "freude" = pleasure. So you openly state that you enjoy revelling in other people's misery?
Here is a 2nd Hauraki corner type location thats sold well below CV, interesting suburb to watch
Sold 31A Northboro Road Takapuna Nov 2022 | Barfoot & Thompson
Sold For $1,140,000
OneRoof estimate LOW VALUE was $1,155,000 Rating Valuation: $1,450,000
-21.3% down on CV, was last sold in Jan 2018 for $1,005,000 (July 2017 CV was $1,050,000 at that time)
What a difference a year makes, I sold a house in Glendowie on the 28th Nov last year and got 18% over CV for a site that cannot be renovated, would have got more with no house on the section.
ANZ's Latest Property Focus now calling house prices down 22% (vs 18%) I note their floating rate mortgage forecasts top out at 9.6% (ouch)
Wow thats an ouchy ouch floating rate. Most of the lendors who offer the offset style mortgages only offer these on floating (only way to calc interest due i guess on a closing daily balance as the offset must swing around a lot).
Starts to make offsets expense.
Not if you've got the cash to cover it. Great alternative to a TD by offsetting your mortgage with your savings instead. Doesn't earn you anything but negates the interest you pay and therefore more of your mortgage payments are hitting principal.
This is exactly right - we use it in this way as well. It is basically the highest returning TD you can get but also allows flexibility to take up new opportunities etc.
LOL it must be some kind of record by those clowns at ANZ for most revisions to house price forecasts in a calendar year.
For the record I was saying last year that average peak and trough falls would be about 20%. I also said house price falls this year would be 5-10%, likely to be 12-13% so just slightly out on that one.
Forecasts are fun to make. Reality is only hindsight is 20:20. Although I think the banks should be more accountable than a an internet hobbyist. I’ve been wrong for years.
More people selling and less people buying......perfect setting for house price to kick start the next leg of fall with interest rate about to rise further and cost of living starting to bite with high inflation.
This time is different as maybe first time in living memory of many young (who have not witnessed 1970s and 1980s) government and RBNZ are unable to interfere and manipulate to support the falling housing market, instead as economic fundamentals have taken over are forces to go with fundamentals which is pointing towards disaster.
This time is and will be different and many will be in shock as till now, any downturn has been short lived as rbnz and government were quick to inject money to support.
This time might be different but long term owning your own home is no brainer. Its funny because FHB of the past 2 years are definitely going to negative equity territory if they put a 10 or 20% deposit. Years of saving gone. Won't been seen for a while if they decide to hold the house longterm.
Not really funny, but yes, the same may happen to buyers today losing their equity in 2023. Anyone who jumped into the 5% loans with high interest top-ups to 20%... oof..
Highly leveraged investors the worst to be hit almost certainly. Some of the DTI loans taken out 2020 - 2021... unreal.
Manukau has been consistent with its performance - Worst of the lot.
Still must say that prices have not fallen as much as they should have been by now, May be next leg of fall will trigger soon.
People still want to buy. The can only afford what they can afford. Higher rates, higher cost of everything else due to inflation and you can only afford so much. The only variable left is the price.
Yes this is a good point, we are seeing the "mechanical" price reductions caused by new mortgage rates, people are still paying all they can pay, its just that this maximum has been reduced and therefore the price paid must reduce as well.
When will we see the FONGO effect start?
ANZ just revised their forecast for Housing down 22% vs 18% previous forecast.
I wonder what they prediction will be once ocr hit 5.5% . -30% falls
It seems 30% fall will be soft landing, if the fall stops at 30%
Absolutely! Anything beyond -30% will be a great crash.
Not really a crash. More an overdue reset of house prices.
I remain to be convinced that anything up to a 40% fall will have a serious long term impact on our economy. I suspect (whilst it will be painful for some who are overleveraged - but that was their decision and is their fault) the majority of people were expecting a fall (in fact i believe 80%+ of people last year even wanted a reduction in house prices for social reasons) and have planned and acted accordingly.
So with any luck we should experience a year to two years of pain, but an outcome that will be a more sustainable employment level and houses that are affordable for the people we need most (professional teachers, engineers, police, bus drivers etc) in the country. And manageable inflation and a better OCR level (that is set in a position that will enable a drop in the case of future black swan events.
So a good medium to long term outcome for probably 90% of us.
In some ways the worst outcome would be that house prices dont fall enough - and our quality of life falls because we cant attract talent.
Whilst on the subject of the importance of the medium to long term outcomes rather than the 'pain in the 1-2 year timeframe' which we all seem to be lfocussed on -> and whilst i disagree with many of Labours policy execution - i have to say at least they are trying to sort the medium to long term cost issues surrounding water and health and housing. More so than National.
Given they have predicted the OCR will go to 5.5%, shouldn’t their house price prediction reflect that?
One of the best questions I have seen lately.
Add in 2-3 years of 5% + inflation and this is getting into the US GFC type housing re-pricing (won’t say crash as don’t want to trigger TTP).
All is honky-dory (sarcasm) as the RBNZ have sought to reassure us our major banks are well placed to handle, amongst other adverse occurrences, a -47 correction in house prices. I assume the -47 is in real terms too.
https://www.rnz.co.nz/news/business/477736/banks-are-well-placed-in-cas…
If it happens, only then will we know how much fat (and vital confidence) there is really left in our financial system. Where does this leave our currency? If our currency tanks, we risk importing inflation. What tool could be deployed to support our currency? Higher interest rates....
Also, if NZ correlates with Aussie at all (and I'm not saying that it does, but it may somewhat), then NZ still has record low household credit card debt vs historical norm, and record household savings vs historical norms.
So there's a bit of bunce to pad out demand on the living costs side of things, that may result in an increased duration of FOMO on the housing purchases side of things. This will aid the house prices sticky on the way down theory?
If housing falls 47% from peak, its going to be very hard to develope land unless you are almost given the land... Even then many construction companies will be bust and builders will be flyinflyout mining workers in aussie by then... It will be a great time to buy as immigration will start the next boom cycle.
Mortgage serviceability requirements were 6% back in 2020 and are at 8% at the moment so unless people lose their jobs this should be survivable.
Many self employed smaller business owners will not loose their jobs, but their income may drop below desired levels, same with employee overtime / bonuses etc etc
The retailers, hospo workers will likely start to see job cuts as a result of the business owners losing revenue shortly.
The question is will the shortages in other areas e.g. bus drivers.... stop the overall unemployment level rising or will there be a domino effect. I think RBNZ wants the domino effect where people start to sell houses and trip the mrket up.
Vendors and purchasers clearly not meeting on price. Vendors not discounting enough + buyers not offering enough = low number of sales
Yvil… I rate you as a commentator. I don’t always agree with you but that’s the point of these forums, to hear other views right. Question: do you think property as an investment will lose its popularity long term? I’ll open that question up to anyone actually.
I can think of 2 people I know personally who have property investments who state their reason for picking the asset class as the low risk compared to shares.
I feel like a proper crash, which this may well be gearing up to, will break the mythos that 'you cant lose on bricks n mortar maaate.'.
The NZ sharemarket crash certainly scared an entire generation off equities for some time.
Nope, I dont.
Im not a property investor and never have been FYI, but I think the psychology of it within NZ (especially NZ born persons) is crazy. Its almost just bashed into you growing up that the answer to success is owning as many homes as possible. I dont agree with it but I cant deny it is there and I see nothing really thats fundamentally changing that (yet). I was talking to a work mate the other day who mentioned their son was looking for an investment property, to which I replied just throw it into a TD which is arguably paying you more with less risk, to which they replied, yea but its NZ housing you know...
Its not rational but when its all people know its their flight to safety. Plus its tangible. People love something they can physically see / touch.
Just gave strong arguments for property to stay highly popular
Add to those, that there is very limited alternative, safe investment options in nz. Take a look at the MFB pump and dump
Hi Tom, interesting question, especially because you added "long term".
Firstly, property investment makes no sense at the moment, the cashflow is just too negative (i.e. rent does by far NOT cover expenses) because of much higher interest rates and the end of interest rate tax deductibility. It's one thing knowing this in theory, it's another to have to dip in your reserves every month when you lose money, no one will do this for too long.
To answer your question about the long term, beyond a "I reckon" one would have to be able to predict:
1) are interest rates going to fall to 3-4% again? I wouldn't discount this from happening in 2024, IMO the NZ economy is going to tank in 2023 and then the RB will lower the OCR again, by how much…?
2) is interest deductibility going to be abolished? National said they would abolish it if elected, take, your pick who will win the 2023 election
3) there has also been a very significant catch up of new dwellings built and very little immigration, this has also contributed towards todays (and all of 2023 at a least) weakness in the RE market. The supply of new houses will taper off significantly as the numbers don't stack up for the developers and it's probable that immigration is going to increase again (not to prop up house prices as some conspiracy theorists claim) but because we have such a shortage of workers and businesses can't find enough employees to operate efficiently.
So if you can accurately answer the 3 points above, you will also have an answer to your original question, long term.
Nice summary, on point 3 we certainly have had an significant increase in new builds so it would be fair to assume a shortage no longer exists but inflation on building materials and services will see the base price of a new build cause some braking affect to house price reductions.
Good points there Yvil - agree.
On the change of government topic and National removing the interest deduction rules...the thing with housing markets is that they are like turning around a supertanker.
It won't happen overnight or quickly.
If/when National walks in the door.... and they remove the deduction rules in late 2023, it could take until 2024 before they take any effect. By which point houses could have been in decline 24-30 months - and could be down 30% or more by then (i.e. damage done).
The psychological blow of seeing property investors being hurt (with a significant loss of capital gains) could offset the benefit of changing deduction rules.
I mean a lot of investors tell me that they buy property for the income...but then I look at their numbers at its pretty hit and miss - I think many/most are their for the capital gains (as it true for many share investors who avoid taxation by operating on the capital account and not revenue account).
Thats a good question.
After the GFC property dropped in price and people didn't buy for a few years, but then as soon as green economic shoots appeared property was again the long term #1 investment choice .
We will see the same outcome again.
The 3 problems in NZ as i see it are (1) there is no CGT on residential property (even the bright line test will likely be removed by National) and (2) there is no other real investment option inside NZ for people to save for retirement except kiwisaver and lastly (3) we take it as a given that the governments will open up immigration and try to create more buyers than houses every time the number of houses and people actually starts to settle.
The biggest issue this time was the powers that be pumped teh market too high for too long via OCR cuts. Which has overinflated pricing so we will have a pretty major drop (40-60% i reckon) but unless something else changes and there is another investment option (productive business receiving favorable tax treatment vs property) for people to save, then in 5-6 years time people will forget the huge drop, see the green roots of recovery and come back and buy investment properties.
The problem with all this - is the infrastructure isnt keeping up with immigration levels, so at some point we become an non-attractive destination for immigrants and the process breaks. the question is - has it happened yet (e.g. bus driver shortage, teacher shortage, healthcare workers etc)
I agree with much of this. I wonder what the effect will be for those that lose significantly in this upcoming event. I worked with someone in the Bay of Plenty who lost a large amount of money and their family home in the kiwi fruit downturn in the late 1980s. This clouded all his future investments and he became risk averse. He later did well I think because he then exercised very good risk assessments on projects/ investments. Surely a significant “bursting” of a bubble will reset the market values and it will also teach people that there is no investment that is a certainty. One of our problems is that we have not been allowing economic cycles to run their course, instead constantly intervening, be it through immigration or macroeconomic levers. I need to explain to my children ( early thirties) what is about to happen - they did not see it coming earlier in the year.
So those who haven’t experienced significant downturns ( I agree with whoever said that the GFC wasn’t really noticed here until after it had happened - my memory of it was that we were “safe” on the coattails of China, and that Australia got badly burned. I didn’t know anyone effected by it and just noted that my newest CV after the GFC had dropped about 15%). The downturn in the late 1980s was much bigger, we all knew people that were really effected by it and it had a very obvious effect on our lives all through the 1990s.
Did you just get played by the down-spruiker tom Jones 04 ? What better support for your case than from a former spruiker. The govt used this strategy getting Jim bolger to promote the new labour rules
Hi Greg,
Unless I'm missing something, it seems the Residential Auction Results table doesn't quite tabulate correctly.
Total Auckland should be 60 [5+4+22+6+17+3+1+2+0] out of 220 [11+18+60+24+63+24+5+14+1]
All of Aotearoa is correct so you might be including other regions in the Total Auckland
Hi Wrightoff, I think you may be including the Northland numbers in your calculation for Auckland.
Yup, thanks Greg - all clear.
Who's the Goose? I am.
Easy mistake to make Wright Off. We could all take note... be careful jumping to conclusions
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.