There was plenty of action in the auction rooms last year with interest.co.nz monitoring the auctions of 12,401 residential properties around the country in 2023.
Of course those numbers were not evenly spread throughout the year.
They started off reasonably strongly at between 200 and 300 a week in the first three months of the year, then dropped back to around 200 or less between April and August, before increasing strongly again from September to November and then tailing off in December.
There was nothing unusual in those numbers because regardless of whether the housing market is in boom or bust mode, it will generally still follow the usual seasonal trends, with activity falling away over winter, rising again in spring before taking a rest over the Christmas break and and then coming back strongly in February/March.
So 2023 was no different in that regard.
A more interesting picture of what was happening in the market last year comes from looking at the trend for the number of properties that sold under the hammer.
The first graph below shows the number of properties offered at auction each week compared to the number that sold under the hammer in the same week.
The second graph shows the number that sold under the hammer as a percentage of total properties auctioned.
These graphs show that the number of properties being auctioned last year starting increasing strongly mid-August, almost reaching 600 a week in late November before starting to drop away again in December.
The number selling under the hammer also increased over the same period, but at a much slower rate and as the first graph shows, the gap between the number of properties being auctioned and the number selling at auction steadily widened in the second half of the year.
As the second graph shows, the under-the-hammer sales rate peaked at over 50% in August/September but had dropped back to around a third by the end of the year.
That suggests the market was probably a bit tougher at the end of last year than the number of properties being brought to market would suggest.
It will be interesting to see the trends that emerge over the next few weeks.
There have already been a handful of auctions this year and interest.co.nz monitored 13 over the last week.
Of those 13, just three produced a sale under the hammer, giving a sales rate of 23%.
But it is still too soon and those numbers are too small to draw any conclusions from them about the state of the market.
But by February a clearer picture should emerge of where things are likely headed in 2024.
So not long to wait.
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49 Comments
More evidence of a flat market.
Weight of capital is fire suppressant to the fires of greed. As prices drop what will be the tipping point for the banks to actually start evacuating those failing to meet their mortgages...?
Happy New year Av-man. How soon will it be before you grab one of those beach bargains. I prefer to pay win-win price which may be full price but something with appeal. The fire of inflation is reducing the real price of homes.
I must admit I'm a bit surprised to see mortgagee properties for sale are falling not rising. Maybe that's a good thing
Always falls over Christmas. Bankers and lawyers go on long breaks.
Normal service will resume shortly ... Probably with a vengeance as the economy contracts further and employment slips and businesses close and people are laid off.
35 bridge street opotiki they sat on for 3 years after first failing, recently sold. So quite a while and certainly not how it was played in the past.
WHAT WAS THE SALE PRICE?
One mill... windmill... toy one
Housing market is going to be in a very tough spot for the next couple of years..
Houses used to be gold standard, now feels like copper standard
Interest rates, interest rates, interest rates is the catch cry for 2024. I think the problem is that the longer demand is constrained wont be a good thing if there is a build-up of buyers
Supply is down and needs to keep punching out homes. The gnats say they are on to that, though easier said than done.
Supply isn’t down, it’s booming.
It will be down quite a bit later this year, though. But until then, lack of supply is NOT a factor supporting higher prices.
That's strange because I read that consents are down 20 percent yoy
Consents aren’t houses, and it takes time for a slump in consents to result in a slump in house completions.
see page 11 of this report for the huge recent surge in completions. Other parts of the report show the slump in consents.
https://knowledgeauckland.org.nz/media/xyej3fnb/auckland-monthly-housin…
Its fine at the moment as sales turnover is at a low ebb but picking up, build numbers are dropping. In Hawkes Bay the number of house sales over the December quarter was the highest for two years. Activity for many is heavily constrained by interest rates. As for me I have a massive windfall nest egg I am sitting on right now and looking for the right house to buy and stay in for 30 years. No rush, I was lucky enough to buy retirement stocks last year at the bottom.
Groundwork had started on the first stage of the 400+ house subdivision South of Havelock North. No horses (or trees) are being spared in getting things underway.
No horses (or trees) are being spared in getting things underway.
What do you think about that. I am pro progress so dont mind, we can plant trees and vegetation once the houses are built or plant trees elsewhere
Established trees if they can be maintained are great. If they are in the middle of the primary building site then....
Try living in your consent FH :-)
Exactly that is my point, please explain it to HM
Seems the market reached some kind of floor in Q3, which agents and media hyped as a major turning point - encouraging a rise in listings and small price gains. Then the reality of 7% interest and weakening economy returned to buyers. So just as agents told vendors property prices were increasing…they weren’t, and currently 2/3 of vendors think their properties are worth more than buyers do…2024 will be interesting. More mortgages will refix higher than lower so headwinds will continue
Indeed. Economy is stalling. How long can the speculative tred water as their debt refixes and becomes a millstone..?
For much longer than you think.
Agree Yvil. We have bugger all but enough to bring down the mortgage on our investment property to break-even, drink a lesser-quality bottle of wine, and wait till the shirt can stay on our back. It does mean staying in the (paid) workforce for a weee bit longer but.
https://www.afr.com/property/residential/house-prices-on-the-coast-have…
House prices on the coast plunge as much as $600,000
Nila SweeneyReporter
Jan 19, 2024 – 12.22pm
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House prices in popular coastal towns such as Byron Bay have slumped by as much as $614,000, as higher interest rates make it tougher for sellers to hold on to their holiday homes and for hopeful buyers to qualify for a loan.
Home values in 27 coastal towns have plummeted by more than $200,000 from their pandemic highs two years ago, while 56 towns lost more than $100,000, analysis by CoreLogic shows.
House prices in Byron Bay have plunged by more than $600,000 since their peak two years ago according to CoreLogic. Danielle Smith
“Many of these areas recorded a spectacular run up in values during the worst of the pandemic, arguably overshooting the mark of what could be considered fair value,” said Tim Lawless, CoreLogic research director.
“It was almost inevitable that these markets would see a drop in values following, in some cases, more than a 50 per cent rise through the pandemic.
“For buyers who were priced out of these markets during the upswing, the fact that values are now well below their record highs does create an opportunity to try again, but under market conditions that are arguably more skewed towards the buyer than the seller – quite the turnaround from the worst of COVID when homes were selling rapidly and prices were surging.”
Aspiring seachanger Anagondanahalli Chidananda from Sydney, is among those who are trying again after missing out during the pandemic.
“I’ve been looking to buy a coastal property for around three years now, but prices were rising so fast and became so unaffordable, so it’s good to see prices coming down a bit,” Mr Chidananda said.
Anagondanahalli Chidananda is hoping to snap up a bargain on the NSW coast. Oscar Colman
A tennis coach and IT professional who owns a house in Girraween in Western Sydney, Mr Chidananda hopes to buy a beachside home within commuting distance to Sydney, such as the Central Coast, Wollongong or Newcastle.
”I’m not looking for anything extravagant, I just want access to the beach, read my books and pursue my hobbies such as tennis,” he said. “Having lived in Western Sydney for nearly two decades, a sea change has been my dream for a very long time. Now with lower prices, I may finally get my beachside home.”
McGrath Byron Bay principal agent Will Phillips said buyers like Mr Chidananda have started returning in droves to the area this year.
“We’ve seen a noticeable surge in demand across Byron Bay from buyers inquiring about open inspections since January 1. So much so that I decided to come back a week early from my holidays,” he said.
“The market has been pretty weak in the past year and a half because the rapid interest rate increases have spooked many buyers.
“We also saw some vendors selling up because they found it tough to afford the increased mortgage repayments, so they’re putting their property on the market before they got into financial distress, so listings increased.”
Byron Bay home values plunged by 24.1 per cent since peaking two years ago, slashing $614,364 off the median to $1.94 million.
Home values in nearby coastal towns also fell sharply from their peaks. Ocean Shores slumped by 25.2 per cent, cutting $405,381 from the median to $1.2 million, while Suffolk Park lost 23.7 per cent, reducing the median by $581,371 to $1.88 million.
Lennox Head tumbled by 23.2 per cent, shaving $406,567 off the median to $1.35 million, while Brunswick Heads sank by 22.3 per cent, taking $320,615 off the median to $1.11 million.
At their peaks, Byron Bay prices soared by 76.4 per cent and Suffolk Park jumped by 84.7 per cent. Values surged by 72.7 per cent in Ocean Shores and rose by 64.7 per cent in Brunswick Heads.
House prices in the Mornington Peninsula also posted large declines since the recent boom.
‘Sharp price adjustments’
Portsea plummeted by 10.2 per cent, or down by $343,993. Sorrento tumbled by 12.6 per cent or a $295,187 drop, while Finders and St Andrews Beach decreased by $232,000 each.
Despite the sharp declines, Portsea is still the most expensive coastal town in the country at $3.03 million median dwelling value, followed by Flinders at $2.33 million, and Sorrento at $2.05 million.
At their pandemic peaks, Portsea prices rose by 65.3 per cent, Sorrento increased by 69.8 per cent and Flinders lifted by 63.7 per cent.
Rob Curtin, managing director of Sotheby’s International Realty in Mornington Peninsula, said vendors had to slash their asking prices significantly to attract buyers.
“We’re seeing sharp price adjustments continue to flow through because a lot of properties are sitting on the market for a long time. Unless vendors adjust their prices, they’re not going to get any buyers,” he said.
Mr Curtain said listings had increased significantly compared to the previous year as the higher interest rates and cost of living had taken their toll on some vendors who decided to offload their property before they were forced to sell.
“There will be a lot more stock coming into the market than normal in the coming weeks so cashed-up buyers should be able to negotiate a good deal,” he said.
Meanwhile, home values in Lorne on the Great Ocean Road, Sunrise Beach on the Sunshine Coast, North Avoca and Wamberal on the Central Coast have lost between $238,000 and $300,000 since their peaks.
By contrast, the prices in the more affordable coastal towns in Queensland’s Wide Bay region such as Moore Park Beach, Elliott Heads and Burnett Heads have surged to new peaks. Since the onset of COVID-19 to December last year, home values jumped by 82.5 per cent, 81.9 per cent and 78.4 per cent respectively.
You could also link an article about houses in Timbuktu, but this article is about auctions in NZ.
Pulitzer Prize-winning journo and author Geraldine Brooks 'boomer-splains' why houses in Sydney are expensive and how the younger avocado munchers will just have to suck it up.
https://www.smh.com.au/national/nsw/we-bought-in-balmain-when-it-was-af…
Brooks says any new housing will always be expensive. But the effect on affordability is not the price of the new housing; it is the indirect effect of extra supply on existing houses. A central estimate is that every 1% increase in the housing stock reduces the cost of housing by 2.5%.
Excellent resource for research on land use regulation and house price costs.
https://stephenhoskins.notion.site/YIMBY-27ae7791bab141058b82d94875ca98…
So it takes almost 10 years for a median Aussie household to save for a 20 per cent home deposit.
Matt Barrie asks the question: "So another 40 years to pay down the principal and another 50 for the interest?"
100 years is a long time.
IMF suggesting that the Aussie banks need to cool their jets.
https://www.afr.com/property/residential/home-loan-curbs-urged-to-cool-…
All depends on where you want to live over there, the variation is huge its a big country, so big I'm sure some people build their own house and nobody even notices it. You have to get realistic and not expect to move into a million dollar house first up.
All depends on where you want to live over there, the variation is huge its a big country, so big I'm sure some people build their own house and nobody even notices it. You have to get realistic and not expect to move into a million dollar house first up.
That's such a boomer thing to say.
I'd have to say it is more realism to be honest, however if there is a threat to the perceived never-ending capital gains of the last 30 years and prices are too high, then naturally many won't want to spend the next 30years paying down a 2 bedroom if they ever want to have the hopes of having a family as everyone has become reliant on profiting off their house that the mentality is ingrained.
Its going to be a steady as she goes year. Desirable places are becoming fewer and fewer as there is already existing houses built there and immigration is still high, consents are falling and the signal is falling interest rates mid year. The crash never eventuated.
Likely to be pretty flat price-wise. Potentially a small increase towards end of year if OCR has been cut a couple of times.
Rents are rising strongly unfortunately, BOP up 9 percent over 12 months. Freaky and if anything FHB will be trapped in a rental
Housemouses view is that house construction is at record levels, nothing to see here
I don’t know about BOP, maybe supply isn’t going gangbusters like Auckland.
Rents are rising strongly unfortunately, BOP up 9 percent over 12 months. Freaky and if anything FHB will be trapped in a rental
Rents only rise to a point that tenants are willing and able to pay. I recommend you study about price elasticity.
Yep. Quite a few of my son’s (25 y.o.) friends have been moving back home, or taking the plunge and sharing a room with a partner (something my son has recently done)
Rents only rise to a point that tenants are willing and able to pay.
This is true, take Australia as an example... wait a minute.
Aussie is not special. Price elasticity applies there as well. F'more as more share of wallet is allocated to shelter, less is spent into the economy thereby putting pressure on business revenue, profit, and wages. That puts pressure on things like land values. It's all synergistic.
In case you missed it JC Aussie rents have been rising and rising for 12 months, up over 20 percent. Higher rent yield also increases return on investment for those horrible rentier people unfortunately. For now at least they are staying away, either they can't buy or they see no prospect of a capital gains free for all
Actually rents in Australia were lagging the CPI from 2010-2021. Because rents go up 20% in a year does not mean that rents go up 20% pa perpetually. It doesn't make sense when you look at income growth with other variables such as the CPI or H'hold Living Indexes.
Last I heard, the ROI on residential housing investment in Aussie was dreadful (approx 4%) and as a benchmark you need to be returning 8-9% to break even.
Someone I know just purchased their house, originally listed asking for 680k for 440k. Was on the market for well over 6 months, cladding looked dodgy but was fine. Allegedly, the vendor just had to sell as they were bleeding money due to their highly leveraged portfolio and it was the only offer.
CV?
Monoclad has hopeless resale regardless even if it is "Okay". Probably okay at a bargain price, live in it for 15 years then bowl it and rebuild.
In December a house sold in Browns Bay 200K above the CV
The population is growing, more coming than leaving
80-90% mortgages are already moved from 2..% to 7%
Interest rates are on the way down
Not everyone can buy a house, look what's happening in Australia
New Zealand belongs to the Chinese, kiwis already lost
house prices 7-10% up this year
More chance of price’s being down 10% this year not sure if you have noticed China house market is in a bad way if anything they will be taking money out of New Zealand
Even panic stations in Vancouver as the short-term rental market was kneecapped by the corrupt govt.
“I feel the rug was pulled from under my feet. I was given short notice.” she said Wednesday
The pending changes have triggered a wave of owners wanting to offload their investments, but the units are too small for most people looking for long-term living, Willey said.
“(There are) probably close to 10 listings (in the Janion building) and nothing has sold since June,” said Willey, noting that throughout the city, out of 60 listings for units used for short-term rentals, only about five have sold.
https://bc.ctvnews.ca/nothing-has-sold-investors-struggling-to-sell-sho…
The two conundrums of this century , water scarcity (increasing) and mass migration. As the world has become more globalised and people become more mobile, we no longer are nomadic wanderers of the plans of Africa, we can simply up and leave when things no longer suit us. As such we will continue to see high migration levels as is allowed (or not when looking at the likes of illegal immigrants in the USA). I hope NZ has thought up a long term strategy here as it will be a challenge to say the least, however as long as we prescribe to the never-ending growth mentality which relies on infinite resources, I won't keep my hopes up.
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