Auction rooms slowly coming back to life

Property / news

The overall sales rate has been 41% at the early auctions held so far this year

27th Jan 24, 7:02am by Greg Ninness

January is usually a quiet month for residential property auction activity, with most agents focusing on finalising new listings and getting their marketing campaigns underway.

That generally means activity doesn't pick up strongly until February, with March usually being the busiest month of the year.

Even so, the auction rooms are slowly coming back to life after the Christmas/New Year break and interest.co.nz has monitored 74 residential property auctions around the country up until 26 January this year.

Of those, 30 properties sold under the hammer, giving an overall sales rate of 41%.

Of the properties that sold, 46% achieved prices that were above or equal to their rating valuations (where this could be identified), with 54% selling for less than their rating valuation.

It would be nice to think that this could give us a clue as to how busy or slow activity might be for the rest of the season, but realistically, the numbers are still too low to give much of an insight into the state of the market.

However we expect auction activity to start picking up strongly over the next couple of weeks, which should give us a better idea of the strength of the market's pulse.

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24 Comments

by mikekirk29 | 27th Jan 24, 7:41am 1706294481

Sales numbers are crux

Barfoots average annual sales last 10 years were 10300

Only exceeded that in one year which was 2021 the year of silly interest rates. Last 12 months was well down and no Indic of recovery in Auckland

by tothepoint | 27th Jan 24, 1:29pm 1706315377

Housing market activity may well be picking up......

But the recovery is patchy. Expect the same to continue for the foreseeable future.

TTP

by MikeM | 27th Jan 24, 7:45am 1706294730

There will be a continuing pattern of picking up and dropping off until there's some fundamental change in the current conditions.

by Pa1nter | 27th Jan 24, 7:48am 1706294886

It's like a phony war.

Unless this is the point they let it fail.

But Id say there's a few kicks left in the can.

by IT GUY | 27th Jan 24, 7:53am 1706295230

They have to inflate the debt away, it will take a decade,

by Pa1nter | 27th Jan 24, 8:04am 1706295840

Assuming they just won't write more.

Which actually seems to be the more commonly used option.

by JimboJones | 27th Jan 24, 7:55am 1706295328

Maybe investors are starting to join the party again. If you think interest rates are heading down this year then it’s likely house prices will go up to some extent. Even just 2 or 3% gain on the banks money works out to be a handsome return on your own deposit. And it will be tax free again after a 2 year period.

by IT GUY | 27th Jan 24, 10:16am 1706303773

Residential property is a lousey investment , mostly cash flow negitive with very low rental yields. The only incentive is hoped for capital gains.... you would be better off investing in aussie property.... or commercial here. A Leveraged property play in such a lousey fundamental valuation market is nuts - hence sales to investors are low. Maybe if National makes all interest payments tax deductable just maybe but it would still need capital gains to make things profitable... one shocking tennent and you have lost 3-4 years of gains. It SO made sense 5-10 years ago, now everyone in is a bag holder and the sharks can just wait. Subdivision is the one difference, but thats not really investment, its developement and that comes with its own risks.

by DavidJ | 27th Jan 24, 11:51am 1706309461

so true .. i look at these apartment investors, and just think why would you - makes no sense at all

by 1689 Baptist | 27th Jan 24, 12:46pm 1706312768

I have invested in apartments and freehold properties. It worked well as a portfolio mix. The apartments had great yield and cash flow which serviced the mortgage repayments on the freehold property where capital gains were foreseen. I wouldn't have been able to buy my second house without buying an apartment first. Just a disclaimer this wasn't in NZ.

by Zwifter | 27th Jan 24, 12:46pm 1706312806

Unfortunately you cannot "Just wait" but I guess those that do will find that out by themselves in 10 years time.

by Pa1nter | 27th Jan 24, 5:39pm 1706330343

You've obviously not been paying attention. This time it's different. Different than the last time we were told it was different, and it actually got worse.

by IT GUY | 27th Jan 24, 8:36pm 1706340997

Be Quick, please please please please be quick.... Take a look at Barfoot and Thompson Millwater window, quite a few builder needs sold ads.... and very few (2 from 28 sign boards.....) sold. I see nothing but pain for this suburb in the next 2 years. Meanwhile a friend just paid 1.18 cv for a rural property. People are still fleeing Auckland Central.

by Pa1nter | 27th Jan 24, 8:44pm 1706341489

Markets rise and fall, but virtually everything is pointing towards rising home ownership and acquisition costs over the long term.

Some opportunists will benefit in the short term, but anyone eagerly waiting the trend to reverse over the longer term in the hopes of a cheaper entry is likely to be disappointed.

People are indeed fleeing central Auckland, but at a lower rate than they're filling it. Not that I advocate living in Auckland, it's just what's happening.

by IT GUY | 27th Jan 24, 9:59pm 1706345995

rising home ownership

Nothing points to this, ownership is falling as it's more unaffordable , you willing to share the magic stats behind rising home ownership? I call BS

by Flying high | 27th Jan 24, 10:15pm 1706346928

Home ownership has fallen since the 90s when 75 percent of homes were owner occupied. Now two thirds ish are owner occupied but over the last four or five years since 2019 that could be changing with higher mix of FHB.

The latest census might confirm but dont hold your breath waiting for the figures

by Pa1nter | 27th Jan 24, 11:12pm 1706350342

I was talking specifically about the costs, in terms of initial purchase and then holding (i.e. ownership - rates, insurances, mortgages, improvements and maintenance). The actual percentage of owners relative to the overall population will fall.

"Be in quick", as an overall direction, is relative, because the longer you leave it, the lower your chances. People instead are very confused by what's going on right at the moment, somehow being a permanent state.

If in the off chance this is the kick off point for terminal financial ruin across most of the developed and developing world, then you're probably screwed, owner or not.

by JimboJones | 27th Jan 24, 6:53pm 1706334839

You’re joking right? Tax free capital gains on money you don’t own is a bad investment?

I could put $100k into a business or shares and make 10% in a year and end up with 10k profit minus tax, or borrow 900k, make a 3% capital gain and end up with 30k profit tax free.

Disclaimer; I have never owned investment property, but I can see why people do.

by IT GUY | 27th Jan 24, 8:39pm 1706341176

So you have never made a leveraged investment, with other peoples money......... next. Perhaps you could try that easy game called FX Trading..... What amazes me is the conditioning in NZ that House prices can only rise..... even when they are at almost record levels of un-affordability. Demographics is worth a look as well, lots of people WILL NEED to sell...

by Wrong John | 27th Jan 24, 8:49pm 1706341762

The Farmers apartments in Tauranga are just beginning to come to the market. Whispers of an eight figure asking price for the top floor [12 I think] which overlooks a dead city centre of aging buildings all needing to be rebuilt, with views of the water disappearing behind other new buildings being built as we speak. What can do wrong?

by IT GUY | 27th Jan 24, 10:03pm 1706346214

I think the Bay has lost its appeal, traffic, too many other oldies approaching death who have paid for the house but cannot afford an RSA meal.... nah its done. I have fond memories but would hate to retire there now.

by Flying high | 27th Jan 24, 10:19pm 1706347154

BOP is a good place for boating, mostly all of nz is good. Buy a cheap house beachside in an under-appreciated area and watch it climb in value. Retire rich

by IT GUY | 28th Jan 24, 5:21pm 1706415665

When it comes to catching big snapper , hard to pass the kaipara but its not rated by many, I love it.

long may the rest of Auckland hate it

by kohimarama | 29th Jan 24, 8:19am 1706469569

The real estate agents are working the page trying to convince you that a dying commercial property market or apartments are a good investment.

the US has a 34 trillion dollar deficit. It took less than 6 months to add that last trillion dollar’s. Remember it’s compounding interest. 1 trillion dollars is a million, million.

The Chinese pull a figure out of thin air for their economy. There’s no way of checking the figures in a communist, dictatorship. But their biggest property companies cannot pay 💰 for their debts. This is being hidden by the Chinese government. They are falling all over the place. Don’t listen 👂 to these lying real estate agents.