There was quite a significant drop in the number of properties offered at the latest auctions but a slight increase in the overall sales rate.
Interest.co.nz monitored the auctions of 304 residential properties around the country in the week of 6-12 July, down from 348 the previous week.
The drop in auction activity was probably due to the fact that the previous week's auction activity was pushed higher because it followed a short week for the Matariki holiday.
Many vendors would have delayed their auction during the short week until the following week, which would have pushed up the following week's numbers.
So the latest result was probably a return to normal after the disruption of a short week two weeks previously.
However the sales rate was up, with 94 properties selling under the hammer at the latest auctions, giving an overall sales rate of 31%, up from 28% the previous week, which was more or less where it's been for the last couple of months.
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.
| Residential Auction Results | ||||
| at auctions monitored by interest.co.nz | ||||
| 6-12 July 2024 | ||||
| District | Total | Sold | % Sold | % of selling prices above or equal to rating valuation |
| Northland | 13 | 2 | 15% | 0 |
| Auckland Region | 216 | 67 | 31% | 22% |
| -Rodney | 15 | 2 | 13% | 0 |
| -North Shore | 36 | 12 | 33% | 44% |
| -Waitakere | 18 | 6 | 33% | 17% |
| -Central suburbs | 58 | 17 | 29% | 13% |
| -Manukau | 59 | 22 | 37% | 24% |
| -Papakura | 12 | 2 | 17% | 0 |
| -Franklin | 17 | 6 | 35% | 20% |
| -Waiheke Island | 1 | 0 | 0 | 0 |
| Coromandel | 3 | 2 | 67% | 0 |
| Waikato | 15 | 2 | 13% | 0 |
| Bay of Plenty | 23 | 6 | 26% | 33% |
| Hawke's Bay | 3 | 1 | 33% | 0 |
| Wellington | 4 | 3 | 75% | 0 |
| Canterbury | 15 | 6 | 40% | 100% |
| Central Otago/Lakes | 12 | 5 | 42% | 100% |
| All of Aotearoa | 304 | 94 | 31% | 28% |
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53 Comments
Yes, but will be a very slow journey upwards. Lots of inventory which will take a 1-3 years to slowly come down.
These things take time, just like the downward cycle which commenced circa 2 years ago. Sentiment changes, but very slowly. Not expecting another massive boom because of DTIs but there will def be gains of substance by the end of the decade.
So you’re still going to get people jumping up and down by monthly data which will be slightly down or flat for now. But by their own theory - when rates go up prices go down, the reverse is true too.
Want more evidence of sentiment and change - go look at Heralds article of kiwis returning home from Aussie, because it’s just as bad as here.
Mortgage rates started dropping over the last 3 months - during those same 3 months the HPI has started accelerating downwards.
So rates have already been dropping, but house prices have not been increasing or even stopped falling - they're falling faster.
So how low and fast do mortgage rates need to drop to stop the current momentum?
The Dead Cat Bounce is now done and away down further, she blows!!!!
The hopium of the minuscule retail mortgage rate adjustment won't save a still massively overpriced market from the savage price cuts that are comming as the NZ economy, now skirting the dangerious reefy shallows, crashes heavy, into solid rocks.
The recent weeks slight mortgage rate hopium, giving the obviously Overleveraged Gamblers some form of "dead as a door nail" market copium, will come to nought.
Housing Market confidence is shattered to pieces now, akin to the bereaft aftermath of the 1987 share market crash. Same mental poisoning, of the debt gambling well, will occur here.
This once road, to untold untaxed riches, is now paved with negative equity and Bankers " Debt Default Crisis" team numbers swelling, as Debt Gamblers learn hard life lessons.
But let's stay positive, once mortgage rates are written with a 3.8% again, the market may stabilise. Which decade this is? only a Debt Gambler need ponder.....
Untill then, it's watchout below, this sucker is going down.
To the vested, the bottom of the cycle is always imminent, as is the next upcycle - boom.
On the subject of house prices, I am constantly amazed how the vested are quick to over-emphasize the effect incremental reductions in borrowing rates have yet, these same individuals conveniently minimalize/trivialize the known delayed effect tight monetary cycles have on spending behavior and ongoing joblessness as a whole - they are blinded.
With stretched fundamentals on full display, this reset was forewarned of by few prior to COVID, yet ignored by the inebriated many. Now that it's here, it's ruining lives in real time and will do so for years to come. I think it's going to be a long and deep downturn "L". that will likely reset outdated and unrealistic expectations - edit.
I wouldn’t call myself a DGM, but the rhetoric around small interest rate cuts boosting the property market are hard to understand. I just don’t see it. If I look at previous recessions, say the last 3 major ones, when the rates are cut to provide stimulus, there is a lag before it flows through the economy to boost aggregate demand as credit worthiness has been destroyed during the demand destruction phase. I get that COVID provided one of the biggest housing market rises of all time, but if you look at the work of economists like Werner, the importance of where credit with QE is directed in the overall inflation picture (Funding for Lending). So I guess what I am getting at is it’s hard to see any real rate cuts that could provide the level of credit growth to support the COVID level house prices as I don’t see where the credit expansion is coming from? I also note Jfoe has some graphs on the amount of credit expansion required just to keep things running as % of GDP and that was trending down. Thoughts?
Too many have borrowed too much, any extra $$$ via interest rate cuts will go back into repayments.
Maybe a few FHBers will be tempted into the market once rates drop to 5.5% 2year, but for those in the middle of the market in Auckland, the steps up the property ladder are huge, who wants to take on another 500k here that's an extra 3k to find after tax a month.....
The market is screwed, better to pay down your existing loan while the market bottoms, its not going to run away this time, RBNZ will keep OCR restrictive enough to keep inflation in band, its going to be a tough decade while households dig deep and pay down borrowings without that feel good factor as the underlying asset moves up more each year then you earn....
The concept of a house that makes more in capital gains then you do at work seems to have left the building.
I should add that even post - GFC wasn’t too bad. If you were in residential construction or development-related areas it was hard for some. But the job pain wasn’t too widespread. And there was China, rapidly lower interest rates, and ChCh rebuild to the rescue.
It will be much more widespread this time. So even for many people aged 35-50 this job market will be unprecedented
Checking on auction link, you would shocked by how much vendors would accepted the lower price.
Few months ago, it was hardly to find 20% off the CV price, but now, there were lots 20-30% off properties.
off course, people will say, the price drop for some properties are have reason, but I remembered a horrible condition house in 600 square meters land located in Massey area, was sold almost million three years ago because investors believes the land has big value. But now, it would hardly sold by 600,000.
cut to short, the property market trends change completely, every buyer worried the price drop further after they bought…
That's why the 10% drop in ask prices recently is massive, people will offer another 10% below that. You will see clearance rates increase but not because buyers have met vendors, its vendors now waking up to the fact they have to meet the market, clearance is coming and a decent 10% down from here may form a functional market. The market needs clearance to form the bottom, and build confidence.
Cheap?? what does this mean?
Easy, let me help you, on some obvious metrics:
1. Cheap: Where the total rental ability/income, would represent a 10%+ yield, on the total purchase price.
- This may leave the owner with an actual profit, after the cost of Capital, Rates and local body fees, Insurances, Maintenance costs. Eg: A $100 Asset would need a $10 Return every year and increasing at 3 to 6% annually, to keep up with an expected higher, future inflation.
2. Fair Value: Where the total rental ability/income, would represent a 7 to 9% yield, on the total purchase price.
- This may just cover the actual costs, after the cost of Capital, Rates and local body fees, Insurances, Maintenance costs.
Below 7% yields, has anyone making a major loss and willingly buying into a Ponzi Like scheme. These earnings losses will amplify, alongside any likely Capital losses which is a common market concern, going forward.
Currently, the yield on many properties is just 2 to 3% in the larger cities (3 to 5% in the small towns)
- WARNING-WARNING-WARNING-. Pull up the nose! Crash imminent.
So, the only way to buy at reasonable 7% + yields, with much reduced risks (of low to negative equity) or a future forced mortgagee sale, is for current values to fall yet another -15 to -30%.
It's all on track, take your time, wait and offer well below asking.
Don't be the Real Estate Agents Useful Idiot !!
Buyers should only offer, within the range of 2012 to 2015 valuations/CVs. They are coming back into fashion:)
The ChCh market is not shaky at all!
There are certainly fewer buyers than there was a couple of years ago but prices are holding up.
Yes the problem is the debt servicing used by the Banks at around 9% and yet the interest rates will never ever get to that rate.
There is plenty of opportunities in every market and currently now is a good time as there is nothing surer that the ChCh market is going to have
increased prices.
Rents are continuing to increase as demand is huge.
https://homes.co.nz/address/auckland/freemans-bay/11-anglesea-street/V8…
sold for 53% of RV, location location location, needs some TLC
The thing is that so many on here think that they know about financial things and the housing market!
Reality is that most just continue to post the same stuff year in and year out and for what benefit, snd they reslly do not know whst they are talking about!
I can assure you from experience in all markets that there is millions to be made at any stage!
If you want to decry what investors/speculators do with property and you feel great about that then that is your perogative.
What I do guarantee is that it will not financially be of any benefit to yourself.
Putting money into the Auckland market has never ever been on my agenda.
Too far to travel to do improvements and like to know what is happening and can not when I am so far away.
Good on those in Auckland that have invested and done well, they deserve to be rewarded for putting in the effort, far better than measley Term Deposit returns.
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