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Three quarters of the properties selling at auction are fetching less than their rating valuation

Property / news
Three quarters of the properties selling at auction are fetching less than their rating valuation
Auction sign

A low level of activity in auction rooms around the country continues, with interest.co.nz monitoring the auctions of just 222 residential properties during the week of August 10 to 16, down from 267 the previous week.

Of those, 81 properties sold under the hammer, giving an overall sales rate of 36%, which was unchanged from the previous week.

The big mover last week was in the number of properties that sold at prices above or equal to their rating valuation, which dropped down to 24% from 35% the previous week.

That suggests around three quarters of the properties selling at auction are fetching prices below their rating valuations.

The number of of properties selling for less than their rating valuation was at its second lowest point in the last two years last week.

The only time it has been lower was for one week in June last year.

Those figures are in line with recent data from property sales websites Trade Me Property and Realestate.co.nz suggesting vendors are dropping their asking prices to meet the market.

Details of the individual properties offered at all of the auctions monitored by interest.co.nz, including the selling prices of the properties that sold, are available on our Residential Auction Results page.

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83 Comments

Luxon was selling his rental for below RV/CV, its catching on

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16

Mostly everything has been selling below cv for a while now…

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0

Who should we believe, interest.co.nz or this: https://www.stuff.co.nz/home-property/350372901/im-calling-it-auckland-…

In a recent email to clients, Traglia said “After months of uncertainty and stagnation, the real estate market has reached its lowest point. And now with the surge of activity observed over the past (fortnight), I’m calling it - prices are poised to commence the rise of the upcycle.”

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Any bottom or peak can only be called with the benefit of hindsight, the rest is speculation.

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14

Agree, and as I have said I think this could be the bottom or close to it (simply because interest rates are probably on the way down).

But its these kinds of anecdotes I am not a fan of:  "And now with the surge of activity observed over the past (fortnight)" - not reflected in the numbers above.

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2

Going to buy then Jimbo, if you are confident it’s the bottom (or close enough) and prices are going to swing upwards?

 

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7

My best guess is we are getting close to the bottom, it might be reached in October. With Spring, and another OCR cut, bang! Might be a tiny uptick late in the year, and a little through first half ‘25. My pick is a circa 6-7% increase over the 2025 calendar year, picking up more in the second half of the year once retail rates get to around 5-5.5%

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3

I don't see how we can be anywhere near the bottom!

The damage coming from layoffs, liquidations, cost of living etc hasn't filtered through - impact still well off.

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23

The questions is whether well off businesses and individuals will now be able to weather the storm - if they believe the OCR will gradually improve over the next 12-24 months and money will start to flow again the elite may decide to spend some cash and retain house/staff and assets til the boom.

Personally i think inflation isnt dead yet - and the challenges will compound. With the next black swan events likely either locally and/or internationally before  and before xmas

 

 

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7

House prices in Auckland fell nearly 10% during the GFC. Yet they started rising, gently, well before unemployment had peaked, in response to lowering interest rates.

The world doesn’t stop if unemployment reaches 6%. The vast majority of people are still employed.

So I am being bold, and you can keep this for posterity (and I will keep yours): HOUSEMOUSE CALLS OCTOBER ‘24 AS THE BOTTOM.

(all things equal, no black swans etc)

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3

Unfortunately you appear to be right

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Hindsight is definitely the way to spot bottoms, you just have to be discrete about it.

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15

in the stock market, the signal that a bottom is in is when all the talk is there is no way we are going back up.... this doesn't seem to be the case right now

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3

There is a saying show me a person who said he bought at the bottom and sold at the top and I'll show you a liar

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0

I'll take the independent objective party over the agent who'll need to return his Lambo if things don't pick up.

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16

The spec crowd all looking to time the market. Agree make your own mind up. I would suggest that looking at replacement construction costs in today's market should go some way to setting value for a property. Obviously apply a filter for age, condition, and style.

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3

How about looking at land prices to set value? Sections at $500- $600k....can drop a lot. 

Not sure how relevant replacement cost is to a run down shyyt box is anyway.  Try that when you trade the corolla on the Tesla.

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8

apply a filter for age, condition, and style

Ok a rot box filter then. Point was cost of construction is unlikely to drop massively regardless of what happens. Apply that and then judge land value. Agree land value is the victim and would drop angle on pricing.

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According to its website, REINZ July data will be published tomorrow at 9am

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3

I suspect it will make many interest.co.nz commentators very happy. 

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1

What are the chances that some commenter will soon claim that the REINZ data has been delayed because it's really bad?

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6

And as if to illustrate your point, see Gecko's comment below.

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3

"I suspect it will make many interest.co.nz commentators very happy. "

Hedging your bets there a tad. lol.

Or have you done a survey of what commentators want? If so, I profusely apologize for not taking part.

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4

It will make NZ Gecko, IT GUY, and NZ Dan (but to name a few) extremely happy. We will have multiple comments on how the Ponzi will have fallen 10% by the end of the year. There will be celebrations and roasting of spruikers!

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0

I will not be extremely happy from a single HPI, but they seem to be compounding in my direction here, adding to my enjoyment of life in correctly calling the market even facing huge opposition from resident Spruikers.

If I was to buy at the actual bottom (that's yet to come) I would be extremely better off then If I had purchased in Dec 23...    

 

 

 

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7

I reckon Yvil bought in Dec 2021 - if not I would put big money on him having bought in the last half of 2021 - the top of the market

He was the biggest spruiker on here in 2022/23 apart from Chat-TTP of course 

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10

To be fair, his spruikerness had calmed down by 2023. 
But yes he was a massive housing cheerleader before then.

But good on him for seeing the light 

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3

Prior to late 2021, most people in NZ believed that house prices in NZ would continue rising and could not fall by much.

Given the change in house prices since November 2021, that belief has now changed for some.
 

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4

When its this bad, delay, delay ,delay.......the REINZ spin doctors have the best buffing compound known to man, on urgent order!

This HPI turd will need specialised and hardcore polishing!!!

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25

whether people agree with you to or not, I appreciate the breadth of language you use and had a good lol at this NZGecko 

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But you can’t polish a turd. Best you can do is roll it in glitter and make it sparkle. 

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5

In Africa they make cow pats dry in sun, they then polish them and use as tiles, proving you can polish sh..

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6

From a FHB perspective, it’s high time we collectively acknowledge this downtrend is entrenched and these latest numbers ARE extremely encouraging. Long may this journey continue to something resembling reality. 

Perhaps those who called August 2023 being the bottom will soon be contemplating another. 

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22

Contemplating another bottom? 

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1

A double bottom ?  (  )(  )

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2

Kim kardashian!

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10

The REINZ HPI is still up 1.3% since August 2023. It may yet be reached but I doubt Zwifter will be calling another bottom until then.

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2

Right now is looking pretty good to buy if you have just got to the point you are looking at entering the market. Not as good as August 2023 but now that interest rates are clearly heading down, it's the time to get in before the housing market turns. Probably a pretty small window of opportunity before summer kicks off and rates dive further. Considering it usually takes months to find something decent, I would be actively looking right now.

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3

Be quick! FOMO! Don't delay! Last chance saloon!

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12

We must collectively acknowledge this downtrend is entrenched!

Oh, hang on a second. Why must we acknowledge this downtrend is entrenched?

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OK, of course it's an individuals call but can you at least acknowledge that from a FHB's perspective these numbers offer continued encouragement? Who really are the DGM's here? 

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Because while more properties are being listed than are being sold the downturn is entrenched.

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8

Ding ding ding. Bingo 

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6

Are you a first home buyer?

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Iceman, you're obviously someone who often confuses this site with Grindr. You keep popping up and making unwanted overtures to which I can say in no uncertain terms - I'm really not interested... 

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9

Mate - I asked you a question, that’s it.

That time of the month for you? So easily triggered….

But you’re in your 50s and a FHB who has rapidly falling TDs as “investments”, so I understand….

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@Iceman, I think you are a bit confused.. it was TTP who claimed to be FHB!
TTP and RP are poles apart!

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5

Auction activity at low levels, selling prices falling

Great, main headline, thank you for clearly separating the number of sales and prices.

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6

Where is the data for Wellington? Thanks

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0

blew away from the recent storm!

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4

Things may feel better once ACC drop their 2024 CVs....   wait a minute.

Housing normally has sharper peaks then valleys here is an example

Its not common for a housing market to bounce as violently off a low as it is to fall off a peak.   This its always more important to sell as near the peak as you can, when buying the market does not normally run away from you as fast.  

 

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4

ANZ slashed its short-term home-loan rates today, due to 'really competitive environment'.

You won't see these house prices for much longer, they'll be higher. 

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6

doesnt 'really competitive environment' mean that hardly anyone is borrowing money and the few that are are watching the pennies and going with the best deal for mortgages AND houses. so for a bank to grow or sustain their mortgage book they gotta drop their pants on the rates

not sure its gonna push house prices (or bank margins) up anytime soon.

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14

Tony Alexander says house prices will be higher by the end of the year. 

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3

I think they will be about the same as now. Drop a bit more by October then rise a little bit by Xmas

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0

Well if he says its so, its worth betting the house on it, he is so good at predicting house price movements.

 

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14

Didn't I see an article on here last week where house prices were dropping 10K a month on average this year (ok, so, it was actually 9K a month because it was 2.x K  per week, but anyway). It does not seem to be stabilizing. I'd say now many of those struggling will throw houses on the market and add to the supply hoping, hoping someone will be able to borrow (at slightly cheaper rates) and take if off their hands......but, they will be adding to supply and pushing prices down further....

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7

there is no use pointing at facts, the spruikers are pointing at next years prices.

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6

You are must really starving and scaping the shisthouse floor, for edible protein there Winger .......needing to quote the totally disreputed TA! 
TA is a National laughing stock.

You are a desperado Winger.....to be upspruiking the market, for the RiverheadSwamplands mega onsale?   If only, the native stilts had pockets and boundless cash reserves, you'd be onto a winner:)

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12

Tony Alexander probably has more credibility than many here who said interest rates would stay the same, or even rise.

He said rates would fall by 1% by March next year, so he's probably not too far out.

Been out West lately? It's chaos - massive road works, Westgate under siege by hundreds of workers constructing new buildings, a new industrial subdivision, massive new retirement village under construction, lots of derelict buildings ready for the wrecking ball,  thousands of cones, traffic jams, new housing subdivisions, new subdivisions being bulldozed in Riverhead, it's manic.

The Riverhead Reichsfuhrer is going to make a lot of money. 

 

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5

Lets see. personally i think Orr and Tony might have had the same economics teacher.

Joking aside (that they had an economics teacher) ... remember that hatever they say is simply biased to spin the narrative the outcomes they might want rather than based on any actual forecasting. And its pretty easy to guess at their desired outcomes based on how they are paid - which is totally based on specific outcomes for professions or the economy.

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6

"And its pretty easy to guess at their desired outcomes based on how they are paid - which is totally based on specific outcomes for professions or the economy."

 

Is this Tony Alexander's catch phrase? (for best effect, have sound on)

https://youtu.be/bRl_sBg6GX8?t=4

 

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1

House price’s are way overpriced in New Zealand compared to wages, the 20% crash over last couple of years still has average wage couples no chance of purchasing a home in most area’s. By lowing OCR you can be sure inflation will be back very soon causing more pain for us all.

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9

Updated RVs “August ‘24” are now available on homes.co.nz  .  

From my random sampling today, many of them seem somewhat optimistic, ie higher than 2021 RVs.. 

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1

For which council?

 

Can't see anything in Auckland.

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0

i can’t tell. all over auckland region, on homes.co.nz …

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0

Winter is over, rate is starting to drop, this won't last long. 

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2

Was searching on 1-3 bedroom houses across 5 suburbs in Auckland:Mt Eden, Kingsland, Sandringham, Grey Lynn and Eden Terrace (not so many houses there). Those were the only two filters. It returned 51 results. Probably at least half of a regular number. 

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0

Actually interest costs are still increasing! - As fixed loans roll off low rates from 3,4,5 years ago they are hit hard with triple the interest costs so the average interest rates on all mortgages hasn't peaked yet

(but lets not mention that in news headlines or RE agent speak as its not in the property ponzi narrative)

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3

yeah 6.85% 6 month fix is such a BARGAIN

Is that both hands dr?

 

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3

Yes and that was essentially my point in another article on the economy and why I think the economic slump will continue to at least this time next year. 

But housing is a slightly different thing. People who are looking to BUY in 2-3 months time will be looking at interest rates lower than what they are today, or a few weeks ago. This will start to incrementally increase buying power, as rates incrementally get cut.

I think that is quite a different phenomenon to the wider economic impact of a still substantial number of people having to re-mortgage at higher rates compared to what they have been on for 1-2 years.

I haven’t expressed that very elegantly 

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0

Neighbour selling up. Deceased estate. 

Premium suburb. Solid listing. Way lower than 2017 prices. 

Looks like it's listed for double the 2005 price. What was the spruiker catch-phrase again? Houses double every 7 or 10 years. How about every 20 years? Doesn't sound quite as good does it?

 

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7

Changed to asking price of $1.3M, at the peak Homes had it at $2.6M.

2021 CV is $2.1M

50% fall from peak. Woowza. 

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6

Wouldn’t put any value on the peak values on homes. It’s been widely trashed here, and rightly so. 

It had our place on a silly value at the peak silly season that was at least 20% higher than realistic

Having said that, even if the realistic peak value was 2 mill, that’s a big drop

Even so, I am a little suspicious, might there be issues with the property? (eg, it’s a leaker) 

Edit - I see you have added the 2021 CV. They often don’t pick up on leaky issues 

 

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I am picking a leaker of a detached townhouse on about 300- 400 square metres in a central-ish Auckland suburb

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Gee just been flicking through TradeMe. Asking prices 30% below CV seem common.

It’s an incredibly sickly market.

IT Guy might yet be right with his -10% call for 2024

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3

Asking prices 30% below CV seem common.

It’s an incredibly sickly market.

 

Can you define a "sickly market"?

Asking prices 30% below CV are irrelevant when house prices are looked at through the lens of housing affordability metrics.

1) https://www.stuff.co.nz/money/350374488/how-much-do-you-need-earn-comfo…

2) https://www.nzherald.co.nz/nz/housing-affordability-the-income-kiwi-fam…

 

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Well obviously sickly in terms of the key players in the market on the selling side

 

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"the key players in the market on the selling side"

 

Are you referring to specifically to sellers in the new build market (who are more easily identified)? 

There are:

1) sellers in the existing dwelling market

https://www.oneroof.co.nz/news/leasehold-liquidation-owner-still-smilin…

"The owner of all four walked away with $381,300 after more than 100 bids were made on the properties."

2) sellers in the new build market

a) https://www.oneroof.co.nz/news/latest-news/developers-roll-out-the-deal…

b) https://www.oneroof.co.nz/news/latest-news/ockham-doing-it-again-with-b…

Note that the latter is a sponsored article by the real estate agent.

c) https://www.williamscorporation.co.nz/our-locations/

d) https://duval.co.nz/our-developments/

More competition by sellers results in a buyer's market (i.e. more choice to buyers). 

Hearing reports that new builds are less attractive relative to existing dwelling market for some buyers due to tax changes.

In Auckland, 30% of dwellings listed for sale are newbuilds, with the other 70% being existing dwellings.

 

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Nope not a leaker. Villa on villa street in villa capital of New Zealand. Similar one on the same street sold for $1.94 a year ago. 

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Can you share a link? Or Street name. 

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All aboard folks, the bottom's in. Who wants to be a millionaire?

https://www.stuff.co.nz/home-property/350372901/im-calling-it-auckland-…

 

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Someone forgot to tell all the sellers that they would get more now then last month....

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