Auction room activity maintained its recent spring momentum, although the sales rate slipped slightly at the latest residential property auctions monitored by interest.co.nz.
Altogether interest.co.nz monitored 340 residential auctions around the country in the week of 12-18 October, up from 289 the previous week, but down slightly from 343 and 356 in the two weeks prior to that.
Of the 340 properties on offer at the latest auctions,121 sold under the hammer, giving an overall sales rate of 36%, which was the first time it's been under 40% in the last six weeks.
There were no real surprises in the latest results.
Auction room activity is likely to continue to increase over the next couple of months, although there will also likely be some weekly ups and downs.
The latest results are pretty much what we would expect at this time of year.
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.
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91 Comments
The bottom is now starting to get deeper..
We know that 3000 houses are being withdrawn from sale per month adding to a mounting overhang of potential future listings. At current still (lofty) prices, is more cheap debt on low deposits really conducive to an imminent floor / recovery in prices and on increased volume? This recovery, that from a capital gain hungry investors perspective, would need to defray todays holding costs plus more......
In this buyers market there need be no FOMO. For some time to come, discerning buyers know they'll be spoilt for choice.
"The latest results are pretty much what we would expect at this time of year."
I'll take your word for that. But even as prices 'slide' across The Ditch, their clearance rates are still ~60% and about twice what the expected rate is here. At some stage, Vendors will realise what they have to do to get the turnover up. And withdrawing their properties from market isn't it.
Doesn't our clearance rate struggle to hit 50%, even in high demand periods?
Venders will re-adjust their price expectations if they've significant pressure to sell. Thanks to the RBNZ tightening lending rules the past decade or so, there seems to be a lot less mortgages under significant pressure.
So likely we'd need more job losses as a catalyst. Will that happen before interest rates start with a 4?
Let's hope we can avoid that catalyst. The tools are all there. All we need is the political will to enforce them and avoid the pain of job losses. But as you suggest, higher unemployment looks like our chosen alternative.
It is really hard to tell. I still have us being harmed by "global economic event" on my bingo card.
I won't pin much hope on discretionary spending from lower mortgage rates saving the economy. That only happens if households once again feel confident to spend every last dime from lower mortgage payments elsewhere in the economy.
On the other hand, rate normalisation could put a floor on our sliding economy if it brings construction back to life.
Aside from greenfield new residential, construction seems surprisingly active.
As it does in many downturns, the nature of the demand changes.
What we're viewing as economic end of times could just be a reversion to a norm close to what we'd have had without COVID. Maybe plus the downfall of businesses/jobs that got stretched thin due to various dynamics of COVID, who now can't continue with the onset of subdued demand.
I agree. There is substantial brownfield activity in all the decent suburbs of Wellington fringe. Many houses here are well-past their operational life and sit on large pieces of land.
The cost and compliance to build new is nuts, interest rates are too high, and the selling market's encouraging people to stay put.
Also seeing a lot of infrastructure/industrial work going on. A lot was deferred due to the issues getting things done the last few years.
Construction back to life??
I see hundreds of new builds sitting around unsold just in my travels weekly......some of which are unsold for 6 months or more!
No construction rebound till massive, stale inventory is cleared. Then the hidden iceberg, of "withdrawn from sale" properties, çome out of the closet....
No construction rebound for a very long time!
You've confused "construction" with "new housing building".
Once the current flush of both CRE and Resi builds finish.......it will be skinny cat, starvation alley in most construction.
Demand is falling like a 1kg Gold ingot as supply is ballooning .......hard times in the building industry is just beginning.
Interest rate drops are too small and far too late. Carnage is already in the pipe.
Ok well I can only comment from the position of someone with real time observation of what's happening in the current project pipeline, and future quoted works.
Obviously the views more accurate from your armchair.
I agree with you on a logical economic basis…but I just can’t help to think if rates get slashed, which without govt support is looking like the only play Adrian has, then I don’t think it will take as long as a few of you have said for that herd mentality of “we’re rich again” to kick in…obviously not overnight, but give it 12 odd months for sentiment to get strong enough to give a feeling of job security then a lot of people who have felt broke over the last few years will start to revenge spend & “treat yo self” like drunken sailors…there are more of them than there are conservative thinkers who will top up the household war chest first…ultimately en masse we’re not that smart…or we wouldn’t be here in the first place 🤷🏻♂️😂
For the spruikers saying we're not back to 2017 prices: 2021 CV 2.225m. Current Asking Price 1.45m. 2014 CV 1.65m https://www.trademe.co.nz/a/property/residential/sale/auckland/rodney/a…
What a pointless cherry picked example. This is a plaster home that would likely need building replacement cost just to reclad.
65% are selling at or above CV on the Shore that is a fact.
Anything needing work is currently at a significant discount.
Is about all we can ascertain.
They aren't picking cherries, they are turd picking.
Look guys, this one musta had carrots for tea!
Well the whole market is really just a giant turd right now so yes they be turd picking.
Difference between CV and Asking is 800k. So 800k to reclad?
Could be around $500k to reclad. And then you'd invariably lean towards doing the inside, so plus another $150-$250k. Add in around a year of holding costs to get that done (optimistic), and the high risk, big headache nature of taking the project on, and it's possibly still too expensive.
I've been involved in dozens of these sorts of jobs, and they're rarely financially lucrative for anyone.
65% are selling at or above CV on the Shore that is a fact.
Interesting maths Tui. 50 were auctioned on the North Shore. 8 sold above RV. How do you get 65%
Looking at a bigger sample size a few days ago and it’s 65%. Yes this latest batch is 40% smart ass.
Yesirrreeee.....seeing a lot transacting in 2024 at near 2017 to 2018 prices now.
Will the NZ Crashing housing market, dam hold, at the next wall of past valuations of 2015???.....as I see these prices comming back into fashion, in 2025 and 2026.
OMG what a bargain - you should buy it Kraken! Hopefully you have an extra $500k-$700k+++ for a full reclad...
It's hard to tell if all these reporters of value drops are actually looking for a house to buy, or just have a really sad hobby.
Yeah its sad... they ignore the facts like the neighbouring property selling in Feb 2024 for 3.5 million with a CV 2.85.million https://homes.co.nz/address/whangaparaoa/arkles-bay/9-arkles-strand/VOY…
And to get that sort of value from the "cheap" property, you're probably dropping 1.5-2 mill on it.
Hey, that's my hobby! It could pay off for some. I suspect bargains in the current market are more likely to be found with properties that need work.
"Hey, that's my hobby! "
Property projects (i.e property renovating and / or property development) is your hobby?
No, looking for unusual price drops and tragic sales.
"No, looking for unusual price drops and tragic sales."
Do you report those on your substack?
What's your problem?
What's your problem?
No problem. Just curious.
It's weird how accusations of being a real estate agent get thrown around. Not that there is anything wrong with being an agent. However, it is commonly known and often remarked upon, that Kiwis are obsessed with real estate. Every other household appears to own a rental property or two. Thus the property market is of interest to not just agents but many people. Many immigrants are keen on it too. Rental property income is widely seen as a way to supplement income in retirement. Many households will anticipate entering retirement with super, rental income and some other modest assets, like term deposits and shares. This is widely recognised as a sensible and conservative approach to looking after one's future. So it should come as no surprise to readers that many commenters have what may appear to be an obsession with property.
Thank you for your response.
I just thought perhaps you might have been the author behind that substack so I merely asked the question.
"It's weird how accusations of being a real estate agent get thrown around. Not that there is anything wrong with being an agent"
The readership has a variety of backgrounds. Based on the comments by various commenters, there seem to be a few property industry related participants - real estate agents, builders, property mentors, mortgage brokers, property traders, property developers, architects, hotel owners, property investors, tradies, etc
Each commenter in the community here has a unique perspective given their lived experience and employment. Great community to try to understand the diverse viewpoints, perspective and where they're coming from.
Some do seem to have an undisclosed vested financial self interest and their own hidden agenda however.
At times, the tone and comments can become quite tribal beyond a coherent discussion of issues being discussed.
Interest rate drops like a fart in the wind.
This sold at auction on Friday for 951k, CV 1.84m:
https://homes.co.nz/address/auckland/te-atatu-peninsula/99-matipo-road/…
Well under 2017 CV
The Executors have instructed to completely ignore the CV and all website price estimates, as circumstances dictate the need to sell before/at auction. Someone is going to hit the jackpot, so make sure it’s you!
Opportunity knocks for all bargain hunters, but in particular for builders, developers, and handymen/women extraordinaires!
House needs work, relatives want money ASAP.
These historic values don't involve any appraisal of the state of repairs of the properties. They're just basic aggregates based on size, listed amenities, and relative values to nearby sales.
That size land in that area alone would get $1.5m if there wasn't even a house there back in 2021.
You got the desperation part right though. Thats how prices come down.
It may not be desperation, possibly just eagerness to get a windfall. I've seen a number of these sales recently.
Eagarness to get a windfall that is half the CV?
I've heard this sort of talk before. Are you an REA?
A lot of people looking at an inheritance aren't necessarily as savvy as you and me. It's just what I have observed. It could be another reason why prices come down. It doesn't seem so remarkable. I'm a computer engineer.
its not a great place, IMHO they got what its worth right now.
Toye, this property sold at auction today for 31% above CV. All is well.
https://www.barfoot.co.nz/property/residential/rodney-district/stanmore…
Did you have to search the country for that one? I ran into mine when looking @ auctions results on Friday.
How many at about 50% over CV?
No, it was the only auction on Saturday.
That size land in that area alone would get $1.5m if there wasn't even a house there back in 2021.
Sure, but projects and pieces of dirt are currently unappealing.
Nothing is appealing in property at current prices and rates.
Land is suddenly worth nothing because developers are all huddling together like a school of fish in hopes that the market improves and that the big bag economy shark doesn't take a bite out of them.
Williams Corp and Wolfbrook dead companies walking.
Land's worth less because building is expensive, as is credit.
There's always degrees of desirability in property, with varying degrees of price movement depending on the wider economy.
Get back to us when a newer or well renovated property in a highly desirable area starts halving in price.
Aren't we changing the goalposts now.
"Tell me when property prices are falling only for new properties in expensive suburbs, not average ones"
Now if only the property prices weren't primarily driven by houses that sold the most - some would say, those in average suburbs.
I figured we were only cherry picking extremes.
Williams Corporation and Wolfbrook are both trading very well!
You really havent got a clue what you are talking about!
Get back to us when you know for a fact that they have not paid their trades people or missed a single payment to their investors!
"Get back to us when you know for a fact that they have not paid their trades people or missed a single payment to their investors!"
Here's the thing, for any supplier, tradie or buyer of property of an uncompleted property, that will be too late - by the time that happens, they could become unsecured creditors if things get really bad.
If in doubt, stay away. Most people can choose to go about their daily lives without interacting whatsoever with those two companies.
CAVEAT EMPTOR.
Williams Corporation and Wolfbrook are both trading well and both financially stable!
People that make comments when they are ignorant of the facts should not commenting.
If these people actually spent the time to do research before commenting would be far more beneficial for everyone.
Tall Poppy Syndrome is rife in NZ.
Sound very much like you are heavily invested?..... in one of the property developers still walking......
I see the Duval investors are suing the FMA for actions..... Wonder if it will help focus the mind of the FMA??
Some Du Val shareholders take legal action against the FMA (nbr.co.nz)
There are some very good property development companies in NZ, and some very poor ones.
Du Val was always a very poor one and it wasnt hard to see that, and was always going to be a failure.
If you looked into the business model of Williams Corporation and the systems they have in place, you would find that they are running a financially sound business.
Du Val shareholders suing the FMA is just a joke, if they had any nous, they would not have put a single dollar with Du Val!
Hello Williams Corp and/or Wolfbrook affiliated person/10% return on investement bag holder
Claims by a CEO that there is sufficient liquidity.
https://youtu.be/tiUv6s2ad9U?t=198
Then the company didn't have sufficient liquidity.
Good point. People can throw out all the justifications as to why a vendor might accept less, but once those reasons are gone from living memory it becomes a datum in a range of sales. Enough vendors accepting less, and it influences the market trend.
"It needed work and the vendor wanted a quick sale" could be "was on the market for 6 weeks and the vendor couldn't wait any longer" or "the vendor was made redundant and cannot afford the mortgage". Each scenario might be different but that doesn't necessarily make it an outlier.
The resident Griifting spruikers here, live in lala land and much prefer fingers in ears......and denying a realty of 2017/2018 prices occurring left right and centre!!
They are just soo Nz housing Ponzi deep, denying the realty is their only copium.
And a reminder of an opinion from a few weeks back:
"According to the Real Estate Institute, prices remain 15.9 percent below their 2021 peak.
Average house prices were 6.7 times household income, compared to a long-term average of 4.5. Debt servicing costs would take 43.4% of average household income...To get back to that long-term average of 34.4%, allowing for a fall in interest rates to 5.9 percent, house prices would need to fall another 16 percent.....However a further 16% decline in house prices wouldn't make housing cheap, it would just make it more like average affordability. Returning house-price-to-income ratios to be in line with their long-term averages would require drops of between 32% [on the household income measure] and 38% [on personal incomes]"
https://www.rnz.co.nz/news/business/521022/house-prices-need-to-fall-a-…
Sometimes crashes over shoot , -32% from here, in all likely hood it could overshoot if things get that bad, would require high unemployment and massive farm foreclosures. Globally co-ordinated stimulus may help but who knows.
I am not predicting that but aware of tail risk.
allowing for a fall in interest rates to 5.9 percent,
Rates are still restrictive IMHO at 5.9%, I would see 4.5% 1 year fix to be neutral is a decent recession, if things do not crash then its higher perhaps 5.5%.
Market is very slow, this from latest REINZ 4 days ago. A few more people now then 2000 as well. Auckland has not been this hard for 24 years in spring.
https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/REINZ…
Median Days to Sell
- Otago had its highest median Days to Sell since June 2023.
- Wellington had its highest median Days to Sell since July 2023.
- Tasman had its highest median Days to Sell since October 2023.
- In terms of the month of September, September 2024 had the highest median Days to Sell in
o Auckland since 2000
o Canterbury, New Zealand, NZ Excluding Auckland and Tasman since 2008
o Otago since 2010
o Waikato since 2011
o Gisborne since 2013
o Southland since 2014- In terms of the month of September, September 2024 had the lowest median Days to Sell in
o West Cost since 2007
Having attended numerous open homes recently we are being inundated by real estate agents telling us of a mega auction at the end of the month.
it seems buyers are mass rushing to get money that exists.
is this mega auction fabricated or real?
We've had many agents call us, sometimes multiple times, after open homes.
They definitely weren't calling us back in 2021.
Also some cold calls from open homes back in 2023.
Things are not heating up and all the stats are showing it.
REINZ mixes propaganda with facts, facts and stats and then this
“Local salespeople around the country have noted an increase in buyers attending open homes, more so than the usual spring lift we see each year. With some regions now seeing an uplift in sales (7 out of 16 regions), buyer engagement is improving, with listings receiving more enquiries. These trends could lead to a more robust market in the coming months, particularly if expected improvements in market activity and reductions in interest rates eventuate,” added Baird.
Just the usual, garden variety, load of lies, diversion and manipulating hollow words from the REINZ weasels: Bollocks and Propaganda.
Don't get sucked in NZ. Only offer the 2017/2018 values and older!
Well if so many people at open homes the sales people have a crap closing rate.
Going to be a dismal start to 2025 if Oct and Nov are low sales rates and soft prices... no joy will be had after the xmas bill is paid.
"it seems buyers are mass rushing to get money that exists. "
Are the buyers developers looking for land to landbank? And speculators / buying syndicates who are landbanking?
He added that developers were making a return to the suburb, spotting that land values had come down from their peak. Some of them had come from pricier Westmere and Herne Bay and saw the opportunity of doing high-spec homes in Point Chevalier.
“We are now getting inundated with calls from developers desperately looking for land.”
https://www.oneroof.co.nz/news/point-chev-do-up-bungalow-sells-sight-un…
SALES ARE LOW
DAYS TO SELL HIGH
OPEN HOMES PACKED
I smell BS
Possible they have so little money, in the weekends they attend open homes for free entertainment.
I haven’t been to an open home in years, I’m not in the market…but, I have no scepticism in believing that open homes are getting far busier, & unless you have been to a few this weekend, & they’ve been empty then I’d smell BS regarding your comment.
Sentiment is definitely changing & it’s fair to think there are folks who will be active in attending open homes on the belief that they’ll have a chalkboard rate with a 4 in front of it in 6-12 months time.
However, I agree sales will stay low & days to sell will stay high until sentiment turns to activity, maybe that’ll start in 6-12 months. It won’t be enough to see prices jump substantially, but the 🔄 is going to continue & its in motion now thanks to an incompetent RBNZ & a govt with blinders on 🤦🏻♂️
I've seen RW Mega Auction headlines online, if it is them it may be just a marketing ploy. There was one in South Auckland on 2 October and that's not the first one they've done.
"I've seen RW Mega Auction headlines online, if it is them it may be just a marketing ploy. There was one in South Auckland on 2 October and that's not the first one they've done"
Yes. Tom Rawson's Ray White real estate agent franchise office in Manukau.
https://www.raywhite.com/tom-rawson/real-estate-agent/tr14310715/
Its literally to get one packed room that they can plaster all over the newspapers to say "FOMO IS BACK!!" when there is nothing there.
A year from now, 20% UP!
what listings?
Watch out for the DGMs, John.
They are like Donald Trump.
They have the mantra of deny, deny, attack, attack, and always claim victory (or in the case of their views on property, always being right)
The arguments are solid.
Look, here's a listing I found, 2015 build, 2019 CV $1.1 million, had a murder suicide in the house in 2022 and half of it burned down, plus they found historic arsenic contamination in the soil, sold last week for $500k.
Markets heading to zero, I tells ya
One of the worst bits of economic analysis I have ever read ...
How long do I need to own my property to make money?
Can you figure out why?
Opes partners are spruiking know-nothings so this sort of article does not suprise me at all.
I thought "sounds like opes partners' BS headlines".
Bingo!
FYI, the author stated in July 2021 that he doesn’t believe in housing bubbles personally.
If you are having to hold property for 10 years to make a decent profit, I would be suggesting that you are not buying the right property?
"If you are having to hold property for 10 years to make a decent profit, I would be suggesting that you are not buying the right property?"
That would apply to profit motivated buyers.
Most people in NZ:
1) are not involved in the property industry
2) are owner occupier buyers focused on acquiring a residential dwelling that primarily meets their accommodation criteria that also meets their financial and affordability constraints. Accommodation criteria are their primary focus (e.g proximity to good schools, proximity to work, safe neighbourhood, etc)
3) investment returns and profits for most owner occupier buyers are a non consideration.
As you are involved in the property industry, you are applying an investment and profit oriented lens that simply is irrelevant for most owner occupier buyers.
The "right" property for an owner occupier buyer is very different from the "right" property for a profit oriented property buyer.
An owner occupier buyer is much less likely to be interested in a mortgagee sale. That same property might be right for a profit motivated non owner occupier buyer.
People should understand where the commenter's comments are coming from for correct context.
OPES is normally dealing with investors and normally new apartments or townhouses.
There is still good money to be made in property in certain markets and areas!
Unfortunately there are too many that make comments and are not that beneficial to people that want to make good financial decisions.h
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