January is usually a busy month for real estate agencies as vendors start listing their properties for sale and agents start preparing the marketing plans and getting them underway. They do so with the aim of selling the properties over February and March, usually the busiest months of the year for residential real estate.
The auction rooms by contrast, remain relatively quiet in January. That's usually because the extended Christmas/New Year break reduces the pool of prospective buyers and the timeframes for marketing campaigns are usually condensed.
However, the last couple of weeks in January also provide an opportunity to present a property while there is little new stock on the market to compete for potential buyers' attention.
Over the last week (18-24 January), interest.co.nz monitored to the auctions of 37 residential properties, mostly in Auckland with a few scattered around the rest of the country.
That's just a drop in the bucket compared to the 500 or so that were being auctioned every week just before the Christmas break.
But going ahead with an early auction seems to have worked well for many vendors who took the early plunge, with 17 of the auctioned properties selling under the hammer, giving an overall sales rate of 46%.
That compares very well with the sales rates at the end of last year, which ranged between 35% and 41% in the weeks leading up to Christmas.
However, the latest results also suggest buyers remain extremely cautious on price.
Of the 17 properties that sold, only one achieved a price above its rating valuation, one sold for the same amount as its rating valuation, 12 sold for less than their rating valuation, and we were unable to match selling prices with rating valuations on the remaining three properties.
But let's not read too much into these early results.
The numbers are so small they provide just a peek of what the market might hold for us this year.
We will probably have to wait at least another two-to-three weeks before we get a good look at how things are shaping up.
42 Comments
"The one area I think we could have pushed through harder, but is now happening, is around housing. Because housing affordability is such a significant driver of misallocation of capital [and] poverty for lower-income households.
“It’s like a juggernaut that needs to be turned around. And we got started on that. But perhaps we could have pushed harder. Sometimes these things are a matter of public acceptance. I mean, the current Government’s making decisions in that area which would have caused a riot as recently as 2017.”
Bill English. Very interesting comment.
In other words ‘our government was about people pleasing (even though the people had lost their minds) instead of doing what was needed and what would have been the right things to do at the time - even if those things would have been unpopular’
English and JK were not leaders but populists. (So was Adern and I’m not sure what to even think of Luxon at this stage)
Ardern was moderately populist on housing, she implemented fairly controversial policies that the coalition have since rolled back to satisfy the landlord/property donors. I don't think you can call her a populist on other issues. Many of the decisions she made to try to address structural issues were deeply unpopular and she got punished at the elections for them.
Luxon is straight up grifter, failed upwards.
If you need to buy, you need to be going in at least 40% below current cv. Don’t pay any more than that. It’s a grossly over valued asset in relationship to historic norms and average nz salaries.
Plus, there is now an over supply with very few buyers (all gone to oz).
Thats about right, -40% off the 2020 to 2022 CVs.
Choose the lower of that, or the 2015 valuation/sales data for this period.
Or walk, thousands of listings and vendors under serious and increasing pressure to liquidate in 2025.
- The next 2 years of Vendor capitulation will be written about by poets in the future, as DTIs revert to 4 to 5x.
Its a wonderful thing and all in NZ can rejoice ...... except maybe those ole Debt and Leverage junky monkeys.
Those overleveraged will learn the same old lessons that have been seen for hundreds of years, yet many dismissed these lessons.
Yet still today, some have never heard of the Dutch Tulip bubble of 400 years ago. NZ Housing is still the modern day Tulip - earnings and value detached from any sane reality....this is why the price is midway into the crash that is now over 3 years old.....
https://www.youtube.com/watch?v=FBG47EGsV3o
Buyers beware!
Thats about right, -40% off the 2020 to 2022 CVs
Wasn't it 40% off 2015-2018 CVs a few weeks ago?
Hard to keep up with you hard bargainers.
Edit:oh, you edited
earnings and value detached from any sane reality....
If I gave you a section for free.
You wouldn't build a house on it and come in 40% cheaper than a similar existing house, next door.
What if you told the vendor you'd hold your breath until they accepted?
Someone I know recently made two offers 5-10% under asking. They never even got counters.
Our market doesn't have anywhere near enough distressed sellers, and doesn't look to anytime soon. Despite claims for years now that they're all over leveraged and about to soil themselves and drop their pants at a moment's notice.
@NZ Gecko
"Vendors under serious and increasing pressure to liquidate in 2025."
You are now making things up Gecko. Can you give us any evidence for your statement?
Commenters were talking about 2024 being the year of serious pressure for liquidation, yet it didn't happen.
Interest rates have dropped from 7.29% to 5.29%, taking away any of 2024s pressure. In short, the big sell off didn't happen, and it doesn't look like happening.
Indeed, if you look at the data
https://www.rbnz.govt.nz/-/media/project/sites/rbnz/files/statistics/se…
The number of home loans 90+ overdue is roughly 4x what it was ($terms), or 2.5x in % of housing lending in late 2019, before covid, the fomo bubble and Interest rates being slashed. And it looks to have levelled off in the last 6 months, and with lower rates feeding thru there's little reason for it to turn back up anytime soon. It's still under 0.5% of housing loans being 90+ overdue. Not the end of the world.
Wang told OneRoof he and his wife had been investing in Bitcoin for about six years and after crunching the numbers had decided the cryptocurrency was a better investment than property
Well blow me down with a feather...careful however it's not a store of value apparently 🥱
Houses are selling at low prices.
The issue is the sites like Homes etc... don't reflect the massive crash as they are manipulated by real estate industry. So council's are concerned that when they put the true valuations they will get a massive load of appeals as people want their house to be valued more than it is worth. Of course they will also be pushing to have everyone else's property 'up-valued' because otherwise they pay higher rates proportionally speaking.
When I see a property sell at auction below CV, homes.co.nz puts it as TBC. Those TBCs sit on the map for a couple months before disappearing. But if it sells above CV, homes.co.nz shows the price and leaves it as a red dot on the map for a couple of years, even though it’s not a recent sale. So, it’s kind of skewed to the upside.
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