Residential property auctions in Auckland may be losing some of their lustre with the success rate at many of the major auctions falling well below 50%.
The table below shows how many homes were sold at several major auctions conducted by Barfoot & Thompson and Harcourts throughout the Auckland region in the last two weeks.
Of the 10 auctions surveyed, only three had success rates above 50% and four had success rates below 40%.
Barfoot & Thompson managing director Peter Thompson warned in the company's October sales report that fewer properties were being sold under the hammer and vendors needed to be more realistic when setting reserve prices if they wanted to achieve a sale.
"Clearance at auctions has definitely slowed, but a significant number of sales are being concluded in post auction negotiations," Thompson said in the report.
"For vendors looking to sell quickly, auction remains the preferred method.
"However buyers are no longer under the same pressure to meet vendor price expectations and the properties that are selling are those with realistic reserves," he said.
And the slow down in auction sales is not confined to houses in the suburbs, it is also occurring in the Auckland apartment market, which tends to be more driven by investors.
Two main agencies dominate Auckland's apartment auction scene, City Sales and Ray White City Apartments.
At Ray White City Apartments' last auction on November 5, nine apartments were auctioned and none sold under the hammer and at the City Sales auction on October 28 all four properties offered for sale were passed in.
That was a complete turnaround from just a few weeks earlier when success rates above 70% were the norm.
| Agency | Venue | Date | Number Sold |
Passed in, withdrawn or postponed |
| Barfoot & Thompson | Bruce Mason Centre North Shore |
October 22 | 8 (24%) | 26 (76%) |
| Barfoot & Thompson | Bruce Mason Centre North Shore |
November 5 | 13 (40%) | 20 (60%) |
| Harcourts Cooper & Co | North Shore | Week ending 1 November | 14 (38%) | 23 (62%) |
| Barfoot & Thompson | Manukau Sports Bowl | October 27 | 9 (28%) | 23 (72%) |
| Barfoot & Thompson | Campbell Tyson Centre Pukekohe | October 28 | 1 (50%) | 1 (50%) |
| Barfoot & Thompson | Bruce Mason Centre North Shore |
October 29 | 24 (60%) | 16 (40%) |
| Barfoot & Thompson | Pukekohe Raceway | October 29 | 9 (48%) | 10 (52%) |
| Barfoot & Thompson | Head Office Auction Room, Shortland St, CBD | October 30 | 10 (38%) | 16 (62%) |
| Barfoot & Thompson | Head Office Auction Room, Shortland St, CBD | October 28 | 41 (56%) | 33 (44%) |
| Barfoot & Thompson | Head Office Auction Room, Shortland St, CBD | October 29 | 7 (70%) | 3 (30%) |
26 Comments
This is the kind of data people need to work out whether they need to be active buyers currently. Based on what I have just read and if I was a potential buyer of anything other than trophy properties I would be sitting on my hands currently. With the kind of debt that currently props up Auckland residential homes this kind of data will probably make even more people put their houses on the market.
1. If you are sitting on a good paper profit and are thinking of selling you should do it quick.
2. If you have heavy debt on a property the servicing of which is affecting your lifestyle and keeping you awake you should sell quickly before the sellers outweigh the buyers even more so
Supply is only one factor driving price. Unfortunately most people needing the homes can't afford the artificially high prices - so are sharing homes with family etc. Take speculators and overseas investors out of the mix and maybe prices could level to something vaguely proportional to wages.
The housing problem has never been about supply. Build 10,000 houses with no restrictions and all of these will be bought by Chinese investors/speculators living here and overseas. There are enough houses for everyone, but investors and speculators have cornered the market pushing owner occupiers out.
John Key disagrees with you Buzby. Overseas investment was not a factor.
http://www.interest.co.nz/property/76611/pm-john-key-denies-non-residen…
I voted National last time but am starting to realise I can see when he is not telling the exact truth. His mouth is open.
you will like his comments on CNBC then, not even anywhere near the truth
House prices doubled under the previous government and they've gone up pretty similar numbers under us," Prime Minister John Key told CNBC, speaking specifically about Auckland, the country's most populous city.
"The population's growing reasonably rapidly; there have been supply issues, so we're doing a lot of different things. We're building a lot of houses, so to give you an example, we've got the highest consent rates and building rates for a decade, but we're building three times as many houses as we did say seven years ago when I became PM.
http://www.cnbc.com/2015/10/29/this-city-is-worlds-riskiest-for-propert…
For houses to sell at auctions you need cashed up buyers . Those figures show there isn't as many as those around ie namely overseas money coming from china in particular and the tighter restrictions here. Its all hit the market at the same time. Those figures don't show the sales post auction and for those vendors that are more realistic, negotiation is the name of the game and the sale will be made. This is when the good agents show their true worth and show up the order takers agents that have jumped into the market over the last few years.
Now is also the time when a lot of buyers should be coming into the market, at the beginning on summer. If there aren't the overseas buyer now, then it somewhat contradicts what the government has claimed, that overseas buyers weren't the problem. With less demand, and more supply, heres hoping that prices drop quite a bit for NZ buyers who actually need a house, rather than people wanting to make a quick profit.
In Wellington, many houses don't sell at auction. But because people who were interested in the property have already done due diligence, it makes it easier for agents to negotiate afterwards with those interested parties. This is why agents prefer auctions, it makes far less work for the agents. Auctions though are not usually good for sellers, as the person buying are not always bidding up to their top offer. Whereas a tender, they usually will put in their top offer.
Sydney has had its worst weekend in three years, looks like property everywhere is starting to decline except the US
http://www.domain.com.au/news/waning-sydney-auction-market-hits-new-low…
Now that overseas investors have to supply IRD details etc tells me that the Chinese buying houses here have been using money obtained from illicit sources.
It has been basically money laundering. They want this money out of China ASAP.
I believe even Chinese living here are buying houses on behalf of people living in China to get around the regulations.
The Government has known about this for years and looked the other way.
What John Key is doing is too little too late. The damage has already been done and we will all suffer when the property market corrects big time.
Laundering.......The Government sure have known this for years and if the didn't they should have .Their attitude is if the money is coming in why stop it when we need it and it makes people feel rich . Of course that doesn't help the next generation ,but these Ministers won't be around. In some respects you can't blame the Chinese for getting money out of China (they don't trust their Communist Government) Why haven't our banks asked the question as to where the money has come from when the official limit is a $50,000pa. The Banks have been complicit in money laundering and there is no other way to describe it. China seems to be tighting up the exit of money over the last couple of months because it has seem $200 Billion leave in August (Bloomberg source)
Average prices in Auckland being 9 times average the wage is not good, but with the Chinese influence reducing I expect prices to fall.
Perception is everything and if people start saying price's are to high then they are, even if interest rates are low. Kiwis have been bidding against Chinese who have just been parking money and leaving 18000 homes vacant homes in Auckland, If that has stopped what's that going to do to prices
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