The Auckland apartment market has ended the year on a relatively quiet note at the last major apartment auctions of 2016.
At City Sales' auction four apartments were offered and two were sold, with the other two passed in, and at Barfoot & Thompson's auction five apartments went under the hammer but all were passed in and three of them didn't receive any bids.
At Ray White City Apartments' auction later in the day, three apartments were offered and two sold under the hammer, which brought a smile from auctioneer Ted Ingram who said the first apartment he auctioned this year was sold under the hammer and so was the last, which meant he started and finished what had been a busy year, on a high note.
That gave an overall clearance rate of 33% at this week's apartment auctions, broadly in line with what is being achieved at the general residential auctions in Auckland lately.
People of Chinese ethnicity were notable by their absence at this week's apartment auctions, with very few in attendance. This is a major turnaround from a few months ago when they would have been a substantial majority at most of the auctions.
It was also significant that most of the apartments offered this week were the larger apartments that often appeal to owner-occupiers, rather than the smaller apartments that tend to be the preserve of investors.
However buyers remain cautious overall, and one potential buyer at this week's auctions noted how bidding patterns had changed recently.
A few months ago the bidding would rapidly pass the reserve resulting in a quick sale, but over the last few months it had become the norm for the bidding to stall below the reserve, forcing the auctioneer to pause the proceedings and negotiate with the vendor to reduce their reserve to achieve a sale, he said.
The full results of the three apartment auctions we covered this week, with the prices achieved on individual properties, are available on our Auctions/Sales Results page.
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34 Comments
Racist, xenophobic observations are coming out from under the blanket of complete silence expected by the 'free media'....
Watch your Language.
They are called Buyers....not Chinese....Investments, not Houses, App-artment, is some of it is true, check your computer......Denial, is miss-informed, lie, is a National past time and Manipulation, is sexist.
We are all in this together. HetroHomoManFemipulation...if you please.
I think I am getting the gist of the New Regime.
And if you cannot believe your eyes, you are not up with the play, times change.
Here an interesting relevant article hot of the press from the BBC that helps to clarify why the Chinese Buyers are missing - they can't get credit, why can't they get credit I hear you ask?
Well China is in very significant debt to the tune of " China's outstanding debt stands at 250% of GDP - two and a half times the size of its annual economic output - a level that is worrying some".
Research notes from various international banks suggest 2017 could be the year China's debt-fuelled boom turns to bust.
BBC Article: China's spiralling property prices
http://www.bbc.com/news/business-38290708
Interesting article. Bloomberg have run similar articles in the past - some with similar ominous tones, others less so. Those that are less ominous point out that many home buyers do not have large mortgages and pay in cash ( is this borrowed cash - who knows - that is the problem with a shadow banking system) and that much of the debt is owed by government owned company's - so there is a strong element of control over what goes on , i.e. not the normal Western bad debt situation. I think while the Chinese government will be able to control this zombie corporate debt to a degree - I think eventually even the Chinese government will loose the ability to control that debt, if it gets to large. When that happens - the brown stuff will hit the fan.
I'd wait until it bottoms out. Could be a few months yet as there will be investors that will be keen to dump their properties when the recognize that there isn't any capital gains to be made for quite a while. I'd give it at least six months before looking to buy property in Auckland anyway.
Rod Duke thought Pumpkin Patch was a good buy too, at $1.65, when the prices had come down......
What property doesn't sell now ( read above!) will meet the additional supply that tip-toes onto the market next Autumn...and if that logjam doesn't clear by Easter.....remember what happened in Ireland at Easter (was it?) 2008.....
Those of an ethnicity-that-can't-be-named are canny buyers, very aware of the best places to park their $$$. And of course the unusual & unbalanced tax system is this country has strongly favoured putting their money into property, and reaping the tax benefits.
I wonder whether they realise that the winds are changing, eg through The Opportunities Party's tax policy, & the inevitability of change in the tax regime - and therefore bailing early.
Lets call a spade a spade , Aprtment sales in Auckland have for years been an all Asian affair , its just that the buyers have dried up
Its due to :-
Changed immigration rules by NZ which is slowing the rate down from next year
A requirement the buyers have to have NZ IRD numbers ( they dont like this one bit )
Bigger deposits required
Tightening if exchange controls in China
And the fact that Indian student migration agents were caught cheating means there are fewer applicants
Lastly , the prices of these apartment properties have spiraled out of control , and even wealthy Chinese can see this for what it is , a bubble waiting to pop
I see Barfoot is sponsoring a "Year of the Rooster" celebration. Come on people! Its time to introduce a foreign buyers tax, as all the other OECD countries have done.
BC Canada just announced a $150K No Interest loan for 1st home buyers!
Of course this is to keep the wealthy developer contributors to politicians happy keeping the boom rolling NOT the hapless young couple who cannot afford anything but a dog house in Vancouver today
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