Harcourts auctioneers have started getting busier as the market heads into February with the country's largest real estate agency auctioning 65 residential properties in the week to February 5, with sales being achieved on 36 of them, giving a clearance rate of 55%.
The auction rooms were particularly busy on Auckland's North Shore where prices ranged from $700,000 for a two bedroom house in Glenfield (pictured) to $1.85 million for a house on a large section in semi-rural Okura.
There was also a sprinkling of auctions in other parts of Auckland with a house at Hillpark in Manukau selling for $792,000 and a house in Epsom selling for $1.427 million.
In other parts of the country Harcourts held auctions in Taupo, Christchurch, Blenheim and Invercargill last week, with results varying widely between properties and locations.
The latest results from Harcourts' auctions with the prices achieved on individual properties that were sold and details of those that were not, are available on our Auctions/Sales Results page.
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102 Comments
I never said you shouldn't invest, but it pays to be aware of the risks before sticking your money in. I have some extremely risky investments, but none large enough to hurt me if they tanked. Leveraging into a single housing market without diversifying geographically and into other assets is much riskier.
Please tell me what it is that causes house prices as an asset class to continue to appreciate other than irrational exuberance? Consider that migration and limited supply should already be factored in to pricing. I would rather base investment decisions on current yield, and future yield potential than past price changes. If you are right that asset prices always rise, why not purchase an asset actually backed by fundamentals and not housing which is disconnected from yields and affordability (at least in auckland)
You do understand the traditional trade-off between risk and return, right? Yes, property tends to be one of the safer asset classes, because the returns tend to be lower. Regardless, diversification is a no-brainer and it'd be short sighted to only invest in a single class.
It's been on a pretty good run, sure, but an investor buying today gains nothing from that. The next step is for you to prove a link between past and future returns. The alternative interpretation of your data is that the price has got extremely high over the past 5 years, which could lead to poor returns in the future.
Yes, prices have gone very high, and it wasn't long ago, about a year when I heard the same thing 'how much higher can it go' if you look at the figures year to year you will see the difference, population in 5 years need a roof over their head, new housing will not cover this rapid population growth
Yes, because everything is stacked in its favour, things like not being charged commercial interest rates by banks as any other business would be, negative gearing, no capital gains tax worth a sou, crappy tenancy laws to name a few. The sooner some of those anomalies are addressed, making such investment less attractive, the sooner the dreadful situation around housing can be righted.
I'm sorry, but what has happened over the last 30 years or so, concentrating itself in the last perhaps 10 or so, HAS prevented a whole strata of society from affording a house of their own, who, in the past would have quite realistically have bought. Now they cannot, no matter how much they try to save and now they are increasingly unable to keep up with rents. Earnings have stagnated while property prices have become ridiculous, you know that as well as I do. I know, I have been around for the lot of it, including the genesis of it all back in the 80s. It was a bit nasty then, it is completely gross now. It should never have been allowed to happen and now MUST be corrected and I mean must. This is not my country
Eh, New Zealand had riots, strikes and the like to fight for fair treatment of the downtrodden in the past. It resulted in previous governments taking steps such as introducing labour laws, introducing land taxes to break up land banks, and giving Kiwis a fair go at a reasonable job and the chance to own their own lot. Boomers ultimately benefited form the actions of previous governments...then elected politicians who changed all the rules and made it all about investment.
If the young get angry and educated enough about what's been done to them, perhaps they'll start to take action again. They need to realise that there are reasons of policy for why houses were once affordable, and there are reasons of policy for why they are not anymore.
The word mortgage is derived from a "Law French" term used by English lawyers in the Middle Ages meaning "death pledge"
https://en.wikipedia.org/wiki/Mortgage_loan
The reality is is that we have an asset class with a very high P/E ratio and history would suggest that it will normalise over time - either dramatically or in an orderly manner.
Investors (not speculators..) would be much better off looking at other options than the Auckland housing market.
we are not on the brink of a housing collapse ... we are on the brink of a financial collapse.
https://surplusenergyeconomics.wordpress.com/2017/01/09/85-perfect-stor…
add to that energy collapse
https://srsroccoreport.com/the-blood-bath-continues-in-the-u-s-major-oi…
Yeah I wouldn't get too excited about the auction results which are still fairly poor at just 55%.
Here's the reason why Capital Flight tightening up: China’s central bank is behind bitcoin’s falling price.
https://qz.com/881373/bitcoin-btc-price-crashed-because-of-notices-issu…
China’s foreign exchange regulator, SAFE, was looking at whether bitcoin was being used to avoid the country’s capital controls. Evasion of capital controls has long been cited as a major reason for bitcoin’s popularity on the mainland. The detail was first reported by Tencent Finance, citing an anonymous source close to the regulator.
How about the 90% Auction clearance rates that were happening mid 2016 before the Capital Flight restrictions became enforced.
The thing is your at the mercy of economic forces way beyond our control, selling out to the highest bidder isn't going to work out all that well in the long run for NZ. Cash in whilst you can RE's!
Good call RickStrauss. As a prospective first home buyer I've pretty much given up completely on owning my own home. 10 years of saving and living on the smell of an oily rag just to get a deposit, in which time the house prices increase by 50%+ and you're right back at square one. Couple that with wage stagnation, a constant rise in living costs and food, a low salary and no jobs and it's a fustercluck of problems. Chasing something forever out of your reach is not a nice feeling, and it ultimately leads to unhappiness.
Wake UP. do some basic math. the first home buys are getting locked out by economics of cost and debt payment. IF they stay in NZ to keep the economy moving forward we will be lucky.
if they can not get in they will need to start making other live decisions.
Buy airline shares so you benefit from all the overseas trips you will have to make to visit your kids and meet you grand kids.
when there is no next generation to buy your houses, what will you do?
Yes this is what really gets my goat too. I find it disgusting that there are no controls what so ever over unregulated sales practices that allow whole scale money laundering, as well as handing the land over to all comers which mostly seems to be foreign buyers (Without even gaining some tax revenue for NZ).
All at the expense of NZ Citizens and future generations who home ownership opportunities and quality have life have quite literally been sold down the river by greedy Estate Agents.
So are these 20 and 30 year old's on $100k salaries with $100k+ deposit affording those million dollar homes, I think NOT!
You know how I know? Because I work with a lot of them here in Auckland CBD and they're not on those types of salaries even in the IT industry, not even close! Most are living at home with their Parents or flatting, renting rooms that maxes out their wages.
The ones at home do have a fighting chance but their at home well in to their 30 and 40's. I was lucky I managed to buy a home before most of the property price craziness took off.
But there are lots of professional people that I know on good salaries that are having to rent. Their from all kinds of background, mostly immigrants or second gen immigrants. Who most certainly can not afford a home here.
This is also very damaging for recruitment for professional staff; since no one wants to move to a city that they can't afford to live in.
I love rubbing Estate Agents nose in it EVERY DAY so NO I WON'T STOP EVER!!!
And if it wasn't to do with Foreign Buyers then tell me why, the Auckland auction figures drop every time foreign buyers are put on hold. Example: The IRD requirements last year where property prices dropped -10% in Auckland and they were effectively locked out whilst they had to register for a few months.
Do you remember that one? No of course you don't RE's have very short memories as it helps them sleep a night, whilst they sell out on the next generation of Kiwi's.
Or how about just recently with the Trump effect and China having to enforce Capital Controls on out flowing money. Again the Auckland housing market took a dive! And it will happen again and I'll be here to remind you. :)
Please stop picking the Chinese just because they are easily identifiable. There are a lot of other foreigners from Australia, Europe (mainly UK & Ireland), America, Canada, South Africa etc who are active buyers / investors but most people just assume they are not foreigners based on their looks. So please stop singling out a single race/culture just because you can 'SEE' them. Start celebrating our multi-cultural society by popping into the Lantern Festival this weekend at the Auckland Domain to show you care about Auckland.
These are just facts Double-GZ, I'm not picking on anyone. Just pointing out how and where most of the Foreign Property Investment has been flowing from. It was only a few years ago that most of it flowed from other areas such as the UK, South Africa and the rest of Europe. I grant you that not all of NZ's Foreign Buyers are from China but in recent years there has been over whelming evidence given all the statistics and how the property market globally have fluctuated and the reasons as to why.
And how lots of other countries have pointed out the same flow in capital over inflating their property markets and they've had to take tax measures to even their markets.
Also and here's the proof. China has also recently 'pledged' that it will stop it's Investors for purchasing overseas property. Have you not been reading the news?
Can you provide me alternative facts - I'd love to hear them, please post the news links.
There's a big difference in Foreign Investor and immigrant buyer. Foreign Investors are Speculators who don't necessary live in their invested country. They generally invest purely for profit or as a retirement option, or even a temporary home for educating their young.
Most live in their own country as the main wage earner and let their family (Usually wife, kids and parents) live in the host country so they can benefit from a nicer climate, clean air and host support. These are know as 'Astronaut families'.
In Canada some of these Foreign Buyers have been a bit cheeky having bought property with liar loans which are now being seize by the Asia banks. Part of the reason why they've tightened up on Capital Flight and this is why NZ Estate Agents need to be regulated.
http://business.financialpost.com/personal-finance/mortgages-real-estat…
Immigrant Buyers are Immigrants who are looking to live, work, pay taxes and invest in NZ as a home and country long term to become Citizens of NZ.
I disagree. I think there are more local speculators than foreign speculators in the Auckland market. I know a lot of young workers/professionals in their 20's 30's and 40's who combine their finances to buy and flick houses within a short period of time, and they are not of Chinese descent. Also there are a lot of foreigners who actually live here, and they do their shopping here, paying GST and they may / may not intend to become citizens of NZ.
Prove it, show us the evidence! I've got ample evidence to counter act that statement. :)
Plus friends buying together doesn't really work. Pressures of society; companies going under because the dollar is too high due to over priced property, having to move to else where in the world to find work etc...
Oh did you know that the birth rate has dropped also due to anxiety of social pressures.
I reckon house prices are stabilising. There's enough demand to keep prices from falling.
NZ population - Increasing (Moderate)
Immigration - Increasing (Moderate - High)
Foriegn buyers - Restricted
NZ investors - Halted majority
Interest - Increasing (Slow)
Supply - Slow
My assumptions in the next couple of months:
Demand (Increase)
Listing (Increase)
Interest (Hold or increase slightly)
Prices will continue to level in the next couple of months and when variables change so does house prices.
I believe there is one major factor everyone seem to forget. This had a major effect in the UK, and is busy having a major effect in the US. Soon it will have a major effect in France and Germany. It's called POLITICAL WILL! Believe it or not, but its driven by people like you and me.
In NZ up to now the political will has been driven by the majority of voters being on the receiving end of the status quo. That majority is fast shifting to the voters that's been sidelined, similar to what happened in the UK and US (populism). I predict a shake-up of the status quo come election time, either by the current government changing, or a new one coming to power.
If there is another pandemic and we are certainly overdue for one in a vastly more interconnected world than the early 1900 hundreds. I wonder how such will effect housing costs. And of course there are other possible events that can change the value of housing overnight. For example, we are as subject to earthquake and tsunami risk as is Japan. Currently are earthquake events moving north from central New Zealand? Would a major upthrust under the Waitemata or Manukau harbours influence future desires to live in Auckland? Would such events trigger volcanism in the Auckland area? Indeed, what a stupid place to house such a high concentration of our peoples and industry.
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