The auction rooms are back up to speed again after the summer break, but Auckland sales rates remain at the lower levels evident in the latter part of 2016.
Auckland’s largest real estate agency Barfoot & Thompson marketed 129 properties for auction last week (to February 10). It sold 49 of them either under the hammer or by 5pm the following day, giving a clearance rate of 40%.
That is well below the success rates that were evident in the first half of last year and suggests sales could remain sluggish during this year’s peak summer selling season.
The biggest auctions were on the North Shore where 16 of the 34 properties were sold, giving a clearance rate of 47%, and at Manukau where seven of the 23 properties were sold, giving a clearance rate of 30%.
Results at the company’s head office auction room in the CBD were mixed (see chart below).
The prices achieved for individual properties that were sold and the details of those that didn’t sell are available on our Auction/Sales Results page.
| Venue | Sold* | Not Sold* | Total |
| On Site | 9 | 10 | 19 |
| Manukau: 7 Feb | 7 | 16 | 23 |
| Shortland St: 7 Feb | 4 | 6 | 10 |
| Shortland St: 8 Feb | 1 | 5 | 6 |
| Whangarei: 8 Feb | 2 | 1 | 3 |
| Shortland St: 8 Feb | 5 | 6 | 11 |
| Takapuna: 9 Feb | 16 | 18 | 34 |
| Shortland St: 9 Feb | 4 | 7 | 11 |
| Shortland St: 10 Feb | 1 | 5 | 6 |
| Total All Venues | 49 | 74 | 123 |
| *Sold means sold under the hammer or by 5pm the following day. Not sold includes properties that remained unsold by 5pm the day after the auction and properties that were marketed for sale by auction but withdrawn from sale or postponed before the auction commenced. | |||
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103 Comments
Actually what it does prove, is that the Overseas Investors are gone! Locked out by their own Government by the Capital Flight restrictions. Without these top end buyers there's no real purchase pressure on the housing market which is why the auction market is so subdued. And were now in a "Buyers market".
Thing is we have no idea when the Trump Effect will lift on the China? Could be a few months it could be a few years? Who knows??
Message to FTB's: Take it easy and put in low ball cheeky offers!
Indeed, all overseas buyers have gone. The Chinese Government is chasing those took money out of Country. Those people is quite after 1 January 2017.
Another reason, some property speculators brought ??% of auciton proeprties last year, now they are under NZ government scrutiny. Too bad! those specuator made Auckland proeprty are unaffordable.
As previously said...
"UNDER THE HAMMER" sales are BELOW 30%
Up to 5pm the Following day, is 40%
So Figures are still PRETTY BAD
Prices will KEEP DROPPING... while LISTINGS will keep increasing.
(Personally) I expect Prices to fall back to Mid 2015... so about 20%
Good luck everyone who purchases a property TODAY.
Does the current run up in prices represent a long time?
Its true that prices could continue to increase for a number of years into the future, just as they could stay flat for the next 5 years or fall by 20%. At this stage anything "could" happen.
Its a gamble and with any gamble you should act within your comfort zone.
if its a business decision (investing is a business) then you weigh up all the factors and make an educated guess and if possible mitigate your risks.
based on the current evidence prices will either remain about the current levels or fall. no sign to say they will continue to increase.
It is just a matter of the time period to get your "guarantee". It may be up to your children or grandchildren to realize a profit on a purchase done at the wrong time.
In Japan the prices are still in the same range as they were in the early '80s, and far lower than they were at their peak around 20 years ago. The home that I sold in the US in 2006 is still worth less now than what it sold for. It is about timing, as there can be significant periods of no appreciation, or even significant depreciation. Factoring in the cost of money and inflation, sometimes housing is a horrible investment. That said, after renting for 10 years, I bought last year when it finally penciled out to be financially prudent to own rather than rent (it is all about location, and Hawkes Bay has been rather flat in price for a decade until the last year).
Yankiwi ...a Kiwi here with residential investment property in the good ol' US of A.
So good to see you bought in Hawkes Bay ......I'm in Auckland and sold out of it March 2016....the prices here are just crazy ! there is no value for money, with expensive materials and in many cases, crap building standards ie the leaky homes debacle ! and is the land really worth "that much" ?!
The cost of materials and labour are way down in the States (Maryland) as we are ripped off here in NZ by the small cartel of the building supply co's etc.
I think so many people in Auckland have been "brainwashed" especially by the media and "BBQ chats with friends and rellies" into thinking "that's how much my property is worth" ....and I am not going to accept a penny less ! ......all I can say to those people is "Best of Luck" ....
Ps ....reason I sold in Auckland is that the higher it goes, the harder it will fall.... and a crap return on your capital...... 2.78% Gross... what a joke !!
Yeah not great and where I live on the North Shore of AKL they sold 16 properties - but in that same period listings went up by 150 !!!
And its going up by 30-40 a day..
But would like to see the comparison to the same period from 2016 as I thought Feb was the boom month?
From friends who sell RE on the North Shore its a 2 paced market,
Still good activity at top end of market ($1.5M+) that will skew average sell price but the specvestor market dead in the water.
I'd be concerned if I'd leveraged up against the family home to "invest" in the "you cant lose" BS sold to those who bought some of the absolute crap that sold for 40-50% over GV in Birkdale / Bayview / Glenfield etc...
Rising stock creates a glut of supply and you end up in a simple supply / demand dynamic - it is a lead indicator of a price expectation gap forming.... i.e. sellers are still holding out for past prices but buyers are unwilling to pay those prices.
If stock continues to increase then this battle of wills will be won by buyers - sellers will meet buyers at a lower price. So in short, you're wrong, increasing stock will result in a drop in "value".
This is economics 101 mate.
And as an aside, I am still shocked at your comment yesterday that the past is a predictor of the future. I'd suggest picking up a book or two on how markets operate before acting like an authority on these matters.
Of course the past affects the future, but the extrapolation is rarely linear. 'Prices have risen therefore they will rise' is far too simplistic. Have you considered that the enormous rises in Auckland prices recently might actually make the market more prone to a significant correction than it would be if prices were more reasonable compared to earnings?
Yes and heaps more new listings today on Trademe, Investors are really ditching stock. Though that makes sense if you think about it; if people know that they won't be able to renew their overseas sourced mortgage, then they know their going to be in a pickle if they don't sell soon.
My colleague has put his DGZ property in the market hoping for between $2.5m and $3m. What do you think? Is he realistic in this market? He bought it in 2009 for around $1m.
http://www.trademe.co.nz/property/residential-property-for-sale/auction…
I'm saying that 2.5 million dollars is ridiculous for a 1920's villa, albeit refurbished. That price is beyond the reach of even the most well heeled double income no kids Kiwi doctors or engineers. Even if they had support from parents and some existing capital, that price tag is still out of reach.
Lets be honest, we’re not talking about a mansion. This is a stock standard Mount Eden villa. It’s the kind of house that should be within reach of high income talented hard working 30-40 year old DINK New Zealanders.
This is just draining New Zealand of talent. There’s really no point living in Auckland. I was speaking to my former neighbor in Kohimarama. He was training to be an engineer and was quite open about wanting to leave New Zealand and the reason was housing.
I get it though, your friend purchased at the kiwi price and now he's trying to sell at the Chinese capital flight price. I get it. I'd probably do the same, wouldn't everyone.
Quite right fat pat. We've come back to NZ from NYC, early 40s, high earner over there but looking to bring the kids up back here. I wish we'd thought more carefully about the financial cost of moving back....50% pay cut and $2.5m for a decent house??!! Its too much of a price to pay. We're likely to bail to Singapore in the next 12 months. Leaving grandparents grandchild-less. Such a shame
No we're saying that you have to be more realistic. He does have the option of 'riding it out' but the problem is wages are not heading up all that quickly. And to be realistic I think it's going to bottom out at 2012 price level and then stay there for a while until our vital industries recover, perhaps then wages will increase to provide more buying power for local kiwi's and immigrants.
Time to hit reality with a bump! Trouble is Double-GZ I think we're in this for the long hall I did try to warn you.
looking at the link, Nice house lots of character, but quite small, CV/RV of 1.5m in 2014, Trade me estimate 1.7m to 2.4m.
But lets be realistic, anything over 1.9m and he would be winning big time (based on jan 2009 to Jan 2016 price inflation ) achieving higher than the overall Auckland growth rate. they may have spent a fortune on renovations of course, but there is no guarantee that the renovation investment will achieve the same growth as the house and land itself.
So 1.9m should be his target price
if someone is buying to live in then 1.5m might be achievable, its a small house. for 2m you want to at least feel like you are buying a millionaire life style.
Can you guys guess how much this 1920's DGZ villa went for just before X'mas in Dec 2016? Hint: It was sold within 10 days after being put in the market ;-)
https://www.bayleys.co.nz/Listing/Auckland/Auckland/Remuera/4106650
Su30 please guess how much this one went for in December 2016.
https://www.bayleys.co.nz/Listing/Auckland/Auckland/Remuera/1670611
Wiseguy -True, however basic supply and demand forces do come into play. The more "urgent" and "must sell" listings that start to pile up will have an impact.
Bank tightening continues, Election year, everyone waits to see who gets in so a lot of decision making goes on hold. Tax changes and limits on overseas money/ owners, and slowing of immigration are getting focus. Add in a few job losses (que Warehouse) all adds up to reduced consumption and significant downside risks to those riding high on ponzi leverage. Locals are limited by their earning power in little old NZ and are all waiting for some sense of normality to occur, 4-6x earnings multiplier.
Lets face it has been a 2 stage market for a while, Chinese money going mad with specuvestors clinging to their coat tails leveraged up on cheap debt. Take away both booster rockets, who are the over leveraged gonna sell to....?
Everyone who doesn't have a personal stake in denying that Chinese demand has been a MASSIVE factor knows this is key.
But National will swear till they're blue in the face that foreign demand is not a factor...and it's probably "too hard to measure", like everything else inconvenient to their "data-driven government".
Well fixed rates have crept up about half a percent in the last six months but incomes have largely been stagnent. The market needs to adjust one way or another and, after recent years, most people would likely accept that some adjustment is needed. As long as the exits don't get too crowded prices should glide downwards.
Common sense - people won't sell for less than what they buy it for. They would rather hold unless they are unable to pay the mortgage/s. Supply and demand is there, however, demand is stronger for properties in the urban areas, e.g. Franklin is increasing in value. Pervious hot spots such as North Shore are decreasing (over competitive selling market) similar to what's occurring in Vancouver at the moment. Bubble won't pop unless interest rates are high and forcing people to sell their properties. As long as high LVR restrictions are in place average house prices will continue to decrease. Seems like a downward trend in the coming months unless investors jump back into the game. Sooner or later they will be back. In theory, house prices will always go up in long-time. If we look at gravity, apple will always fall down when we let it go. Nothing is going to change unless the actual laws of reality does, I hope this made sense :)
What's the bet that just like Vancouver we have our share of mansions filled with foreign buyers declaring poverty-level local incomes, while the father is back overseas running a business. Free schooling, free medical care etc. - and minimal tax contribution to New Zealand.
The problem with being naive is that other people easily exploit you.
Yes it's every where in the more popular cities, time to include an empty home tax too! Obviously there would be exemptions for those properties that are being renovated or a bereavement etc.. But it would have to be within a reasonable time period.
So it is high time to take a stand and fix the housing market over night!
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=116…
If foreign buyers have had their wings clipped and if their wings stay clipped and they do not reappear in the market, prices will most definitely go down, led by them selling property they overpaid for, for whatever they can get for it. They have almost single handedly led the market up, they will lead it back down again.
There will be a "critical mass" situation, sooner or later, probably sooner, that will see prices plunge, confirming, to me anyway, that government intervention in the market should happened and would have prevented this ludicrous situation. Foreigners should not be buying ANY of our land other than maybe commercial, not farms, not houses.
lucky as the sheeple believe they only make up 3% of the buyers.
we have seen the effects of must get in then must get out first mentality for investing to make money
https://www.wsj.com/articles/china-market-plunge-has-investors-wonderin…
http://www.businessinsider.com/regulation-changes-in-china-could-crash-…
The housing market is all supply and demand. Anyone buying a house shouldn't be surprised if that price halves if the demand dries up, especially if they purchased the the top of the bubble. It actually doesn't matter if it does halve for many people, because they are living in it and not selling. If they do sell, they are likely buying and selling in the same market, so it shouldn't affect them much. It may however affect those who have used their house as a ATM, and the bank wants them to repay back some debt. But this seems to be more of an Auckland problems. Wellington house prices are still rocketing, probably because people are sick of of Aucklands house prices. But there is a bigger potential of EQs in Wellington which puts people off.
This is only if you had paid cash. If you involved a bank in your purchase, they will never allow the value of 'your' home to drop below your equity in it. Top up immediately to maintain your required equity of 'bang' it's on the market as a bank mortgagee sale. If it sells below the value of the mortgage you still have to top the bank up, it's all in the fine print!! Good luck in a falling market specuvestors.
It's going to be an interesting few months for Auckland residential property. The latest data suggests that the peak of the present cycle has been passed and the question has become "how low might prices dip?". Rising interest rates on the horizon are a concern, especially in the context of some exorbitant debt levels. Advice to sellers: either take your property off the market or be prepared to settle for a bit less money. Advice to buyers with cash: you could soon be at a marked advantage so bide your time a bit. Hopefully, a situation of sellers stampeding for the door will be avoided... but don't completely dismiss such a scenario.
that was always going to happen, once Auckland sneezes the rest of the country catches cold
http://www.stuff.co.nz/business/87475339/House-price-growth-slowing-dow…
http://www.nzherald.co.nz/hawkes-bay-today/news/article.cfm?c_id=150346…
We are in the market looking for another dwelling but what puts us off is the "for auction" tag. We want to look at houses in our price range but the real estate agents wont put a figure on what the properties are worth. We wont look at a property unless we know the purchase price, so a bit of a stand off. Been down the auction route (selling and buying) and wont waste my time again.
Auctions I would imagine are great where there are lots of vendors and even more bidders. However with falling numbers of bidders maybe the time is right to go back to putting prices on properties. We are looking at spending K$800, but not on properties being auctioned..
Good news is no overseas buyers are out to shop for Auckland Property. As Their Government is chasing those who took capital. It is illegal to move money out of China.
Another reason are some speculator is now under NZ Government scrutiny, so those are forced to put propery on market.
I wonder if Mike Hosking will admit that he was spectacularly wrong with his position that NZ property was not in a bubble when the crash"/slowdown comes? I can only suggest that Mr Hosking has an interest in talking up the market as once again he is showing that he "doth protest too much." He argues that this has all happened before and yes it has however affordability was addressed then as witnessed by massive wage rises to meet the inflation rates. That is not likely to happen again. The crunch point will be soon as someone stated the other day on here when we see OCR go up, leveraged folks will have to find massive amounts of income to afford to stay in their property. I think the example was $200 per week in a 2.0% increase in interest rates on 500k mortgage. I think the signal for me warning about this ponzi scheme was a year ago or more when I heard about investment clubs operating. I am sure that Hosking and his ilk can likely afford $200 or $2000 a week increases but for the rest of us it is over. Thanks for trying to destroy my familes chance of home ownership Mike but the worm is now turning. Hoskings rant: http://www.newstalkzb.co.nz/on-air/mike-hosking-breakfast/video/mikes-m…
You may have viewed this before but I think the 4min 30sec mark onward could well describe NZ right now. And the guy was spot on.
https://www.youtube.com/watch?v=Gd6ZwqLePC0
Interesting how the the one economist didn't think there was a problem because there was a lot of immigration and young people to buy the expensive houses - but in the end, they all just decided to leave the country.
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