Auckland's largest real estate agency, Barfoot & Thompson, marketed 172 residential properties for auction last week (to February 17) and sold 66 of them (38%) either under the hammer or by 5pm the following day.
That left 106 properties (62%) that remained unsold by 5pm the day after the auctions, although that included a very small number that were either withdrawn from sale or had their auction date postponed.
Most of those that were passed in were then marketed for sale by negotiation.
Properties in south Auckland remain the most difficult to sell. At the Pukekohe auction, nine properties were marketed for auction but only one was sold by 5pm the following day.
At Barfoot's North Shore auction 16 of the 40 properties (40%) were sold by 5pm the day after the auction.
See the chart below for the summary of results.
The prices achieved on individual properties that sold and details of those properties that didn't sell are available on our Auction/Sales Results page, along with the results of auctions conducted by Harcourts, Bayleys, Ray White City Apartments and City Sales.
Venue | Sold* | Not sold* | Total |
On site | 4 | 14 | 18 |
Manukau Sports Bowl | 5 | 13 | 18 |
Shortland St, CBD. 14 February | 6 | 5 | 11 |
Mortgagee | 1 | 0 | 1 |
Shortland St, CBD. 15 February | 14 | 15 | 29 |
Pukekohe. 15 February | 1 | 8 | 9 |
Shortland St, CBD. 16 February | 4 | 4 | 8 |
North Shore. 16 February | 16 | 24 | 40 |
Kerikeri. 16 February | 1 | 11 | 12 |
Shortland St, CBD. 16 February | 3 | 5 | 8 |
Shortland St, CBD. 17 February | 11 | 7 | 18 |
Total | 66 | 106 | 172 |
*Sold means sold under the hammer or by 5pm the following day. Not sold includes properties withdrawn from auction or postponed. | |||
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83 Comments
Don't worry - Ted's alive at the NBR via John Predegast, Paul Cranston and his other non de plumes...
RE guys are like cockroaches. After a nuclear war they'll be selling the left-overs... "look at the huge indoor - outdoor flow, and with a half life of only 10000 years - buy now!"
Don't know what the clearance rate was but look at the difference in sales.
https://www.barfoot.co.nz/market-reports/2016/february/residential-sale…
If you look at the January data there's about a 30% drop in sales year to year.
https://www.barfoot.co.nz/market-reports/2017/january/residential-sales…
come on guys, National government have to accept that they have been bullshitting the public that there is NO housing crisis and allowing SPECULATORS to run wild, exploiting young Kiwi's the chance to own their own home. Reality (Housing is severely unaffordable) has to come home to roost. Wonder if BE will concede now.
National government not accepting that their is a housing crisis - are correct as are only following National party principle of Denial, Lie and Manipulation
BUT
Election not far away and people of New Zealand should give a Befitting reply to National.
Times are changing.
Auckland's residential property market has always ranked as one of the most volatile in NZ. So, a correction at this point comes as no surprise. Numbers attending open homes are well down and there's much less urgency among buyers. Ten thousand Auckland properties listed on TradeMe is a bit ominous - but unless you have to sell now and bought within the last 6-8 months, you'll probably be fine. Unless interest rates rise significantly (and rapidly) and/or there's a surge in unemployment, property owners/investors probably won't stampede for the door. I prefer to avoid making predictions (especially those about the future!) but I don't dismiss the recent (independent) forecast that Auckland housing prices could weaken by around 10 per cent over the next 3-4 years. That's hardly a meltdown; it's more of a soft-landing. Nonetheless, it could be a good time to think about spreading the risk....... Inevitably, cash will return to being king. (It always does.)
Check out this Double Shot video on Interest.co website in April 2016 some 10 months aho.
You can't say you havent been warned:
http://www.interest.co.nz/property/81268/warning-bells-are-well-and-tru…
The panic is on.
Sold for 901k in July 2016 https://www.trademe.co.nz/property/insights/address/Auckland/Glen-Eden/…
Sold on 17th Feb 2017 for 865k http://www.interest.co.nz/property/auction-results?region=-&district=-&…
that's about 5% drop in 6 months not including the Auction fees.
Dear Wildcard, thats because the sentiment in the market has changed
Watch as more than just sentiment changes but reality finally sets in.
Anyone who is in the property market for profit$ should have already $old
Like I told Zachary to sell his West harbour property at peak $ which he Failed to do
I've been looking at issues around financial literacy and risky decisions that people make. It's endlessly fascinating and people have learnt nothing from history. Many are in denial as to the terrible state of their finances, or have no way to understand the position that they're in. It's even more interesting when those making terrible decisions work in banking or are accountants.
What I'm interested in seeing is how many financial disasters are really going on in Auckland. The mortgagee sale of the house with the tacky statues and the 7 property(?) holding companies linked to the address is very interesting. That one appeared to have only been propped up by falling interest rates.
Dictator,
Nothing you have said surprises me. Not long ago,I went to Kiwibank to open a PIE TD. The lady I dealt with said that in all her time at the bank,Iwas the first person to do this. I suggested that this meant that many of the better off clearly don't understand the tax system and she had to agree. What hope is there that the less well off can make the most of their Money'?
When PIEs were introduced it's pretty evident that they are supposed to benefit those in the highest tax brackets. So only the tax savvy and those that have accountants really make the best benefit of the tax advantage. That said dividends and kiwisaver funds do take advantage of this benefit so it's not completely lost on people. Except some people have the wrong tax rate set on their kiwisaver when on low income and pay 28% instead of one of the lower rates.
I think there are many people who are making poor choices with their money. Just look at the number of people's kiwisaver money in the terrible default funds. I've tried to get some of my friends in their 20s to make changes but they're happy with the poorly performing funds.
That said there's a real disaster looming with alterations and improvements to houses funded via credit card. It's all a matter of time before things escalate.
Why is everyone so alarmist on this site? You are acting like some massive crippling drop in the values of housing has already happened and its going to be the end of the world. Even if House prices drop by 10% or even 15% as it did in the last major drop, interest rates are going nowhere, the NZD will drop so our exports will start winning again, everyone that bought a first home shouldn't be too concerned because a House is a long term investment and prices will rise again. There may be a few more opportunities for new first home buyers to enter the market and a few highly leveraged property investors might get caught out with debt to equity troubles which is the risk they knowingly took on when they purchased those houses. Banks will be fine because Dairy and other exporters will benefit from any large drop in residential housing values. Either way its not doom and gloom......
So you're saying everything is fine?
https://cdn2.vox-cdn.com/uploads/chorus_asset/file/6439857/20130109.0.p…
What happens in periods of declining house prices? People pay down debt and other people will save. This will in turn decrease cost of borrowing for the banks and increase their supply of funds for distribution. Either way (If house prices stay flat or decrease) interest rates wont go up significantly.
If the NZ property market tanks I would expect interest rates to rise irrespective of the OCR. When NZ became the darling economy of the Western world, the risk premium typically added to borrowed funds (usually 2% ) evaporated. If the Auckland/ NZ property market falls, NZ will go from being a rock star economy to a small country of 4.5 million overly dependent on a few export industries. The risk premium will be added back on. I would also expect a falling NZ dollar to lead to withdrawal of foreign funds in government bonds/ term deposit to be returned home offshore to minimise the capital loss, reducing bank capital. Additional bank capital loss due to mortgagee sales /bad debts will lead to deteriorating capital ratios, and force the need to seek more expensive funds offshore.
That is kind of what I was saying above Ian (A house is a long term investment i.e. 30yr mortgage). Its not the end of the world as long as you continue to service your mortgage which I would say majority of FHBs would. People on here like to think everything will turn to custard for everyone.
Hi bgballs, Not everyone on this site is being "alarmist". Many are being measured and realistic. (See my own post above as an example.) Auckland property market has (until a few months ago) been buoyant. Markets don't soar forever. They go in both directions. It's "buyers - bide your time" right now, because what unfolds over the next year or two just might be in buyers' favour. We'll soon see anyway...... Finally, it would be unwise to assume "interest rates are going nowhere". The banks themselves are warning that they are being forced to borrow overseas and the increased cost of this borrowing will have to be passed on to their customers. In fact, that is already happening.
Hi TTP, it is refreshing to see someone not getting so much satisfaction at imagining so many people in dire straits. True overseas borrowing has caused cost of finance to increase but if demand for finance were to fall over the next 12-24 months then I cannot see interest rates increasing (Unless there is a new housing boom start up somewhere overseas). Agreed it is inevitable the Auckland market will experience some cooling at some point. If we could guess when it would occur we may well have different day jobs!
A 10 0r 15% drop from moderate prices is nothing to worry about as buyers will be close by. However, a 10 or 15% drop from crazy extreme pricing is a big worry. There won't be any buyers lining up. A 15% decline is just the start.
All markets are sentiment driven and sentiment is turning fast. As soon as everyone realises the pullbacks underway, you won't find a bid. Add to that rising interest rates and the outlook for Auckland property is not positive.
If you are a speculator you could be worried, however speculators don't tend to buy up the market for everything they see because they generally can't. As prices get high the banks need to first look at equity and then affordability. In a growing market the equity is there, however as prices get higher the yield tends to drop and this is generally an affordability issue which a lot of banks won't lend on, so a mass portfolio of hugely negatively geared speculative housing is unlikely for most speculators. So the chance of these people running for the door based on 1 or 2 housing purchases is not going to happen until there is a very clear picture and a longer term trend, rather than numbers over a few months. I wonder how many secured low interest rates for 3-4 years? I wonder how many people actually bought for a long term investment?
If you are a seasoned Investor, you will understand the property cycle and would have bought based on yield and fixed your low interest rate for a number of years, so the interest rate impact in the short term will have no bearing on your repayments now and I don't believe many will be running for the door to dump their property, yield buying is different from CG purchases. If you are buying hoping property will go up then you are really speculating. These investors are probably running a positively geared position in which they are building capital to run through the bad times for a longer term investment, over say 10-20 years.
It seems there are a lot of general comments about what may happen/is happening, there seems to be a general mindset that all investors are going to be running for the door. How are we to speculate what every investors scenario is. Do we have numbers to show how many "investor" properties are negatively or positively geared? If others (first home buyer or family) have bought into the market recently I'm sure some have either, capital from a previous house sale which has given them a lower mortgage as they up sold or fixed their rate for the longer term. That being said, a big slow down may not actually occur for a few years yet when those fixed rates come up for renewal!
One of the biggest issue at the moment is the developers can't get finance and so the new supply of homes that is needed in Auckland is not going to come through. So yes prices are close the a peak but I don't see a dramatic pull back....Although owning an investment property in South Auckland is something I would want to own right now.
With banks last year falling over themselves issuing interest only mortgages to clueless mom and pop investors with the family home as collateral, a 10-20% drop in house prices means an average 600k investment property will be 50k to 100k underwater. So much for their retirement plan, but houses only ever go up they say...
If they are clueless they shouldn't be speculating on housing for retirement. If they are buying an investment for 10-20 years down the track then that's not bad. It will only sting them if they are forced to sell in a low market, speculation will do that.
REINZ price index figures (https://www.reinz.co.nz/residential-property-data-gallery) over 10-20 years suggests that NZ pricing is trending up long term. It does go up and down over time. Even if you allow for inflation it shows that based on these historic figures property is not a bad investment long term.
Almost all investor purchases in Auckland over the past few years have been speculative if you apply a strict definition (income is not enough to pay costs and interest let alone touch the principle). And that speculation has worked out very well.....for now.
No one can dispute the growth in house prices over the past 10-20 years, however, prices barely increased over the entire 20th century in real terms (except the last decade or so). My challenge to any investor/speculator is do they understand why prices have gone up over the past 10-20 years and why do they think those same factors will persist for the next 10-20 years.
http://www.rbnz.govt.nz/statistics/c32
$64,935,000,000 interest only loans currently on the books as of December. Imagine the carnage of trying to pay this down after a big price drop and negative equity....
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