There were plenty of bidders about for this week's main Auckland apartment auctions, but they were cautious about price on some of the apartments.
Barfoot & Thompson had three units on offer at their main apartment auction this week and there was competitive bidding from several potential buyers on two of them, both of which sold under the hammer.
One was a two bedroom unit in the Harvard on Hobson building, and the other was a two bedroom unit in the Zest.
However a third unit in the Queens Lodge complex in Newmarket didn't receive any bids and was passed in.
There was also very strong bidding for a 230 square metre industrial unit in St Johns, which also sold under the hammer.
(The prices for the units that sold are available on our Auction Results page.)
At Ray White City Apartments four units were on offer this week and although there was competitive bidding from multiple potential buyers for all of them, only one sold under the hammer, a two bedroom unit in the Eden Apartments building.
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29 Comments
Auckland apartments are also tiny
They're not a solution to the housing problem
Unsuitable for families or long term living arrangements.
Overseas they build bigger and better designed apartments & terraced housing
Sadly if NZ continues with a building supplies duopoly cost of materials will hurt buyers too
Not even that good, it was
2 out of three
and
1 out of four
The numbers are rather small in terms of properties being auctioned, and the numbers sold are much smaller. The good times for sellers has passed, at least for now. We shall see as to when the good times resume.
There have been a whole series of auctions in Auckland (houses & apartments) over the past few weeks with clearance rates ranging from around 33% to around 55%. (A small handful fall outside these margins.)
That's a clear enough indication to me that market activity has slipped back since the heady days of 2014-2016. But what else would one reasonably expect?
The market may slip back further or it may plateau - at least until the election - but foreseeably for longer.
However, those who yearn for a "crash" (and there are plenty who contribute to this blog) will inevitably become forlorn. Demographic and other key long-term indicators remain robust for both Auckland and Wellington. From the world-stage perspective, these two cities in particular have become markedly more attractive destinations for property ownership/investment.
History shows that most long-term property owners/investors in NZ are exactly that: they're in for the long haul. They don't give up easily. Well-located property is always a prized asset for them.
Yes I think tothepoint who is clearly an Real Estate Agent is sadly waiting in vain for the Foreign Buyers to return to plunder the market. Well it looks like they have other plans, so you're stuck with us poor Kiwis and expats. Aww didums
Time to redress the balance. You may want to think about dropping your commission rates RE's how about 1% ?
yup... no RE agents want sales to slow down so are encouraging sellers to drop their price expectations. Volume is more important than price for them. Tothepoint clearly wants price expectations to remain high so either isn't a RE agent or is one with a very bad strategy.
@tothepoint: So if you claim not to be an RE and have not interest in buy and selling property. DO you even own a property or properties in NZ? Just want to known your motivation and whether you have any experience of the market otherwise I think you are giving very I'll advice.
Since you keep encouraging everyone to invest in a falling Auckland property market, that's still got a lot further to fall.
You do realize that if a FTB takes on a huge amount of debt to purchase a home here this could leave them with negative equity if Auckland property prices continue to fall (That's looking highly likely) and therefore they're likely to loose not just their investment but also their home.
Do you even care about FTB's as I very much sense that you don't.
Tothepoint you are probably right in respect to long-term property investors. But I think it is the speculators and highly leveraged households that are the risk to the overall housing market and house prices.
But as you say, the long term investor will hold out regardless of how far the market plummets, so people like yourself have nothing to worry. I do wonder why you keep posting the same thing though?
Don't want to appear a doomsdayer, but there's a good chance of a major Wellington earthquake in the 'long term'., a quake that would make Christchurch appear minor.
Who knows when that will be.
Could be in 5 minutes, could be in 30 years.
I'm not saying people shouldn't invest because of the possibility of a major earthquake.
But my main point is that kiwis consistently overestimate the 'stability' of this country.
We are very complacent.
And I would include terrorism high on our complacency list.
It's something that's lived with in Wellington. The big fault would do extensive Kaikoura like damage and some reports suggest that the region would be broken into several "islands" with all the landslides. All you can do is prepare and not be over invested in any one region.
You have raised the wider issue with risk perception being low when the real risks have not changed and are much higher that is perceived. Not a lot we can do about that.
The risk has always been there. Long ago in the early days of the internet in the 90s one of the usenet groups often discussed how lax security was everywhere in the west and that terrorist activities could easily be carried out. It was a real concern but it took a lot of terrorist acts for things to change. While I have no doubt that we may be lax right now I'm hoping we are less lax than we appear.
The day we found out we had an anti-terrorist squad was quite a surprise for most of NZ during the event. Things have moved on a lot since then.
The risk of an earthquake is a very good reason why I wouldn't want to live in an apartment in the Wellington CBD - and wouldn't want to even enter a building on reclaimed land (near Wellington Port/Harbour).
I'd much rather live in an old villa in Brooklyn or Kelburn, because they withstand earthquakes much better than modern high-rises.
But you're correct: the risk of earthquake is lived with in Wellington. Nonetheless, the "E" word is more unsociable than the "F" word.
Hi Gingerninja,
I always enjoy reading your posts, which are well-considered and clearly written.
You write above, "I do wonder why you keep posting the same thing though?"
That's a fair enough question. Yes - there tends to be a common thread in what I write and that's because, as a very long-term observer of housing markets globally, I've reached a pretty clear understanding on how they work.
The reality is that the fundamentals of housing markets don't change too much over time. Cycles, in fact, are readily observable from long term data series. Structural changes are the biggest challenge but with the information that becomes available nowadays, seasoned analysts can usually make reasonable sense of them as well.
I'm most unlikely to ever change my view/position on the NZ housing market on a daily/weekly/monthly basis. Property market analysis/forecasting has very different parameters from weather forecasting!
Hope to talk with you again soon. Enjoy the evening and keep up with your excellent, insightful contributions!
@tothepoint: I reflect Cowpats point of view. Tothepoint; you shouldn't be continuing trying to push up property prices when you have absolutely no evidence to back up your claims of the current downturn as a temporary cycle.
Do you even understand the market conditions that have caused this current down turn in Auckland's market?
Do you even realize when it came in to effect?
See I am an Auckland home owner and landlord (Though I have sold off some properties due to wanting to get out before prices really reduce).
And I have been very closely watching the NZ market over many years and know what cause prices to rapidly spike, so I very much recognize how this market works and just how ruthless RE's are.
Hi Gingerninja,
Am enjoying the dialogue this evening!
Cycle is clearly past the peak in terms of sales volumes - but some rebound possible (even likely) post-election and post-winter, assuming no change in government policy.
Prices have been sticky-down - i.e. remained remarkably high. Auckland market prices have proven very resilient, surprising many observers. But reasons for this are now becoming clearer - and are related to structural factors (more so than cyclical). Percentage drop in (nominal) prices destined to be much less than percentage drop in sales volumes. In fact, there's now a reasonable prospect of (real) house prices in Auckland plateauing or even rising modestly over the next 1-3 years.
Re what RBNZ proposes with DTI tool, the Bank hasn't provided sufficient detail as yet. Need more/better info to model outcomes reliably. Consider also, that whatever regulatory tool is introduced in NZ, an industry will soon emerge to devise ways of getting around the regulation. The latter is difficult to model.
My personal view is that the main issue here for any government is to make sure young families get adequate housing that's affordable. And the same for older people don't want to rent in retirement. To me, it's a dignity issue as much as anything else. The current situation, therefore, is untenable.
We should never forget that the main purpose of housing is to provide shelter for people - and, thus, contribute to their basic wellbeing. Property is not just a vehicle for people to accumulate wealth (and income).
Property investors/speculators/landlords - please take heed of the paragraph above. A little soul-searching may be in order.....
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