The number of homes being put up for auction is starting to wind down as we head towards autumn and the end of the peak summer selling season.
Last week Bayleys marketed 47 residential properties for auction, spread across Auckland, the Waikato, Bay of Plenty, Havelock North and Marlborough. It achieved sales on 17 of them, giving an overall sales clearance rate of 36%.
At the Auckland auctions prices achieved ranged from $822,000 for a three bedroom/two bathroom, brick and tile house at Flat Bush to $3.75 million for a large four bedroom house in Parnell.
At the Hamilton auction prices started at $572,000 for a three bedroom brick house on a hectare of land at Matamata, and at the Tauranga auction just three properties were scheduled for auction but two were withdrawn, leaving a two bedroom property at Greerton which sold for $450,000.
In Havelock North a large, two level home in the centre of town sold under the hammer for $845,000, and in Marlborough prices ranged from $400,000 to $1.55 million.
Details and photos of the properties offered and the prices achieved on individual properties that sold, are available on our Residential Auction Results page.
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61 Comments
These media releases on property auctions come thick and fast. Hell, we're in the age of "big data", so surely there must be a better measure that would be more newsworthy and relevant. Corelogic in Australia has a fancy hedonic index that factors in a range of different variables that changes on a daily basis. Surely that would be much more useful, even as a media tool. Perhaps sales volume are too small for accuracy.
A daily hedonic index is a huge waste of time. Especially for property.
In fact it would be hard to imagine any situation where a daily hedonic index is ever necessary for tangible goods.
With big data such things are easily possible.
Whether they are necessary or useful is another question.
Because hedonic indices are really crap in data poor environments. Plus a daily index is pointless in the case of a durable good such as property. No one worries about market timing down to the day when purchasing property.
Best to opt for lower variance and just use the monthly hedonic index.
Just because you have the data, it doesn't mean that you should use it to make pointless models.
I've seen work done on weekly indices for the Sydney market based on CoreLogic data and using some pretty trick spatial models and the outcome is that there is very little advantage to their usage over standard robust monthly hedonic indices. This work was well beyond the scope of CoreLogic analysts, so hence my scepticism towards the CoreLogic exercise in futility.
OK thanks. I get what you're saying but the daily index is iterative across many similar data points, therefore therefore the variance should not be any greater than the monthly hedonic index. Yes, I do agree that there is little value in these indexes for the average punter, but my point still remains: what value do these media releases about property auctions have over a larger quantitative data set with an actual methodology?
I don't understand what you mean by iterative across many similar data points.
Variance will be higher in lower observation count sample data due to the ratio of observations to parameters estimated. The best way to decrease variance is to increase sample size or decrease parametisation.
So, no...I general variance in a hedonic estimations based for a daily index (with low observation count) is always going to be higher than variance on estimates for a monthly index (30 times more observations). That isn't even before we start correcting errors for crappy variance properties.
Given the choice of forming an expectation based on daily data or monthly data at a point in time, the monthly data estimate will be, generally speaking, more accurate.
Ideally a hedonic index is most accurate when there is systematic variance in data points. You do not want a hedonic specification (or any linear projection matrix) with little variation in the parameter vectors. The whole idea of a hedonic specification is to estimate the marginal utility of specific characteristics of attributes associated with a good. It's that that forms the basis for the constant quality price estimations.
I don't know what approach they use for estimating the hedonic specifications, though. Could be time dummy or imputation. Probably the latter. In which case the variance will be lower and likely rooted to the monthly variance.
Your point is correct though... Anyone who gets drawn into drawing conclusions from these results is just fooling themselves.
So, no...I general variance in a hedonic estimations based for a daily index (with low observation count) is always going to be higher than variance on estimates for a monthly index (30 times more observations)
But that's the point. The sample size on a single day is calibrated across the whole data set. It is not sum(n=30) vs sum(n=300,000). For ex, if the sample for the daily index is 30 sales of 3 br / 2 bath, the data is calibrated and weighted as such relative to whole data set. That's a basic explanation, but that's how the Corelogic index works. It's a regression, so different factors impact the index, not simply the sales price vs the past.
That depends on the hedonic approach.
If it is the case of a time dummy approach. Maybe.
In the case of an imputation approach. Definitely Not.
From the (brief) read I had, they specifically refer to an imputation methodology.
https://www.corelogic.com.au/research/rp-data-corelogic-home-value-inde…
I don't know what you mean about weighting and calibration to a whole data set. Those words have a very different meaning to how you are using them.
Again, the premise of a hedonic specification is to reveal price based on characteristics of observed transactions in a given period. There is no weighting because it would be structurally unjustified. The only correction would be to standard errors. But they don't report them, anyway.
As you say, it's a simple regression (your understanding of that seems to be a bit different to the mathematical process. i.e. simply the price data is projected onto a simple surface of characteristic variables to reveal an index from the estimation procedure (in the case of the time dummy approach) and/or hedonic coefficients (in the case of an imputation approach).
I will explain. In the daily index, if the sample comprises houses that share characteristics like 3 bedrooms / 3 bathrooms (for example), the data is "weighted" accordingly so that the daily index is representative of all factors. Therefore, the index is an estimate. You might want to read the relevant source materials. Read 2.1 to 2.5 so you understand what it's about.
You say you don't understand "weighting" and "calibration". You say there is no weighting. This a hedonic regression, therefore each independent variable impacts on the index. For ex, if the coefficient for "3 bedrooms" is 0.12, that is the relative impact it has on the total housing stock.
https://www.corelogic.com.au/sites/default/files/2017-09/CL17_CoreLogic…
You honestly do not know what you are talking about.
The hedonic index isn't weighted - that's the point. It is estimating price based on the sum of the utility bearing characteristics of the good. It is then applying the estimated marginal effects of that specification to a constant sample of characteristics.
It controls for changes in composition and quality this way - hence no need for any 'weighting' or 'calibration'.
The conflict is your misunderstanding of 'weighting' and 'calibration' in the statistical terminology.
R-P: It would be fallacious to think that softer trading conditions automatically lead to falling prices......
Vendors might simply refuse to sell - which has often been the case with the NZ housing market.
Finally, there has been no robust evidence of a slide in NZ house prices. In fact, a strong balance of evidence shows that house prices are holding remarkably well - despite the upswing of 2014 - 2016.
TTP
To me "highest since 2010" reads as "not particularly high" as I don't recall it being a concern back then. You have to keep in mind that around 1,600 properties are selling every month in Auckland currently.
The headline of this article states, "The number of homes coming up for auction is starting to decline..." so I was kind of questioning the burgeoning thing.
Have we forgotten that the only reason auctions have been the norm in New Zealand & Australia is because they are inflated markets? I was listening to a podcast by a hedge fund manager from the US talking about the Canadian and Australian housing bubbles, and he mentioned how incredible and abnormal it is that Australia auctions houses like expensive paintings. No surprise auction results will be low and likely all but disappear as the market tanks.
What a difference an election makes. Nat's policy of rampant immigration for anyone with a checkbook, and a policy of sell it faster that you can stack it (unless your stacking debt) has all changed. Labour hasn't really done anything yet, other than announce that changes are coming like ring fencing losses, banning overseas speculators, and that it is going to try and intensively redevelop the unitec site. The main people complaining about the Unitec announcement are the landlords.
I say good on them for trying to do something vs continuing Nationals strategy that, intentionally or not, was destroying the sovereign right to live, work and be able to afford a house in NZ. Last I looked protecting the rights of domestic taxpayers is actually the Governments job.
Hear,hear...as you say,for all that is said about bricks & mortar,not making any more land etc...much of the market is driven by sentiment & emotion...any asset is only worth what someone is willing to pay.
So we have it,that even talking about change is having an effect...maybe this govt is even smarter than they seem...haven't spent a cent and they have achieved more in halting the run away train than the last lot lol...
Hopefully yes...maybe that is being subtly slowed by talking things down as well...they are turning of the low budget education schemes which should discourage many from the subcontinent...I am hoping as with housing,it will be something we suddenly notice in a couple of years and go "..when did those house prices come down...when did people stop coming in droves..."...we don't want to scare the horses...
Increasing numbers of sold properties with strange phenomena "PRICE WITHHELD".Hmm! Wonder why??
Some have price sold disclosed and which I presume are good.So good endorsement of the agent.
But, majority seem extremely "shy" to disclose the prices achieved. Perhaps not a good endorsement of the agent's abilities, having most likely "bought the listing" by pitching sales talk at elevated price levels & raised Vendor's expectations .Only to shatter it when the market reality sets in
I think it's on Trademe.
For example under sold:
https://www.trademe.co.nz/property/profile/david-simons
Yeah, I look at this info via trademe too. Huge number of "price withheld" showing up over the last few months. Look at the number on this agents history;
https://www.trademe.co.nz/property/profile/nicki-cruickshank
Just get into any agency's branch office's website.Simply click on an agent's profile for his/her SOLD properties. And you can feast your eyes on the long list of "Price Withheld" properties. Having claimed to be able to secure top-notch prices, it certainly does not look too good for the agent's credibility to publish that actual prices realised were in opposite direction.
Wonder where all those big spenders have gone? Any chance they'll return? Nope!
BBC article: China's anti-corruption campaign expands with new agency
http://www.bbc.com/news/world-asia-china-43453769
Comparability is absent from your contributors comments. Comparing areas on auction is particularly invidious. In terms of listings: RE NZ was 10,770 at low in August. Yesterday it was 13600. So, up 30%. Sales up 2% on latest year on year comparison. SO, pretty clear what that implies.
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