There was an increase in both the number of properties that Barfoot & Thompson took to auction last week and in the sales clearance rate.
The agency, which is the largest in the Auckland region, marketed 194 properties for sale by auction last week and sold 56 of them, giving an overall clearance rate of 29%.
In the previous week Barfoots marketed 172 properties for sale by auction and sold 22% of them, and two weeks previously 151 properties were up for auction of which 26% were sold.
The most surprising result of last week's auction was the big North Shore auction where 34 properties were on the bill of fare but only four (12%) were sold.
But at the big Manukau auction,where 43 properties, mostly from south and eastern Auckland were offered, the sale rate was 42%.
At the auctions conducted in the company's main Shortland Street auction rooms, where most of the properties offered are from Auckland's central and western suburbs, the sales rates ranged from 27% to 38%.
Overall, the results suggest the market is continuing to track on the same steady course that has been evident for the last few weeks.
Details of the individual properties offered and the selling prices of most of those that sold are available on our Residential Auction Results page.
| Date | Venue | Sold | Not sold | Total | % Sold |
| 19-25 November | On-site | 5 | 14 | 19 | 26% |
| 20 November | Manukau | 18 | 25 | 43 | 42% |
| 20 November | Shortland St, CBD. | 4 | 9 | 13 | 31% |
| 21 November | Mortgagee/Court | 0 | 1 | 1 | 0 |
| 21 November | Shortland St | 12 | 32 | 44 | 27% |
| 21 November | Pukekohe | 2 | 8 | 10 | 20% |
| 22 November | North Shore | 4 | 30 | 34 | 12% |
| 22 November | Kerikeri | 1 | 1 | 2 | 50% |
| 22 November | Shortland St | 4 | 8 | 12 | 33% |
| 23 November | Shortland St | 6 | 10 | 16 | 38% |
| Total | All venues | 56 | 138 | 194 | 29% |
81 Comments
Mortgage debt creates money in the modern economy. Paying off mortgage debt destroys money in the economy.
Seems like there are more people wanting out of the mortgage than into it by the looks of these results!
Yesterday, some people here were picking a worsening result from B & T's latest auctions.......
Today's headline, however, clarifies that the converse is true.
As we head into summer, the weight of evidence indicates that the Auckland housing market is gathering pace - despite the Foreign Buyer Ban.
TTP
we are 2 days away from the end of SPRING (no spring bounce in housing)..
there are ONLY couple of auctions before shutdown till the beginning of Feb..
and the sale rate is still in the 20's....
WOW..
Yes indeed, it has hotted up to a 71% failure rate, let the good times roll.
Clutching at straws there mate. 29% is really poor.
TTP. Mr Orr has a favour to ask... it's your round again by the looks of it!
'The housing markets' future is in the hands of people who want to step up and borrow' (Adrian Orr 28/11/2018)
"'The housing markets' future is in the hands of people who want to step up and borrow' (Adrian Orr 28/11/2018)"
When, in history, has that not been true.......?
TTP
What weight of evidence? 29% clearance rate is 'gathering pace'? You mean gathering pace for a downward price correction, right?
Funny to read this article from the herald from 2015: https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11…
Clearance rates back then "dropped" to 50ish percent and suddenly everyone was scared and sellers were "urged to be realistic".
I don't think the data supports that view. Check RBNZ C35. That shows clearly that mortgage drawdowns exceed mortgage repayments every quarter since March 2015. Over the whole period, the excess is +$14 bln. In the past year is has been a bit under +$2 bln (although that is lower than just over $2.7 bln in the prior year).
Bottom line is that mortgage drawdowns are rising faster than mortgage repayments (which incidentally are made up of scheduled repayments, plus repayments in full, plus repayments in excess of loan scheduled repayments).
Besides, be careful drawing cobclusions from auction results on this matter. Auctions seem to make up only a small fraction of all rel estate sales activity. And resales data from REINZ doesn't include sales of new builds.
Thanks David
Expertly done. Why do REINZ not include sales data of new builds?
There's a hint in his comment.
"And resales data from REINZ doesn't include sales of new builds."
You can't use new builds in repeat sales or SPAR indices for obvious reasons. However, they are fine in hedonic indices and I dare say the REINZ HPI doesn't exclude new builds.
Word salad. Doubt even you know what you are on about.
You have the mother of all superiority complexes.
Fine. I'll bite.
What about my comment is "word salad".
Again, I'll remind you; just because you don't understand something, it doesn't mean that it is nonsensical.
I’m sure they’ll be many drawing down a little more on their mortgages ( revolving credit line ) to give themselves a buffer for what’s ahead in 2019
Best to draw down now rather than leave it later when your bank may tighten criteria
You won’t lose your house if you have enough liquidity but you will lose it if your bank suddenly stops your ability to borrow.
Latest Core Logic estimate on my home (Kohi) is back up to 100% of CV as at 25/11.
Finally the monkey scores a direct hit on the dart board.
You must be corking that Champagne bottle. The true value is the amount of money someone willing to pay for it.
Guys, guys, Homes.co.nz still has my property at 118% of CV!!! 121% of purchase price. Haven't I done well, *brring brrring* oh hold on Roy Hon Fong is calling me BRB.
Actual sale value may be quite different from the estimated market value.
I recall a property in Auckland being valued on homes.co.nz at 42% above the most recent CV at the time. The subsequent actual sale price was 12% lower than the valuation by homes.co.nz.
I'm sure that there are many instances of this occurring where the valuations are different to the ultimate final sale price. Valuations may be re-assuring for you but the final sale price (and sales proceeds) is what really counts.
Look at the GFC in 2009 / 2010 - many banks valued their assets at their estimated value, yet when they needed to sell, the prices they received were much lower than their valuations.
Apologies, just got off the phone with Roy Hon Fong. He said you're wrong.
Yeah and also does not reflect the vendors expectation which is low to get it sold and to avoid unceratinity (Previously when the market was going up every week buyers were jumping to avoid paying more in future. Similary now when the the market is down Sellers are jumping to sell to avoid getting less in future).
To know how the matket is : 29% Success rate is supposed to be very good. It intself explains the current market situation.
''...be careful drawing conclusions from auction results on this matter. Auctions seem to make up only a small fraction of all rel estate sales activity."
A very good point. Add to this the fact that in a flat market without FOMO buyers, auctions can paint a overly pessimistic picture.
I see a good proportion that sold in this property specific (buyers market) have sold above CV. This will further distort the dataset when REINZ next report. Many disillusioned vendors have no choice but to offer that extra something (renovate or discount) to attract the discerning and patient buyer.
What housing shortage?
There is a housing shortage, its called an affordable housing shortage. If everything dropped from $1M tomorrow to $100K there would be zero houses for sale the day after because I for one would instantly buy five of them and they would all be SOLD.
...so you agree we have a growing glut of overpriced homes then? Faced with the fading influence of the marginal buyer together with our nearest neighbours houses getting cheaper by the day, it doesn't bode well for Auckland and consequently, the entire country. The RBNZ knows what's coming and is opening the taps to help mitigate the growing risk.
This is what I don't understand about reserve banks attempting to play god when they look more like satan
Retired Poppy
This is good news
Lowering prices means a lot of people will find a home the can afford even if we aren’t low enough yet
And its now that you realise (or perhaps not) you have no self awareness because you are in fact the problem we need to address, not the solution to the issue.
Greed and the assumption that people need to own 3,4,5,6.....houses because they want to make money, as opposed to having a (yes one) place to live, raise a family and retire...
Greedy speculators are the issue we need to address - get rid of them,they offer nothing valuable to the country.
Anyone calling themselves “Independent- Observer” is suspect
The landlord who busts his guts out cleaning up houses after tenants ruin them you mean ?
The last tenants I had were a computer programmer & his accounting wife & child
They managed to not only destroy parts of the wallpaper but stained the middle of the main lounge carpeting
So bad the professional carpet cleaners gave up
Yes you need to be an Auckland landlord to experience the ups & downs
An independent observer working for the Politburo.
I hear the northern lights aren't so bright these days
Market appears to have bottomed out and will slowly rise. Heading to Christmas pretty fast now so its more or less all over for 2018. Next year could see some interesting developments.
I very much doubt it has "bottomed out" and is "rising". The rise from 26% to 29% is hardly a massive rise.
If it were to drop the same amount and someone called it "falling" people would be screaming that 3% is pretty meaningless and we need to keep a look out for longer term results.
Understand headlines are used as click bait.
But would we class 26% to 29% as "steadily improving". Historically, isn't this prime time? Still seems to be very low clearance rates.
Agreed.
Its winter on this side of world Snow
So that must be the reason
When I saw the headline I thought ‘damn might be up in the 40s’ but no it’s in the 20s. It would be interesting to see the step change that occurred in late October on a graph.
12% clearance on the Northshore.. and the market is on the improve? Yes Auction volumes are up, but it is a stretch or misleading to say sales rate up also.. can anyone remember when NS clearance was lower than 12%.?
Sssshhh !
56 very happy vendors this week.
And 138 not so happy ones!
Some very interesting results again. One outlier auction in Manukau takes the overall rate up from 25% (results without Manukau) to 29%.
Be worth checking out what the mix of houses in the Manukau auction was like, to achieve a much higher rate than everywhere else in Auckland did.
Why cant we get the sales data for all houses sold by auction and by negotiation? or am i missing something?
Fantastic news
Time for a parade down Queen St
194 homes for sale
56 sold
138 unsold
29% Sold. 71% Not sold
I guess this is a booming market right ?
Ok I picked 35%
I wasnt expecting another result in the 20s in peak selling season! that is a ridiculous result!
I guess this is why the RBNZ is relaxing the LVRs, things are getting desperate!!!!
Yeah, I was personally expecting high 30's to 40's. Pretty bleak result considering the time of year. I don't know how some people can try and spin this as being a good result in terms of clearance.
Oh and sticking out like dogs balls is the north shore result
4 from 34, what the hell is going on there???
Any insights anyone????
Dear thegic
North shore vendors refuse to lower their asking prices is why only 4 sold
As said earlier the smart property owners will use this time to draw down more mortgage funds & bank them for the coming 2019 probable financial crisis
The banks won’t be so obliging later if your market valuation declines too far
"North shore vendors refuse to lower their asking prices is why only 4 sold"
Not sure what time period the 4 transactions occurred.
If it is for a month, then that is a low level of market liquidity. With such low transaction volumes, if vendors become financially stressed (loss of job, reduction in household income, etc) then some vendors who have had their properties listed for sale for a long period of time will consider accepting lower prices in order to get them sold. (In 2009, I recall a vendor who had their property listed for sale for 12 months as there were no interested buyers at the price indication level, where the vendor cut the price that they were willing to accept - this resulted in a loss for them).
Other vendor types (in different circumstances) may be unwilling to wait that long such as
1) estate sales as surviving family members don't want the holding costs of the property and don't want the hassle of managing the property,
2) vendors who need the cash to purchase another home such as upgraders, downsizers and those moving into retirement villages, those relocating to other cities for job opportunities, those relocating to other locations to be closer to family, relationship breakups, etc)
Let's take a look at the North Shore neighbourhood of Takapuna.
1) As at 21 Nov there were 121 properties listed for sale
2) there were 20 transactions in the neighbourhood for the last 3 months (or about 1.54 transactions per week)
What happens if a large number of the 120 current vendors become desperate, time constrained or unable to withdraw the property for sale from the market for any of the above mentioned reasons? For example, say 40 vendors have deadlines which they need to proceeds from the sale, then these vendors may be more willing to accept a lower transaction price.
These lower prices will then become price comparisons for the neighbourhood. This then impacts:
1) bank LVR's on existing property loans - especially loans where the borrower is on interest only terms and the bank may reassess the property portfolio value for property investors which could require the borrower having to reduce their LVR to levels acceptable to the bank. If the borrower has insufficient cash, then this may require selling properties in their property portfolio.
2) asset values used to determine bank loan amounts for new borrowers. Lower asset values mean lower borrowing amounts potentially.
3) changing price expectations for potential buyers that they prefer to wait for lower prices before actively looking for a property. This results in the number of active buyers in the local property market falling.
This is what many people overlook - they are led by many to focus on underlying demand and supply, (rising demand due to immigration and population growth, small number of new houses being built in the area) as there is a (underlying) housing supply shortage of housing in Auckland .... Meanwhile in the property market place, there is an (effective) housing oversupply due to the absence of buyers at current price levels which is resulting in falling property prices. (there are active buyers at lower price levels, not higher price levels)
"Not sure what time period the 4 transactions occurred. "
Well, if you look at the handy chart, you'll see that those 4 transactions (out of 34 available) occurred on the 22nd November. I mean, it's right there unless I'm the one completely missing something...
Thanks. I overlooked it.
The comment about the property market and what happens when there are low levels of market liquidity (i.e transaction volumes), and an unchanged or increase in vendors coming to market is the key point to note - this causes the effective property market imbalance between demand and supply and resultant market price changes.
Did anyone here pick up on Mr Orr's 'Watch, worry and wait.' from the financial stability report... excellent!
Here we have an example of the resilience of the leafy suburbs:
https://www.barfoot.co.nz/766228
RV 960k sold for 1.010M. Nice little two bedroom brick and tile unit in Epsom. Buy these while you still can.
Actually a lot of potential in this one. A premium price for a do-up but it could be made into a three bedroom possibly and made a lot nicer inside.
Zach
You must be joking surely
Leafy burb yet Only a mere 40K over RV !
Yes that’s.....extraordinary if you say so
50k over and a do-up! This is actually a very smart buy.
For another 500K this is what you get across the ditch!
https://www.realestate.com.au/property/40-price-st-wooloowin-qld-4030
$1.010 Million. What a dive, the kitchen and bathroom look like they're from the 60's and it's a unit! Honestly, I wouldn't even pay $280,000. It's small and the wallpaper is hideous, everything about it is hideous.
Somebody got taken for a ride.
Are you taking the piss?
By comparing auction results week to week and making deductions on what the market is doing by those comparisons aren’t we kidding ourselves a bit. In all likelihood as auction results change the makeup of the properties in those auctions will markedly change as will vendor and purchaser behavior. As with prices, are they going up or down? The results that are being focused on are the prices of properties that sold. What are the prices (between a will buyer and a willing seller) of the properties that didn’t sell, that we don’t know
I grew up in Epsom, a brick and tile sht box unit for a million bucks is a smart buy seriously?
29% at this time of year is horrendous. Market will tank in 2019 do not get sucked into to this if you are a FHB.
"Market will tank in 2019"
Yeah right Tui
Honest question, considering this is the height of the selling season & clearance rates are 29%.
Looking forward, what would you expect clearance rates to be in autumn & winter of 2019?
"Looking forward, what would you expect clearance rates to be in autumn & winter of 2019?"
Answer: Quite possibly as much or more than they are now. There are quite a few positive signs for the housing market, the most recent being the RBNZ's changes to LVR's - announced earlier today.
A whole bunch of people here predicted, fervently, that Auckland house prices would collapse before the end of 2016; and then by the end of 2017; and then by the end of 2018.......... but these folk were wrong.
It's now about 26 months since the Auckland market peaked. With every month that passes, there's less chance of a sharp downward price correction........
Instead the Auckland market is likely to simmer on with notably good selling prices recorded - especially in preferred locations handy to the CBD.
TTP
by tothepoint | Fri, 24/02/2017 - 10:00 "A fall of a mere 12% over the next 3-4 years would be a soft-landing, given the spectacular gains of the recent past. So, hardly a forecast to get too uptight about. But the fall could be more pronounced than that - shouldn't rule that out. Auckland property prices are in decline now. Unless there's a compelling personal reason, why would one buy a house in Auckland at this juncture? Better to "buy low and sell high" than the other way around - every Joe & Jill Bloggs knows that. And that's exactly the reason buyer confidence is fragile - as indicated by the falling numbers attending open homes (while sellers/investors are striding towards the door in increasing volumes). Buyers have largely got the message that biding one's time is a prudent strategy right now, while over-geared owners/investors are displaying a nervousness not evident a few months back"
Shortly afterwards, around April 2017, Agent TTP was born. From there Agent TTP's forecast spun 180 degrees. It's still the same market, the only thing that's changed, is TTP is now an RE Agent.
Requests for some concrete analysis as to why his forecast had changed so abruptly have been met with silence. Void of an explanation, he joins Yvil as just another Flip Flopper.
Furthermore, house prices collapse over a period of years. Not within one year. What a silly and desperate fabrication to concoct.
Hi R-P,
First, note that there have NOT been "spectacular [price] gains of the recent past". Auckland house prices have been pretty stable, overall, for more than two years now - and sales volumes have diminished markedly.
You've firmly staked your reputation on your prediction that the median Auckland house price will fall by at least 5 per cent [year-on-year] by the end of 2018.
Clearly, it's prudent for us all to wait and see what transpires in this respect - before we attach credibility to your prolific advice and recommendations.
TTP
Agent TTP, you comment "there have NOT been "spectacular [price] gains of the recent past"
It was YOU that posted the April 2017 comment saying there had ;-)
Next you'll be running around claiming the GFC never happened......
Hi R-P,
I quote:
by Retired-Poppy | Wed, 28/11/2018 - 14:33
up1
by tothepoint | Fri, 24/02/2017 - 10:00 "A fall of a mere 12% over the next 3-4 years would be a soft-landing, given the spectacular gains of the recent past. So, hardly a forecast to get too uptight about.
........ So there we are, for all to see. The passage by me was written on FRIDAY 24/02/2017 which is 21 months ago - so historical!
R-P - you need to update yourself!!
TTP
Ha-ha-ha :) your response certainly provides a snapshot into the mind of an RE Agent. Resign and speak the truth, your conscience depends on it.
Hi R-P,
I suspect you're more than a little anxious about your aforementioned prediction concerning Auckland house prices.......
For sure, there's a lot resting upon it for you.
TTP
Ha-ha :), nah - not at all. Please feel free to question my timeline. My bias against further price appreciation cannot be questioned by those who can't even perform some analysis and publish sound facts. As you already know, property prices have fallen in any parts of Auckland by up to 10% (unadjusted for inflation). Property prices are heading one way - down. The difference going forward, more and more areas will succumb.
Nah, Auckland houses will tank next year for sure!!!
It will take more than easing of LVRs and reduced interest rates to save it.
Buyer demand has disappeared!!! and the coming debt crisis hasnt even started yet
predictions for end of next year
Italy - Toast (Greece 2.0)
China - stock market and housing crash and complete Kaos as currency dives
USA - Stock market Crash and Recession
South Africa - Extreme Recession
Australia - Recession and continued housing correction
NZ - Recession and big housing correction
Argentina - Extreme Recession
So quite optimisitc then
Its a lot more probable that not.
I predict China and US will have a go at each other, we will be pooped!
Auction rates are clearly down in Auckland compared to where they were!
Anyone with any brains will be buying now as people that normally go to Auction tend to be more motivated, well many are in Christchurch.
I will state that the motivated vendors are always where I buy property at under true market value and especially when I have no competition.
Get alongside successful people that have been there and achieved and you won’t go wrong!
"Get alongside successful people that have been there and achieved and you won’t go wrong!". Thought I've seen and heard that phrase before.
Aha, Richmastery brochure and Phil Jones opening line !
"Get alongside successful people that have been there and achieved and you won’t go wrong!" Not much chance of that on this site. It would be interesting to know the net worth of some of the people on here and I wouldn't be surprised if some of them were in negative territory either from their comments.
Net worth in financial terms or as a productive member of NZ society?
Net worth typically refers to financial position. Please don't further confuse the already confused on this site ! LOL. This site is all about people giving what is essentially financial advice not how to become Mother Teresa.
I agree, no Virtue Signalling allowed on this site.
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