Auction activity continues to decline from its summer peak with sales activity tailing off surprisingly quickly in the Bay of Plenty.
Interest.co,nz monitored 360 residential property auctions last week (19-25 March), down from 381 the previous week, and and down from the summer high of 441 in the first week of March.
The sales rate at auction is also declining with sales recorded on 103 of the properties offered at auction last week giving an overall sales rate of 29%. That's down from 36% the previous week.
The biggest surprise over the last couple of weeks has been the decline in the auction sales rate for properties in the Bay of Plenty.
It slipped to just 18% last week, which means the sales rate in the BoP is now below Auckland's (see the table below for the sales rates in the regions with the highest level of auction activity).
The decline in the BoP's auction sales rate has been sudden and swift.
Up until a few weeks ago its auction sales were some of the most buoyant in the country.
Even Canterbury, which has had the most buoyant auction activity of any region over summer, has started to show signs of a slowing market, with the sale rate in the region slipping to 59% last week form 64% the previous week.
It appears that the slowdown that was first evident in Auckland over summer is now starting to spread out to other regions as the market heads into autumn.
You can see details of the individual properties offered at all of the auctions monitored by interest.co.nz and the results achieved, on our Residential Auction Results page.
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86 Comments
What does Will Smith, Property Brokers, and late to leave the property market investors all have in common ? First they were Laughing, then they were Angry, and finally they were Crying.
Laughing - Angry - Crying. = LAC
Some of those people LAC in Timing, Integrity, Honesty, Self Control, Reality.
7% interest rates are Guaranteed this year. -30 Crash in home prices is a Certainty .
I'm not convinced 7% is on the cards this year, 5% yes, 6% a real possibility.
If we get a 30% drop by the end of the year, it wont be stopping at 30
There already are 6% rates with ANZ. It’s already happened.
true on 4 and 5 yrs, I was referring to 1yr
Interest rate rise have just begun so many will go for 4 years or years as 7% could be as early as October.
2022 - Just for clarification, when you refer to 7% are you meaning 1 year rates, or 4/5 year rates?
Presumably it's the latter?
If I put my house up for sale by auction I will simply take the best offer and neg. It is a good place in Auckland but I dont want an inflated price that has been bid up by bunnies.
I don't think repeating this prediction over and over will make it happen.
In many ways it would be good if it did, but previous experiences suggest that the RBNZ / Govt will take the path of least collateral damage to find an exit to this mess.
As unfair as it may be, I think it's more likely that we'll see interest rates below what you're suggesting, high-ish inflation for a period and a devaluation of the NZD.
Personally as an exporter I do not want a high nzd... it can stay where it is or lower. However the rbnz will probably think otherwise so they can slow the economy to a crawl whilst reducing imported inflation.
RBNZ is forced to raise interest rate - like it or not.
Economy has been distorted in guise of support. Anything in extreme is bad and pandemic gave opportunity to politician to ............
I'm not so sure. The economy already appears to be starting to turn. Domestic demand driven inflation will dry up pretty quick if so, probably coupled with increased unemployment. In that situation, I think RBNZ will prefer to 'look-through' external factors and we'll see a devaluation in NZD rather than increasing interest rates.
i.e. everyone gets poorer (in real terms) to protect the value of houses in nominal NZD terms.
What are the sales prices doing Greg? Are the reserves lower than expected yet?
The new RV's down here have sent the benchmark. Everyone will tell you the RV should count for nothing but that's simply bullshit in the mind of a buyer. The house I watch sell at action one went under the other went over. The RV is now a good starting point and your not going to want to pay hundreds of thousands over it anymore.
Soimon has nominated a huge number for his humble abode Lucky him
YOU'RE going to be surprised when the RV becomes a price ceiling instead of a price floor.
Be quick!
Like the ceiling in a cathedral. Very high, but no one goes up there. Beautiful grammar Mr Landers !
I bought my house in Chch 3 years ago for about 10% below RV - they don't guarantee anything.
With new RV in Auckland, most house are and will go atleast 10% to 30% below, if not more.
Cue Averageman : K***rrrk! - wanna buy a vowel?
I'll take 4 As please
KAAARRRKK!!!!!
I’m surprised that anyone is surprised by the falling sales rates in BOP.
It would be like standing on a railway track looking at a locomotive in the distance, that is coming towards you, and then being surprised when it hits you.
I reckon The Tron will get whacked.
I used to call the Tron the asshole of NZ, but to be fair its come a long way since I used to have to drive there on business, still anything looks good after driving through Huntly.
Looks way overpriced to me, for what it is.
Hamilton is great, I’m not sure why you keep saying this.
Just my personal opinion.
I just don't think it has many benefits of a larger city, but it has some of the problems.
The river is pretty though....
Have you visited the lake on your travels or even know there is one. Prices for a Hamilton central city home with lake views would make you cry
I’d argue the opposite. It has an accessibility to all that’s great about the NZ outdoors.
All the services of the city and good employment opportunities. It’s probably closer to the airport for international travel than the North Shore.
Light traffic, and if there’s a show in Auckland you want to see, even on a school night, you can be back by 12.
Your judgment on this one is way off.
It's personal taste, I like big, vibrant cities full of different choice and opportunity. I also like being next to the sea.
But we'll leave it there, if you love it great!
Lol, why do you live in New Zealand then?
Seems to me you’re just trotting out old tropes with no substance.
Auckland is big enough, with more than enough choice, diversity, opportunity and culture.
Amazing natural setting too.
We all have choices but mine don't align with yours. I left when the travel anywhere left me depressed (to get groceries for example), the violence of the inner-city made me avoid it after 6pm and I realised that people had ether caught the free money property bus or where hanging on to the outside looking in. Not my cup of tea at all.
I went to uni, Hamilton, years ago. Shame all I did was drink back then. But now I would go to Raglan a lot as Raglan is cool. Also close to a lot of beaches on east coast. Hamilton is not for me, but definitely can see why people like it.
I could be at the Manu bay car park in 40 mins from my place in St Andrews.
too easy.
I live half way between Auckland and the Tron. My vote goes to Hamilton. Easy access, everything you need in terms of retail, great gardens and a reasonable Museum. The International Airport should be in Hamilton, that would certainly ease congestion in South Auckland. Auckland is the wrong shape to grow any further as it is already a bottleneck for any traffic moving through. Hamilton has room to grow.
Remember when you could pitch a tent or sleep in ya wagon at Manu's and light a fire to boot? Then wake up and paddle out on your lonesome into uncrowded perfection. I do and it happened.
There is always Sunset Beach/Port Waikato!
Sadly too young for that.
Jonny don't ruin it, people should think the Tron is a hole. That sounds good to me, I moved from Auckland because it was so much better on every metric that related to me. No regrets and in fact I am shoulder tapping good people to have a look, it really is that much better.
Tron adjacent certainly looks vulnerable. Huge building projects have happened on the outskirts of places all over the Waikato. Places like Leamington outside of Cambridge. I can’t fathom how the prices in such places are even remotely sustainable.
..add TA, Morrinsville, Paeroa etc ..all those little towns seem to have new suburbs
Yep it is horrible, brand new houses on large sections with schools and local amenities. What were they thinking.
Honestly Waikato could not be less vulnerable, it is a primary industry hub, a booming tech sector, and has building and infrastructure projects committed for at least a decade.
Happy for people to be mis-informed as it will keep a lid on the population growth (which is double digits anyway) but the Waikato is doing well.
Excellent and informed post JAO.... the losers who made the other comments are only here to talk shite
"brand new houses on large sections" - more sprawl. Great if that's the choice you want to make but hopefully whoever buys these properties is prepared to pay for the infrastructure and maintenance of the roading infrastructure and suck up the petrol prices to move around rather than relying on the rest of us to subsidise their extravagant choices.
100 percent agree…Morrinsville is so overpriced and is still the armpit of the Waikato.
I reckon you are way off, if you want a nose-bleed fall you need to look at Auckland, the list of reasons is long and some more obvious than others.
I am putting my money where my mouth is, I recently sold an apartment at the peak (inner-city townhouse) in Auckland and put it into housing in the Waikato.
The regional development plan is ambitious and funded by Auckland water rates, the HCC is working hard to lift the cultural aspects (which given it is the home of Tainui does not just mean new theatres (although we are building a new one of those)) and the developments currently in plan (Peacocks, Te Awa lakes etc) will keep the supply of new quality housing up making it economically attractive to employers.
Lastly the expressway will mean it will be faster to get to Sylvia Park for shopping than if you lived north or west of central Auckland. Certainly faster to get to the airport.
Waikato could be more resilient than other areas. It is obviously a very important Dairy and Horticulture area, was less exposed to tourism than other areas (with the exception of Matamata), is centrally located and has Tainui Holdings' Ruakura Superhub and the Sleepy Head bed factory on the way. House prices are high but not as silly as Auckland and Tauranga. As my user name suggests, I love living in the Waikato.
Yep, fast but pricey. How much will that return trip cost with petrol at $3+ plus the user charges that will be coming to fund the maintenance and renewals.
I'd prefer to see HM wh**ked, and what you deserve for that dumbo comment. Isnt it funny that he talks nonsense but is quick to criticize others. Very thin-skinned that one
Yes watched the Tauranga Harcourts auction last Thursday in a live stream it wasn't pretty, however you have to take on board that there is pretty much nothing going to auction now in the first place. One sold prior and two sold at auction with only about 10 houses total. Yes its hit a very sudden brick wall but there must be still buyers as I'm now going to open homes and there are plenty of people at nice houses. Its turned into a buyers market and sellers will just have to adjust to the new prices.
After decades of kicking the can down the road, is this the time the Auckland market takes a big hit? Low migration, increasing supply, tightening credit, higher interest rates and higher than normal inflation? The global macro economic and geo political set up this time around is different than past cycles so it will be interesting to see how it all unfolds. RBNZ and Government may have their hands tied on this one but I guess you never know.
It's going to take a decent hit for sure, how big the hit is is open to speculation.
I think it's likely to be between 10-20%, an outside chance of 25%.
Have you firmed up your views that the price fall will be more than 5-10% now which is what you were picking as most likely scenario? Not criticising, genuinely interested in your views as they seem less extreme than some others on here.
Low Migration?
I understand 20,000 net migration loss coming this year.
The majority of which will be average earning under 30s which would hardly be bidding up with the property market.
But if the swathe of 30s to 40s who never bought and are now on decent incomes finally get the opportunity maybe they will provide some sort of price floor.
Its the under 30s that rent from all the landlords so may be a few empty rooms on the cards
They also build / reno many of the overlordes humble abodes
Just putting this out there....
Might inflation surprise on the low side over the next few months?
As:
- Fuel tax slashed
- Public transport fares being halved
- Rents probably going to be flattish
- Construction costs rises potentially subsiding a little after last year's madness
Noting Transport and Housing are quite big chunks of the CPI basket.
How about food?
Inflation is going much higher by the end of the year. The Ukraine situation is yet to fully flow through the global system and China's recent lockdowns will also cause inflationary pressures. We may get a lull for a couple of months though before things go higher but inflation is definitely going higher.
It's going higher for sure, but how much higher? You say 'much higher' - fair enough, that's your opinion.
However don't you think the points I raised are valid - and if not, why?
I'd also add to the mix a very strong NZ dollar - surely that is some help for some if not all importers?
Inflation doesn't need to be "Much Higher" it only needs to keep on trucking at the current rate for months to come and we are in the shit. Its a "rate of change" figure and the longer its not close to zero the worse it becomes because its compounding as well. It needs to be reined in or in 6 to 12 months all hell will break loose.
What if the rate starts tracking more around 4% for the next couple of months, and then drops to circa 3% when demand is sucked out of the economy with another 50-100 BP rises in the OCR?
You don't see the potential for the RBNZ to pause by August, especially if unemployment starts rising significantly?
They will slow the speed of the rate hikes i would imagine. If inflation is still entrenched i dont see them reducing rates.
US CPI Feb data was 7.9% with a strong labour market.
We have yet to see peak inflation.
A bunch of flow through inflation still to come. as recent inreases in raw materials and imports don't instantly hit all the downstream businesses. I think 6 months of "have to put my prices up because of wage inflation amd supply costs" still to come. Then it settles. But 6 more months could push annual figure close to double figures.
Unemployment doesn't lift by August as net outflow of migration, return of tourism, backlog of construction work, central govt still throwing money around, e.g. 3 waters bribes, and current skill shortage soaks it up the downturn in residential construction. More like early next year before unemoyment turns in my opinion.
...also the April 1st 2022 minimum wage hikes will flow through to increased goods/services prices in the 2nd and following quarters.
The CPI will be whatever the government says it is, and if the measure needs changing again it will be changed so let's not kid ourselves it is any useful measure whatsoever. See "COVID Deaths" for a similar sham "statistic".
Having said that, I am happy to see this government trying real things to manage the impact on those that need it, this is something done for the good.
I've noticed Christchurch slowing considerably (albeit not as fast as many other parts of the country). Historically hasn't been much of an auction city (unlike Auckland), so hard to tell how 'representative' the auction results are for the whole market. Also, Christchurch has a massive off the plan market, and I have no idea how the various stats pick-up those (e.g. REINZ index), but a friend mentioned to me that prices on those have come back a bit (anecdote - take it for what it's worth).
Chch was undervalued for some time. Lots of -ve perception after the quake.
Don't see CHCH being as affected by the upcoming dip as much as the rest of the country.
Not surprised re tauranga, the bay and other coastal NI areas. Over pumped by marginal buyers from Auckland selling up and moving to the good life. Close enough to family in auck, but out of the big city.
True its pumped by Aucklanders leaving for down here for sure so the pricing is linked really. You get a better house than you probably had in Auckland and money left over for a couple of new cars. The next few months are going to be interesting for sure.
Shake your money maker??!
We live in auck. In my 40s, it's time for a bigger house for us. I've considered a move south multiple times.. Somewhere scenic, alpine.. Beachy?
Bigger house, money left over for a lot more than just the car too.
Think now we will just wait and see how the dust settles. Suspect there are more than a few people like us, previously looking, now just observing with interest...
Masterton ticks most of those, or Carterton.
No beach near Masterton, Castle point will blast the paint off your car. Otherwise Masterton is a good fit, the commute to Wellington for work would be about the same as most commutes in Auckland and your would be able to build a fantastic house on a large section for 50% of the proceeds of a sale in Auckland. Nice community as well.
Just don't expect the weather to hold for more that 20kms in any direction, Masterton exists in a true weather bubble, the weather south rhymes with fit house and the weather north for 100kms is not much better.
Yeah, Christchurch prices bucked the trend big time in the decade after the quake, whereas everywhere else followed the national trend (sooner or later, give or take). That's actually pretty weird in markets that are somewhat substitutes (alternative places to live) and should usually move together.
My theory is that initial bad quake vibes meant that very few people were deciding between (say) Auckland and Christchurch, so the normal co-movement in prices didn't happen. Now, with our short quake memories (and realising half of New Zealand is a natural hazard risk) people have been again seriously considered Christchurch, causing some alignment in price. But to me, that means Christchurch is a 'substitute' again and should now more closely follow price movements in other parts of NZ.
I know Christchurch is seen as undervalued, but it really is a completely different offering to Auckland (and even Wellington). Try getting a big head office, finance or government policy job in Christchurch. Way fewer options.
There has also been a massive amount of residential building going on here since the quakes. My extended bike commute home goes through Wigram, Prebbleton, Lincoln, Tai Tapu, Halswell, Westmoreland. There are entire new subdivisions still going in. The same is true North, West and further South (Rolleston) of the city.
I agree I think ChCh will escape the worst of this downturn, a lot of the housing stock is quite new and there are some constraints on intensification due to infrastructure.
Was in Chch over the summer holidays and there we a lot of houses/developments going in. If population growth stops...it could get hit just as hard as anywhere with oversupply.
Caught up with the in-laws the other evening (after finding out - as I commented last week - that they had borrowed against the house to buy an investment property).
They told me that the agent for the place they had purchased had informed them that now was a great time to buy, because with CCFA being modified people will flood back into the market, as well as with the border opening.
I felt like I was living that scene from the Big Short, where Steve Carrell's character and his team are going through the suburbs of Las Vegas, looking at the houses that are sitting forlorn while the real estate agent tells them they are in an "itsy bitsy gully" (or words to that effect).
So we’re not at the bit where the stripper didn’t realise her 5 mortgages wouldn’t continue at the teaser low interest rate yet huh?
Meh, maybe it will stick at 10% down the go bannanas again?
Lifes a Giant wheel...
Headline 'Son in law bails out in-laws'
Tearful son declares "I told em, I told em I tell ya, but they wouda listen!"
Might get me extra pudding at Sunday dinner! (although if they've over-extended themselves it might be beans on toast in the future)
People from Auckland running out of artificial cash?
Plink a plink...a plink. The music is stopping. Future tax payers are voting with their feet...right to Aussie. They simply cannot afford the banks new threshold to buy, and are over being exploited over their basic human need for shelter. Legacy specu tax avoiders are about to be left holding the can. Rising rates, no buyers and evaporating capital gain all the way to the inevitable margin call.
Kaaaarrkkk...
They might be in for a rude awakening upon stepping foot on Australian soil if they are thinking it is any better over there. There is a good reason why the current Australian government has tanked in the polls.
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