There was a slight lift in the number of residential properties auctioned by Barfoot & Thompson this week, but the number that sold remained achingly low.
Auckland's biggest real estate agency auctioned 75 residential properties last week (20-26 August) and sold 14 of them under the hammer, giving an overall sales rate of 19%.
That compares with the 67 properties auctioned the previous week and the overall sales rate of 27%.
The highest sales rate for the week was 29% for properties in Rodney, although that was from very low numbers. No sales were achieved at the auctions in Northland, Papakura or Franklin where the number of properties on offer was also very low.
Overall the market remains at a low ebb.
However spring is only a few days away, and that usually signals the start of a lift in real estate activity.
Vendors and agents will be hoping for a reasonable spring bounce and we won't have to wait long to see if their wish comes true or if they are left disappointed.
The table below shows the district-by-district results from Barfoot & Thompson's auctions last week, while details of the individual properties offered at all of the auctions monitored by interest.co.nz and the results achieved including selling prices of those that sold, are available on our Residential Auction Results page.
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82 Comments
14 sold in total! Only start of downturn house price’s will continue to fall just so overvalued compared to income,
J Powell just dropped a steaming pile of " it's FAAAKING BAD, soz markets, we are hiking bigly and longer" into Jackson's Hole, Wyoming.
This meeting of the central bank wonks will surely ignite mortgage rate hikes worldwide, over comming weeks!
If you have not sold out half your rental rat boxes they will poison your financial well!
+ Ditch big Debt......all money gets real expensive.....
Take care punters!
Property investors with > 50 properties might have to sell some.
Some little property empires are going to take a big hit and smart investors would have sold end of last year.
I'm Incorrect!
Vendors and agents will be hoping for a reasonable spring bounce
Very hopeful indeed. Unfortunately the current downturn will not be saved by a change in the weather, this is a response to some very loose fiscal policy and financial management and there is some ways to go yet.
The above mentioned had their fun during the last few years, now it's time to face the music.
Sales were on the decline in the first half of last year, as far as I remember, yet house prices increased.
Lack of good stats and only news to rely on. Economists are often paid by the banks, BNZ and Treasury officials are paid by the Government, and REINZ work for its members.
Monthly sales volume: https://www.interest.co.nz/charts/real-estate/volumes-sold-reinz
Snakes and property ladders.
Ladders have gone only snake’s left, property price’s down then down some more.
Not just any snakes, anacondas in particular
"Ladders give ... snakes take" Bon Scott (AC/DC) Sin City
If you stand under a ladder too long sooner or later your luck will change.
So the fed is on fire, which equates to water over the housing market..
The prophet was completely wrong.. looks more like 9% guaranteed
If the prophet hadn't been cancelled for. We would have learned that 9% was the revelation to be revealed in the scrolls.
Testify! All hail the mighty Prophet.
Those who scorned him, now bow their heads and seek sullen forgiveness and atonement for their wicked sins, for they know not what they did.
The Prophet forgives eternally.
Will the Prophet please rise again? as is foretold in the ancient text?
Someone had the audacity to terminate the Prophet..
Still no real bargains showing up in the auction results.
Zachary you have to wonder why any of the 14 buyers would purchase without large chunks off price, as the saying goes more money than sense.
May have sold their own house in the same market. We seriously considered selling ours and buying a cheaper one to get rid of some debt. Unfortunately the cheaper ones were almost unliveable.
NZ began its fiscal tightening before the USA. Yesterday Powell sealed the fate of our OCR in his speech at Jackson Hole. The Fed has committed to "causing pain" in households, softening the job market and has the appetite to weather a recession to tame inflation.
Orr has never been as committed, but now he will be. NZ has to prepare to endure a longer course of fiscal tightening than it would like. I can see 2 quarters of an OCR setting that is out of sink with our economic data and this will be very bad for the housing market. I expect to see a modest increase in the rate of fall until 2023 Q2 when we may see the Fed's commitment soften.
How this effects confidence and behaviour around property is unclear. I wouldn't be surprised to see a period of stagnation rather than a bounce in Q3.
The US can go a lot harder than we can without causing carnage.Their mortgages are fixed for the length of the loan.And their housing costs are less than ours.They also make up less of Americans overall asset holdings.
We will find it hard to keep up.And if we don't our dollar will fall and that will be just as bad with higher import costs.yikes
NZ is going to learn some hard lessons.double yikes
Look at the crime and pressure on society now.Imagine with 8-10 percent unemployment like 1990.
Still haven't read one article about what happens if interest rates go to 8,9,10 or more percent.
Our whole economic economy has been built on sand and no ones to think about what could be next.
Unimaginable to most.
There's no way the RBNZ will keep hiking the OCR if unemployment rises above 5-6% and / or house prices have fallen by more than 20-25%.
Rather, the NZD will be the sacrificial lamb.
And yes that means fuel prices will increase, but inflation in the domestic economy will be dead and buried so it won't matter than much.
I think they will do whatever it takes to get inflation back to 3%. My personal view is that they have already done enough to get us there, but if I’m wrong it’s quite possible we will see interest rates close to 10% which seemed totally inconceivable a year ago.
No chance.
I am happy to wager $1k with any one here that the OCR won’t go above 5%.
Well I won’t take that bet because I don’t think the RBNZ will need to go above 5%. But if they did get to 5% and inflation was still at 7% I reckon they would go higher. In fact they are effectively mandated too, the only reason they wouldn’t go higher is if the banks were about to fail.
How about their employment mandate???
I doubt high inflation is good for employment either.
ANZ are the most exposed to the residential housing markets in the flagging NZ and AU suburban heartlands. Just sayin.
Kiwibank look good right now?
Got to agree with you for once HM, the OCR rises will simply stop once the onset of pain starts. You will simply have to get used to paying more for anything that involves imported goods. Lets face it you can do without half of the crap that people spend money on, you really don't need that new phone when the old one is still working fine. Food prices will rise and people will have to quit going out to dinner, just about everyone can belt tighten to a greater or lesser extent.
Rates will go higher, this is FED narrative RBNZ will just follow if they do let NZD crash inflation will never go and we could go into hyper inflation at that point it just about surviving food will be only priority most of your day standing in queues also house price’s will still tumble and rate’s will go sky high. HouseMouse hope you are wrong about letting NZD crash this would be worst case scenario.
Want to wager?
want to bet your house on it?
What you’re describing sounds like the start of a depression. If inflation is high and unemployment is high, growth will be suppressed. Large parts of society won’t be able to afford to do anything/participate in the economy.
HM - you think the RBNZ will take unemployment more seriously than high inflation?
I didn’t say that at all, IO.
By May 2023 I think inflation will be back around the 3-4% mark. If unemployment is rising quickly above 5-6%, then yes I think they will put more weight on employment than inflation at 3-4%, especially if it’s closer to 3 than 4%.
It’s a harder call for them if inflation is above 4-5%, but I don’t think it will be.
Good points - sorry missed the ‘do’ for ‘do you think’ at the start of the first sentence. Wanted to understand your thinking, not imply what your thinking was.
They also have mortgage interest deductibility for owner occupiers.
Yes, the average US household should be able to stand higher rate increases that NZ, but the US has higher public debt (and only about a 6th of it is held by the FED), so that will get very expensive to service as rates go up. This could cap what the FED can raise by, but I think instead they will keep raising and the FED will continue exploding the money supply to bail out the govt so it can pay it's interest and blow trillions to douse social fires.
Then the CBDCs come along, and they inflate those to oblivion too. They are trapped.
Also higher rates will kill housing starts there.
Housing market is already on life support crashing NZD will not save it. RBNZ will just follow FED .
I'm talking about the USA.
There are so many moving parts when trying to predict things at the moment.
i think there will be many in nz waiting out until the adjusted lending rules come into effect in March.
I don’t think the next year is hard to predict at all.
Although a black swan is always a possibility to scuttle predictions.
Yeah there are a few black Swans that scare me, so will predict them now so they don't happen:
Volcano ash reduces food supply
Asteroid, and Bruce Willis fails to body block it
Big chunk of Antarctica suddenly goes for a swim, pushing up sea levels
Ocean acidification hits disasterous levels and ocean carbon soak is curtains
Taiwan biffed
Rogue nuke triggers nuke exchange
National wins election
Labour wins election
Middleast biffo triggers mega oil prices and mass unemployment
Concentration of microplastics in humans makes us sterile
I think I can handle most other calamities
haha
How about a Zombie Apocalypse?
by Caughtinthemiddle | 27th Aug 22, 8:39am
NZ began its fiscal tightening before the USA. Yesterday Powell sealed the fate of our OCR
That's monetary tightening, not fiscal (which relates to government policies)
Thank you Yvil - I now know more today than I did yesterday. Winner!
I think the agents head offices should come out and say they will only auction with a publicly stated reserve and will only list properties with a price.Otherwise too much time and overhead will be wasted.At these sales rates they will need to start thinking about cutting their cloth.
Imagine buying a car if everything was by negotiation...ffs
Auction is often just the first stage off the marketing process. It's by no means the end of the world when you fail to sell by auction, you just move on to other methods. The extra cost of trying to sell via auction is about a thousand dollars.
Zachary
Your theory just sounds like typical real estate fairy land never never thinking.
Lets put it another way for you.
Imagine you are Peter Thompson.You have 84 offices with twelve staff each in Auckland.Each office needs the rent paid and mortgage serviced.It also needs the base salaries paid and office overheads as well.
Now sales fall by a third.So revenue falls by a third.
And then sales values fall 20%.So revenue falls another 20%.
The property management side of the business slows up as well.You lose another five percent of revenue.
Now tell me.Do you keep those 12 sales staff on in each office...or do you reduce the number of offices and staff as well.
Or do hope all will be well and continue to employ staff, pay rent to have a massive team of people flogging a growing list of properties at prices twice what a typical kiwi could afford.
Good luck with that.
I don't disagree that what you have said happened in the past.But don't be surprised if the agent doesn't answer the phone next time you call.And don't be surprised when you do get hold of an agent that still works there that the conversation is a little more sobering about what they "will" do to get a sale, and little less about getting a great price.And don't be surprised to hear about what they "won't" do now.
The game has changed from one of profit to one of survival for many.
Way back in the 70's and 80's when there were more houses for sale than agents you went to the agent in the area you liked and told him how much you could afford to spend. You got in the agents car and they drove you around the four or five houses. No auctions no BS.
I remember doing that in the late 90s.
Yeah I remember that - now the buyer has to do all the work themselves, while agents just do ‘open homes’ Personally I prefer the greater transparency of the current way. However, commissions are still mostly outrageously high.
Those once teeming Open Homes were unreal for shoe enthusiasts.
If everyone put a price on their house we could dispense with agents. How much would that save the public in one year?
Greater transparency of the current way? Surely you mean the greater transparency of the older days? When you know, every single house had a price on it?
Ray is ready for the coming downleg, as a "cents in the dollar buyer" when the market storm/blood is neck high!
https://markets.businessinsider.com/news/stocks/stock-market-outlook-br…
Any guesses on the number of revised property market predictions being typed up over the weekend by “senior economists”?
Four?
Like Xing's fortune cookies, there is a prediction for every contingency.
Message from my Cousin in the UK, energy costs have gone up 80% with another rise coming January. The average household over there could be facing gas and electricity charges approaching NZD$10K a year. Just imagine an $800 a month bill here just for heating and to keep the lights on.
Yeah, that would be breaking point for a bunch of households on the margin. Enter stage left govt subsidies:
Government energy discount will be paid in six instalments from October 2022 - Which? News
I pay $200/month for a frugal family of 4. I could survive an increase to 800 until the car shat itself and then be out of options.
Was talking to friends who live down south. They’ve had $700 monthly power bills this winter to warm their homes (not just one person, but multiple people…one $600, one $700, one $800!!). Although they say it’s been a particularly cold winter. Sounds like you need to have a heat pump running at 20deg all day/night with outside temps of near zero to achieve this.
But what you mention above is already happening here in NZ for some the last 3-4 months. Doubt it will continue on much longer as daily temps are on the rise around the country.
Sounds tough, maybe they need to turn the spa pool and the sauna off and rough it for a bit.
Double glazing and insulation start to become very good investments at those prices surely. We have good insulation and double glazing and ducted heat pump and our winter power bill is only $70 more than summer, that is with the whole 4 brm house heated to 21 degrees all night. Sure that is in Auckland but I doubt it would be that much different down south.
laws of thermodynamics might be working against you Jimbo
I have actually found it easier to heat the home than to cool it in summer. Just made some alterations and have replaced the attic hatch in the hot water cupboard with a 450mm extraction fan. This uses only 230W and can move 80 cubic meters of air a minute so that's basically a full evac of the air in the house every 5 minutes into the attic which pumps out the trapped air up there which must hit 60C in the summer because left long enough the cold water in the kitchen tap almost burns your hand to start with. The single 5.8kW heatpump I have simply cannot cope in the summer. Outside temps of zero or less would be nasty however, the lowest I see down here is about 6 Deg.C so 18-20 inside is doable on a single heatpump.
Our two year old townhouse is similar. Wonderfully warm in winter, hardly ever have to use the heat pump, but is often far too hot in summer, and we use the air con a lot
Supply, demand, interest rates, overall economy. Try and find a positive from those four factors that suggest our house prices represent any kind of value. A fall is not just obvious, it is necessary. Whack on DTIs as soon as we get down by 30% and keep them there.
That's what the RBNZ and Govt are working towards I believe, just as the Irish did after their own crash played out during 6 years.
Will it be a DTI of 3.5 to 6.5? Lower the better for NZs longterm future.
Our 4yr old house is 30% down already going by QV estimate.
Agreed. If I was a FHBer I would wait until DTi is announced. Speuvestors are being forced onto new builds for better tax rinse. All those old houses they hold are about to get a lot cheaper.
Popcorn.
what's the dti got to do with it?
a house is worth what it yields when rented out....net
and in a competitive market that means it needs to compete with other investments...net
take away the ponzi scheme frenzy and what do you have
an investment that needs 'topping up $15k" a year
what's that worth?
How investor's monthly loan repayments went from $2000 to $8700
Ryan said he had expected interest rates to stay low for a considerable time, and all signs seemed to be pointing that way.
“A year ago I could easily have locked in for maybe 2.49% or 2.5% for two years.”
“Categorically, I am the first to say I got it 100% wrong, but then again I know people I would say are very astute of swap rates and interest rates, and they all got it wrong as well.”
He said many had made the same bet he had, which would likely leave them struggling.
https://www.stuff.co.nz/business/129705290/how-investors-monthly-loan-r…
anyone want to do this guys numbers....back of an envelope he's looking for $50k a year he doesn't have
ouch
In my experience economic predications aren't particularly accurate. Nobody knows for sure when interest rates will peak and at what level. What we do know is draconian Covid measures have ruined the global economic machine. High interest rates might lower the demand side of the equation, but might also hinder the supply side. When policy writers and politicians are all academics, lookout!
Big drops in homes to rent. I wonder why. What I do know is that it is a leading stat of housing activity
Not to worry. Lots of new built to rent while avoiding tax coming to market. Unless it's the Chinese model of build to never rent, with a bank collapse in the near future.
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