There was a surprising lift in activity at the latest residential property auctions which meant the auction rooms finished the summer season on a bit of a high note.
Over the last week of March (25-31), interest.co.nz monitored 294 residential property auctions around the country, a reasonable increase from 237 the previous week, bringing an end to several weeks of slow but steady declines in the number of properties going under the hammer each week.
Of the 294 properties on offer at the latest auctions, 98 sold under the hammer, giving an overall sales rate of 33% which was almost unchanged from 35% the previous week.
The sales rate has remained remarkably steady at around a third for several weeks.
However there was slight decrease in the ratio of sold properties reaching their rating valuations, with 29% of sales achieving prices that were equal to or higher than their rating valuations at the latest auctions, down from 32% the previous week.
Details of the individual properties offered at all of the auctions monitored by interest.co.nz, including the prices achieved on those that sold, are available on our Residential Auction Results page.
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104 Comments
Those who bought over summer won’t regret it.
TTP
Did you? Or are you still renting in PN
You're lucky renting in PN. My granny told me about Malcolm, aged 50, living in a friends garage in Tauranga. The temperature fluctuates from scorching to freezing in the garage. He's tried motor camps, backpackers lodges and motels. The irony is he doesn't own a car
Rents in Tauranga jumped 9 percent over 12 months and 33 percent over 4 years.
Are you for real? April fool - I get it - lol! Could Malcom return to live in the Retirement Home with Gam Gams?
No its no joke
Where's the aspirational, inspirational, transformational ardern who promised to end poverty and homelessness.
Bay of Plenty rentals: Locals living in cars, garages, motorhomes
https://www.nzherald.co.nz/bay-of-plenty-times/news/bay-of-plenty-renta…
All three of them.
...for the first 3 me months
WTF that is a April fool's!🤣.
Looking at the prices they are paying now v summer period tells me they will regret it .
The prices will fall more as inflation rises along with unemployment, COL, NZD value/ imports, and many other factors.
... those buying now will regret it too.
Lol Auckland over RV is under 20% (13 or 14 out of 73). Must be a new low
Its a buyers market, more sellers lined up than buyers. Someone said yesterday that 95 percent of loan applications are declined, 5 percent approved. If that is correct, it means the 'want to buy' pool is 20 times larger
That suggests we have a price problem then. All that needs to happen to get the market going is for prices to drop to the right level
Amazing the number of people who don't understand that.
Its amazing the number of people who don't want to...
How is your property search Nellbell, if you dont mind sharing
It’s promising for a buyer. Listings are very high and unlike any time in the past two years there are plenty of good quality homes on large sites available. Asking prices are still high but multiple agents have confirmed that prices (for those sold) have dropped considerably, is hard to understand this as nothing is declared at present on websites - all are price “TBC”. One agent told me this week that “ REINZ data shows that prices in the area have now dropped 28%, so are now back to precovid”. List prices aren’t there yet ( probably because the vendors are hoping for that crazy buyer who will pay a ridiculous price)and I don’t have the energy to talk price with anyone just yet, we will keep half an eye on the market but don’t think we will buy for some time yet, you know I have some serious FOOP. You can really feel a change here a second agent told us recently “buyers have all gone now”, at one of the open homes we went to, where we were the only ones there.
If you are in a position to buy dont wait too long. In Oz the national house price has risen consecutively for the last 2 months. Only down 5.1pct from the peak. Those waiting in the wings will be drawn in
Sydney 1452,000 (nearly 1.5million median!!)
Melbourne 1051,000
Figures exclude unit prices
Haha, no Sydney and Melbourne don’t worry me at all. I look at house price in the context of affordability; wages and salaries are very high in the big Aussie cities compared to where I live, the properties are likely a lot more desirable too… all that harbour view would be so nice.
No I am happy to sit on the sidelines until the very bloated stack of housing stock reduces a bit… all that’s happening at the moment is that more and more good quality properties are being added to it.
Asking prices are still high but multiple agents have confirmed that prices (for those sold) have dropped considerably...... [Nellbell - above]
Hi Nellbell,
When you ask "multiple agents" then, inevitably, they respond with multiple lies.
TTP
ilk thrown under the bus....
That suggests we have a price problem then.
Or a funding problem.
When people can't afford something, either the price comes down, or less of something gets sold, and no one's making any more new ones.
The prices generally only drop big time when no one wants to live somewhere anymore. Think Detroit, rural Japan, or decent chunks of aging Europe.
We're heading more towards mimicking Ireland. Less new houses, less FHBs, and a rental squeeze.
Funding problem? Sure, but not in the way you think it is. If DTI was put in place and mortgage payments limited to around 33% of household incomes like in most other developed countries, funding would shrink even more. Back to factor n°1: prices.
Please show me a place where they have instituted the methods you have listed and it's resulted in a significant decrease in pricing and a higher uptake of home ownership and building.
Houses are and will be expensive items to produce in NZ for the short and medium term. Expecting the costs to drop significantly because there's less people who can afford to buy them sits in the realm of magical thinking.
Has the price of eggs dropped because they've become more expensive and people's pockets are feeling the squeeze?
You're confusing 2 different things.
Eggs get produced and consumed a lot, once they are eaten no-one else can eat them, including the person that bought the eggs who now needs to buy more eggs.
Most of the housing stock required in New Zealand is already built. Sure, some will need upgrading and more will be added but the bulk of it is already there, it just changes hands. If there is less available money in the economy then each time the houses change hands the prices will go down.
The cost of an existing house correlates with the new replacement cost. The new replacement cost isn't going to magically drop to the floor because people can't afford them.
Assuming there is more demand for houses than there is housing in existence, you are unlikely to see existing house prices fall very much. Prices only fall substantially when there are far more houses than there are occupants.
The new replacement cost isn't going to magically drop to the floor because people can't afford them
Isn't this exactly what the market economy is supposed to do? People can't afford to buy your development - you drop the price so for the next one you'll pay less for land, architects, materials, workforce and pocket less profits. And the upstream indutries will take similar cascading hits
If someone has already done a development they may need to offload some at or under cost.
But there is a pretty firm floor for lowering costs on a like for like basis for housing, so future houses, just won't get built if people can't afford them. You would have to see a substantive change in the nature and size of house building for prices to drop in any meaningful way.
Again, using Ireland, they have implemented all the mechanisms people think will make housing cheaper, but new house building has declined around 70% since doing so, and the rest of their houses have just gotten more expensive. House builders just won't want to operate in such a market.
Maybe we need to look seriously at what and how we build here… very seriously. I also think the margins on developers and builders will need to shrink. There have been some serious “ super profits” out there for many years….. these profits don’t come from nowhere, they come from the families that buy the houses. Property needs to stop being the big earner industry and return to builders making houses for people. No matter what way you look at it… DTI, overseas comparisons etc our houses are overpriced.
Councils dont let the industry be run by builders. The good ole days saw smaller guys doing spec homes, and the larger group home builders, Neil, universal, Keith hay homes pushing out fairly basic houses on large sections. A lot of houses were part built, and the homeowner would finish the inside, the landscaping and accessway.
Now its mandated that everything is completed before council sign off and a house can be occupied. The consenting process is intense and beyond most chippies who are very hands on. Building permits had notes to say things like "builder to check onsite". Thats not allowed and the plans are very detailed.
Oz on the other hand is still more relaxed.
House building margins are already super low though - for many this has been a profit-less building boom.
I know how it all works fairly well, if a builder halved their margin on a $600k house build, it'd drop the price to about $585k.
Our houses are more expensive other places, but their price is fairly relevant.
I’m sure that’s right for many, especially the group builders, our experience is that they have good buying power and keep prices constant where they can.
It’s small and medium builders we had problems with.
We got the same plan for a large house costed with a couple of building companies ( one big group builder, one smaller company). In an attempt to understand our pricing we got as small a breakdown as we could ( they would only go down to about 5 or six line items). There was a very obvious loading on prep and foundation work from one - $130,000 - over and above what anyone else could understand ( my nephew owns a building company in Christchurch, he reviewed it for us), We had asked many times for this to be explained and they couldn’t. It was just an extra loading, I think some extra profit for the builder - in my nephews words…”the cheeky bugger is putting that in his back pocket”.
During the height of the frenzied prices this builder was constantly discussing with us what things were selling for locally - I found this odd as I thought they should have been focused on the costs of what it takes to build. I think building prices in our area started to move initially because “cost to build” and “value on the market” were moving apart as house prices rose very rapidly. Then everyone got on the bandwagon and everything started to rise; people like us just opted out of building as an option.
The large companies are buying dozens of sections at a time and clipping the ticket on the land part of a house and land package - effectively subsidising the cost of the builds. Overall a good private builder can build a home more efficiently than the group home guys, they might pay 10% more or so for materials, but they're usually twice as fast putting it together.
The guy with the big charges in your anecdote didn't want the work. So maybe his charges might come down in future if his work dries up, but the cheaper quotes you got probably don't have much room to move.
That's probably because there are price setters earlier on down the chain. E.g. Councils, Landowners, Building Materials manufacturers are all taking the bigger slice of the house price inflation pie, with builders making crumbs at the end. I reckon there's heaps of savings to be found in supply chain.
"Oh but Mitre 10 only makes 10% GP on each sheet of GIB they sell!!" Yeah, and then at the end of the year M10 head office gets a massive rebate from Winstone Wallboards.
You reckon heaps of savings.
I reckon if I sourced my materials instead of my builders, I'd waste quite a bit of time and maybe save a couple of grand over an entire house build. And probably buy a few subpar/wrong items.
But yes to your first comment, there is a large amount of non construction agents charging significant amounts of money as part of the new house generation. Many of those costs are only going to increase.
We built 2 new family architect design homes in the last decade on labour only contracts. Pricing worked out at roughly a third each for builder, materials and 3rd party contractors (sparky, plumber, kitchen, plasterer, tiler, windows, scaffold, roofer etc.) I did the painting myself.
So, the first saving is the working capital charge if the builder puts the materials & 3rd partys on his books (7% from memory). At say 2 thirds of $750k = 500k x0.07 = $35k. Plus any materials management margin the builder might like to add. There are also savings from using your own 3rd partys, getting quotes - all depends on the state of the building market on the first house in 2012 people were lining up to do the work.
For the 1st house we had materials quoted by Bunning's Placemakers & M10 & compared with builders price. Placemakers refused to discount back to the builders price (because "we protect our builders") so we then took everything to Bunning's for a price match & after that experience then used our Bunnings Trade account for the 2nd house.
Overall we considered that we saved $100k each time (2012 &2019).
It does take time & I'd say is a fulltime job until the house is weathertight. For the 1st house my wife had just been made redundant so was project manager, i had retired when the 2nd one came up so did that.
Key is finding the right builder who'll accept labour only (we had mutual trust for the 2nd house) & we paid them & the subbies immediately on invoice.
Yeah you can obviously save a lot more if you're prepared to expend a significant amount of energy yourself.
The variables become your abilities in making this happen, what you'd earn working whatever your specialisation is instead, and the overall quality of your subtrades to work in with each other - often tradies will want to steer clear of owner run projects because generally they're more of a headache.
From experience most of the time this usually becomes a marginal proposition.
There's loads of time people sell stock at a loss, it's really common. Amazon's a classic, it's highly price competitive, if you can't sell your stock because competition is selling cheaper, you have to eventually sell cheaper or liquidate. If you don't sell and you still hold on to stock you still have costs, like marketing costs, warehouse costs, software costs and the list goes on. Your better off getting what you can or else eventually you will go under.
Lenders are concerned that more substantial losses on real estate are coming. What's the purpose in expanding an already growing pool of underwater loans? Those involved would live to regret it and heads would roll.
I think leaders are more concerned that their citizens are getting relatively poorer, and for that to improve, theyre then going to have to contend with a poked economy. Oh and Europe not descending into a thermonuclear wasteland.
They really couldn't give two shits about people's asset values, unless everything (and I mean everything) starts heading to zero. But you just keep sitting their in your property ponzi myopia.
"They really couldn't give two shits about people's asset values"
Lenders will be concerned about the value of their security. Tanking house values aside, what triggered the current banking crisis was the value of bonds to which the invested their deposits had tanked - not to mention the unrealized losses. Were you referring to Leaders or Lenders? The former would not want house values to tank either. In this instance they may find that most background drivers are beyond their control...
How was your coco-pop
Why $17 Billion in Credit Suisse ‘CoCos’ Bonds Got Wiped Out After UBS Takeover - Bloomberg
https://www.bloomberg.com/news/articles/2023-03-18/why-credit-suisse-co…
by HW2 | 1st Apr 23, 10:17am
Did you enjoy your coco-pop - Am I about to lose all my term deposits too - UM NO. - lol! Plus I don't own any bonds or shares. Thanks for the update.
Am glad to be of service Pops
You'll find that by keeping it in context sometimes helps too :)
Not yet. Unemployment is about to boom 💥
is about to
Hi IT GUY. You're transparent
HW2
Yeah, it was Starrider who claimed that 95% of loan applications were being rejected by a "big red bank".
As he was so specific, I asked him what his source of the data was as I haven't seen this data published before and don't think that a bank would release such information.
I haven't had a response from him/her so I am thinking Starrider may be - as his name suggests - be in dreamworld up amongst the stars quoting such as being fact.
However, yeah, I have no doubt there are plenty of FHB that don't meet bank leading criteria . . . and yes, as you suggest, by inference there are sadly many out there who would like to buy but can't.
Hopefully prices and interest rates will become more favourable for potential FHB in the future and they on get on with life.
Hi Printer. Possibly if a big enough chunk of those 95 percenters get approved, prices will be up and riding the stars again 😇
Quoting the Donald "Its a beautiful thing"
Isn't it funny that he has been indicted overnight (Donald wrote that he had been INDICATED lol) and yet no one has discussed it here
You're getting seriously desperate with your spruiker comments. So now we're counting people who would like to buy a house but can't afford it as the metric for determining that the market is about to turn. 🤡
Yep I want to buy that $32M mansion on it's own private island but the bank will not lend. As soon as they do we'll see the market pick up.
These wild "pent up" demand theories belong in Nov-2021.
At the moment volume levels are below trend, so it stands to reason
And what is your answer to the problem of 20 keen buyers who have gone to the lengths of making an applcation to ask for money and only 1 is approved. Maybe dont worry answering if you gonna make up unrealistic scenarios
PS "riding the stars" was only a take on stariders avatar name. Dont get stressed about it
The 20 "keen buyers" are not buyers they are "keen borrowers" actually more likely to be "reluctant borrowers". The haven't clocked on that the free credit line has dried up yet.
April fool?
To whom are you referring?😝
Those of us who work ! ... today 1400 000 Kiwis get a generous boost to their benefits and entitlements , and the rest of us get to pay for it : thanks for nothing , Robbo ...
Yeah curse those superannuitants (the largest beneficiaries of our social welfare system) leaching off my hard earned tax dollars….
... no ... curse that prize fool Robbo ... who doesn't get it that he's stoking inflation ....
Bless the superanniuts ... keeping Ryman ticking over ... sweeeeet ....
Leaching ?... Most of them worked hard and payed Taxes...
The leaches are the ones that went from Parents " social welfare nipple" ( house and benefits) to the dole, then the motel, and now the free house..
All payed for by the middle class private sector tax payers.
Name a government department that makes money other than the IRD ! . They all are over capitalised cost centres full of zombies.
ACC
"Most of them worked hard and payed Taxes..."
Nope, most of them worked hard but didn't pay enough taxes, instead they borrowed and expected future generations to pick up the tab.
We paid for our parents pensions as they paid for our grandparents. Hope your kids feel the same way about you.
You have a handful or more of rentals, why do you need the govt to give you more money.
Yes everyone, I realise that's probably shocked the pants off you, me saying that
If you're referring to another comment of mine referencing 30 years ago, I advise that we sold all our investment property over 10 years ago. We were sick of providing nice warm homes for ungrateful & malicious tenants so put the money into a new home to improve our our own lifestyle.
The really shocking thing is that having worked more than fulltime (usually 3 jobs concurrently) & paid taxes from 15yo without ever receiving any govt assistance at all I will need to get Super to about 120 years old to come out even. I'll do my best ;)
"without ever receiving any govt assistance at all"
The government has provided the stable institutions that have allowed you to work and thrive
Successive Govts have wasted more of other peoples money on theirl vanity ideology projects and institutions creating dependent voting constituencies than supporting independence.
"We paid for our parents pensions" no you borrowed to pay for your parents pensions and used up all the cheap energy on the process.
Is that the future generation that inherits thier parents wealth!🙄
They also sweated Blood to build the things this generation of takers take for granted.
You mean the taxes that disappeared when the top marginal tax rate was dropped from 66% to 33% in 1989? Convenient timing too, when many of these "hard workers" were entering the prime earnings stage of their working career.
- $20k p.a. is what the pension pays each partner after tax. Average life expectancy 82. 17 years on pension x $20k = $340k
- Median wage in NZ = $62k. PAYE = $12k. It'll take nearly 30 years of entire PAYE to fund this.
- Sure, taxes come from other places, but your claim is work hard + pay taxes = entitlement. It's not a loyalty scheme....
A person goes to work and earns 50,000 (1000pw), gives 16,000 income tax to the tax man. The remaining, 34,000 to the landlord.
The landlord can only deduct 4,000 and not any mortgage interest. Pays the tax man another 10,000
The govt received 26,000 to hand to those who dont and wont work while the workers and risk-takers get bugger all.
Nice isnt it
PS: Simplified example for the April fools
A friend was telling me the other day, her neighbor/mate is a "solo mother" of 2 kids, still more than capable of working. Receives $1100 per week in the hand before child support payments. Meanwhile I hear stories of people with real disabilities, you know wheelchairs and stuff, struggling to find a job let alone the money to heat the house.
I guess it demonstrates that children have the potential to be good little income earners in this country.
The country wants to maintain a birth rate for continuity, so they will incentivise childbirth.
Money for people with disabilities is about compassion and personal comfort, so is of less of a priority and funded accordingly.
Sure. But $1100 per week in the hand is more than my wife makes as an Early Childhood teacher. So we encourage bottom feeders to breed, and then struggle to invest in education to prevent these scrotes from growing up into ram raiders.
A white sith male comment, but one I agree with.
A bit of advice, teach your kids the love of work, learning and output as soon as possible before they too hear those solo mum and beneficiary stories
At 7% interest rates, half a million in debt is a lot of money. I got to check with clothing stores about the sales of socks and undergarments. I am very sure they are not selling as people are either not wearing them or wear same one everyday to save money and be able to pay the mortgage. 😁😁😁
Got it , a jump in not selling activity.....
2023. The year to buy. Prices rising in 2024.
Ok, guess you are BuyHighTryingToSell prodigy of BuyLowSellHigh
Almost a third of first home buyers have less than a 20% deposit | interest.co.nz - 25 Feb 2023
https://www.interest.co.nz/property/120066/almost-third-first-home-buye…
Pretty interesting stuff.
Back in the day (30 years ago in a tough market), it used to be the real trick to buy with no deposit through various arrangements of unregistered vendor financing loans. My wife and I bought 3 or 4 investment properties like this.
I wonder whether the glut of inner city apartment builds sitting in eg ChCh might need a nudge like that to move them. And whether it's even still legal/breaching some new bank rules
Depends on the interest rate and repayment terms.
A vendor who's finance is unreg is really asking for it.
Good to hear it worked out for you
I'm surprised it's only 1/3. Pretty hard to save hundreds of thousands of dollars while rents are more than many peoples take home pay.
I'm not. Of the recent FHBs I know, there are about four who I know well enough to be comfortable with discussing our finances. One had his mum extend her mortgage by 180k to lend him the deposit, and two had gifts from parents to the tune of 150 - 200k. Only one of them saved up the deposit themself (though lived at home while paying a token amount of board), and it took them from the age 18 through to 26 or so.
Spoilt brats!..
Mum I want ,....
i disagree Shaft. If you can and it will not affect your retirement you are better off helping your children into housing before you die and leave them the inheritance. i have done it and generously and my wife and I enjoy seeing our children, their partners and our grandchildren in a housing position where only one in each family has to work. We are all better off. By the way both my children are professionals after attending university. My generation and X have certainly made it harder for Y to get ahead housing wise. The word :"greed" comes to mind.
And what do the kids learn?
Easy come easy go.?
It’s nice of you and I am sure your children are appreciative.
The thing is, if we had a functional economic system then young people wouldn’t have to rely on their parents. Hard working young people on lower-middle or middle incomes would be able to buy without parents’ help.
How about all the good, hard working young people on middle or lower-middle incomes who can’t rely on their parents’ help? Is it just ‘too bad’ for them? Have we truly become a neo-feudal country?
Of course, we have.
As I see it we have more than what we need so why would we not help them before my wife and I are both dead. Both my children studied and got very useful degrees. They both contributed to where they are housing wise. Only one in each family has to work as their housing debt is very low with our help. Less stress and happy grandkids. As I said everyone is a winner including my wife and myself.
That’s good.
Could they have bought without your help? Maybe, but things would be much tighter money-wise for them? Both parents would have had to work?
They both had first homes. We helped them both to upgrade.
Was it interest free loan or gift
I don’t know if it’s surprising. Think about it - with interest rates much higher now, many FHBs will need a larger deposit to be able to service the mortgage.
Eg. A 10% deposit on a 800k home, leaves a mortgage of 720k, on a 30 year mortgage at 7% is a weekly payment of around $1100. That’s a very high weekly payment. And when stress tested at 9%, it’s circa $1300 pw.
But with a 20% payment the weekly payment is a slightly more manageable $980
FHBs with less than 20% deposits will need high incomes, or be buying 1 bedroom flats.
so the low numbers with less than 20% is easily explained and not surprising
April fools?
The Greens will save us
Marama apologised to all white males
We miss Jacinda
Tova was before her time
House prices are rising.
There is a housing shortage
Jenny Shipley was our best PM
Inflation will fall this year....
Classic example of how the COVID " blimp" in CVs has screwed the the prices of houses, the REAs / owners expectations and the buyers depression...
Note the CV details from the last CV to the previous CV... A $500 rise from 800k to 1.3M. it's crazy.
This house was passed in at auction.
It's worth between 803k and 1.3M.
it will not sell at 1.3M unless some wealthy near death old person needs it!?... Even then why would ya
https://www.trademe.co.nz/a/property/residential/sale/northland/whangar…
Yes and need to careful about knowing when the CV were done. Christchurch, Central Otago and Taranaki all had them updated last year. Gisborne CVs were done in 2020. Most of the rest are 2021
Whatever happened to the extra 90 mortgagee sales that JamesM told us would swell the numbers. Was it real or was it hype and fear?
The unsold total has fallen back to mid 30s
We are overdue for a dead cat bounce. Prices have dropped significantly, but the sh*t hasn't really hit the fan yet, so the pent up demand is poised to strike.
The fact that it hasn't happened yet, even during the traditional peak selling period is rather telling.
No it's not, because interest rates, and shrunk incomes due to inflation. People aren't making any serious moves unless they have a really compelling reason.
I'd be pretty surprised if there was any upwards pricing move this year, unless things in the broader world pivoted.
We are just about to sell and buy in the same market. Prices are dropping continually according to the agents.. so need to peg the sell and buy price both to a similar % under the rv/perceived value.
As long as both parties understand the market it will work.
https://aucklandpropertyrealitycheck.substack.com/p/auckland-property-statistics-for-932
This guy needs an award for surfacing this information
Dont you realise how real estate agents work to make their commission. I can see you walking into something
Later after you've signed the listing agreement the pressure really comes on, if they can't pull in a buyer
I think the only safe way to do this is to buy conditionally based on the sale of your house at a sale price that is pegged to your purchase price….. buyers want cash deals though.
To contract new debts is not the way to pay old ones.
Prices printed lower in March, but by how many % this month?
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