The latest residential property auctions monitored by interest.co.nz saw a jump in activity after a couple of weeks of fairly subdued results.
There were 224 properties offered at the latest auctions (22-28 July), up from 157 the previous week.
And there was also a significant improvement in the sales rate, with 115 selling under the hammer, taking sales to just above the halfway mark (51%). That was a substantial improvement on the previous week's sales rate of 37%.
The stars of the show at the latest auctions were undoubtedly the Manukau properties in Auckland, with 77 properties on offer and 55 sold under the hammer, giving a sales rate of 71%.
Things also picked up in the Canterbury auction rooms where the overall sales rate was 47%, which was a substantial improvement on the previous couple of weeks.
However the results weren't so shiny in Central Otago where a handful of properties in Wanaka were put up for auction but none sold under the the hammer.
Details of the individual properties offered at all of the auctions monitored by interest.co.nz, including the selling prices and rating valuations of those that sold, are available on our Residential Auction Results page.
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100 Comments
The Greed is Slowly Conceding to Reality !
Yes, those who have been around for a while will know that episodes of fear follow that of extreme greed. We've certainly witnessed the greed. Over a short time and as reality sets in, people will naturally want to be released from their overleveraged positions, its quite understandable. Its only just beginning to play out now.
To use the words of Olly Newland - "There will be tears"
To use the Words of The Prophet. " The Pendulum Always Swings ! "
To use the words of sensible commentators...the market has bottomed out, buy this year, 5-10% price rises in 2024...
Harvey, you're a true soldier:)
TA is the true loyal soldier, he hasn’t stopped pumping the ponzi for a minute!
How many have you bought this year or going to buy? Be sensible and keep buying..
I'm aiming to buy my second house soon, before the end of the year, got to beat the market!
Why do you need two?
Greed perhaps?
Harvey wants to get wealthy... for the reds the greens and browns to take it back
Altruism perhaps. Doing my bit to provide accommodation for the under privileged, as well as those with the means, but not the guts to buy a house...
I doubt the greens reds and browns will agree with that. You carry all the risk. Unless the rental market gets really short and stressed, then you might be seen as saviour.
You might as well cosy up to each other and have this chat..
by Harvey W | 30th Jul 23, 8:52am - "Doing my bit to provide accommodation for the under privileged"
ROFL! - Now all renters are apparently "under privileged". Sadly Harvey, knowing the motivation behind your intended purchase in the first instance (projected capital gains) it's telling of what kind of Landlord you will be when/if it does not pan out your way.
As it stands, Landlords have a poor enough reputation without you adding to it. Best you don't judge others on their financial status because you could be forced into being humbled yourself. Leveraged Landlord alert!
The problem is when this want to be "altruistic" becomes so widespread it distorts the market and manufactures a crisis, turning more and more households into renters.
If we didn't have swathes of people doing the work of Jesus by leveraging equity, taking out interest only personal loans and then claiming that as a business tax write off, then we'd probably find house prices at a more sustainable level determined by real cash deposits.
I was kidding. Of course it's not altruism. I'm just trying to do the best I can with what I've got, within the law of the land, and it happens to be a very good time to buy a house, and yes it will go up in value next year.
As it happens some people will always think it's a right time to buy a house. Right now, paying net interest @ 7-8% along with rates, insurance and maintenance is better than paying rent - right? Now, here's the juicy bit that makes it all worth while. Those imminent and inevitable capital gains that exceed inflation are deposited monthly straight into your bank account by Homes.co.nz. You just can't lose!
Seriously though, I respect that you want to make the most of what you've got and that you obviously suffer from FOMO. I sincerely hope it works out for you.
BTW Harvey, when I previously asked what verifiable factors supported your conclusion of imminent house price rises, your reply was "guesswork"
Is this still the case?
You could call it guesswork, or not, but the reasons are:
Inflation is the devaluing of cash, so all things being equal then house prices should be rising at 6-7% just to tread water
House are now under the cost of replacement, how will that be resolved without prices rising?
Cost of construction is not likely to drop - every single thing successive governments do makes both subdividing sections and constructing dwellings more expensive.
Seriously, 2023 will be looked back on as a good time to buy.
I'm sure all inputs into building a house have plenty of wiggle room. We have an oligopolistic building materials industry, where the number one means of paying for this product quadrupled in spending power over the last 10 - 15 years (mortgages). Yet the "cost" of construction is not likely to drop when interest rates head the other way?
Sure, the costs might be sticky but if demand dries up they will drop. I'm an estimator for a manufacturer to the civil infrastructure game, when times are good we make a killing and at the moment we're pricing to make no money (only our recoveries at the plant). There's no magic switch that turns off your overheads temporarily.
You could be right dan, but I still think we're looking at price rises in 2024
Harvey, seriously, house prices are still unaffordable to buy and for a growing number unaffordable to own and maintain. There is a glut of overpriced homes out there and that's why they're falling. If your argument for building replacement costs to be supportive of a house price recovery then there should be no reason for construction firms to fall over going forward either. If wages catch up then knowing the background inflation in essential staples occurring we can all look forward to some pretty beefy salary increases and businesses will have fatter profit margins in order to pay them :)
C minus results. 51 percent is barely a pass, is more cold than lukewarm
BUT if fhb want to buy and cost themselves more, mortgage and rates etc vs rent, dont come crying back here later
Auctions in Auckland have rarely seen amazing sales results even during hot markets. I think people get confused with Sydney auctions which are a different beast.
by Zachary Smith | 19th Aug 17, 5:27pm - "I think Auckland is similar to Sydney due to geographic, demographic and historical reasons"
Spruikers lying as usual
Over 50% sold is a good result for Auckland auctions. Things are picking up.
Maybe cos those that do sell are below RV?
Auckland RVs were set right at the peak, getting over RV is a rarity.
I still think that. It's similar but not exactly the same. Selling property by auction has always been more popular in Australia and is a relatively new phenomenon for ordinary properties in NZ. You just have to compare the auction numbers and results throughout the years.
Sydney and Auckland share similarities with language, history, being the main economic centre of a region etc.
With higher wages and lower house prices, affordability levels are actually back to when interest rates were in the 2’s a couple of years ago.
I’m seeing house listing methods change from deadline sales to auctions because of interest - It seems people are getting their numbers to work.
Do you have any number to support this our you just pull it out off
Posted before
800k mortgage @ 2.5% = $3161/month
640k mortgage @ 6.5% = $4045/month (20% lower mortgage due to price drop)
Difference is under 1k a month. Take 2 incomes at $75k, add 12% wage increase over past 2 years, and the increase in repayments is covered.
You highlight my below point well = "add 12% wage increase over past 2 years", and there's more of that coming. That's why nominal mortgage rates are going to soar.
BigBen or BigBender? You must be hungover to think that makes sense.
Salary increase let alone being taxed on a higher bracket will not even cover the cost a living that has increase at a faster rate.
12%???
How many people have had 12% increases recently (apart from nurses who fully deserve it?)
https://www.stats.govt.nz/news/annual-wage-inflation-rises-to-3-4-percent
(Oops, just saw your "over 2 years" bit 🤪)
Partner is a nurse, her rate has gone up 32% in 8 months and they've voted to strike through NZNO. Where I work we received 12.3% last year as a 2 year consolidation, this year I'd expect 7% increase to bring us in line with the market rates, and other factors have meant I was up an extra $80k on the previous year. Edit: I guess if your income isn't moving with the times then take a look at making a change. I used to be employed where the security of that job meant sacrificing aspects of my life for the employer, I now realize that it's so easy to get another job and if need be it may take a few jobs to find the right one. And don't be afraid to upskill.
Did you factor in the tax man in your wage increases?
Did you factor in the big rises in cost of living that have effectively cancelled out (probably more than cancelled out) the wage rises? Including higher insurances and higher council rates for those buying?
Did you factor in the big barrier that is passing bank test rates at 9% plus?
On a 30 year mortgage of 640k, at a test rate of 9%, that is about $1500 per week.
ANZ thinks its more like $1200/week. The rules around expenses with banks have changed recently - you only need to demonstrate you'd have a few hundred dollars left over each month, if rates hit the stress test mark and they take into consideration current expenses that could be cut e.g. Netflix etc
Anyway, I'm simply providing a reason why people might be buying at the moment. Perhaps prices have another 5% to drop, but that can be mitigated by smart buying. We're not going to see a further 20% like many on here are calling unless rates go way up.
Agree on your second paragraph
Dealing with mortgage rates in the 12's, not comparatively but practically, is more likely than not.
Inflation isn't beaten, not by a country mile; a qualified global shrinking workforce will see to that, and along with that will come the reluctant inevitable.
On the workforce issue, AI might significantly mitigate that.
Pragmatic vendors loading off before the tsunami of wishful thinking vendor waiting for spring.
I infer that spring is no where in sight..(especially with the weather we're having)
But 10% Interest Rates This Year, Guaranteed is in Sight and the Panic has Begun.
Spring...saw a daffodil last week. Suspect it had been tricked into showing its hand to early....just like some other events.
Geez, vendors have eventually realized their properties are not made of gold..
Wow people still buying at CV or higher. The banks are testing buyers at 9% rates, so who are these buyers with pockets full of cash?
A 500k mortgage will be a monthly payment of more than $4500. Suerly rents are cheaper as there are no decent houses to live in market for 500k these days.
Not sure I follow your maths. $500k at 9% is $3.75k of interest per month. You can’t include principal repayment if you are comparing to rents.
Anyway, agree $1k per week is where most rents top out… and you are renting a house worth a few million, not $500k.
From a speculators/investors perspective, also deduct rates, insurance and maintenance and all your left with is negative gearing and dreams of relief by way of future capital gains. At best there's still an episode of unknown length and breadth of mortgage stress with forced sales ahead from here followed by sub par performance when compared to the prevailing inflation. Baring a possible bust, interest rates are not coming down for some considerable time. Inflation appears well imbedded.
There is no need for FOMO as FHB's have ample time to accumulate more substantial deposits and own a bigger share of their home to live in.
So here is some figures for you. Have brought two rentals for just over 300k both had quarter acre sections both rented for 400 a week. Both I have subdivided and built two four bedroom dble garage on both new builds qualify for tax deductions both rented for 550 a week. One new build built for 235k last new build 255k. Hence why I never will buy in Auckland/Wellington as over priced and no yeild and that there is plenty of opportunity in NZ if you go look but alot on here wanted it handed to them on a platter
Colin Cameron, I think you've blurred the lines between "others wanting it handed to them on a platter" and those who simply want value for hard earned money. Right now, at current prices, houses are NOT value for money. You can be as successful as you want on an anonymous forum and if its all true, it reads as though you've certainly accumulated considerable assets in such a short time. A family just need one house to live in. Houses are for living in, not for speculating on for future gains. If house ownership was viewed more the former than the latter, we would not be in this mess today.
The difference is he clearly has assets to leverage against to get the mortgage to buy said properties and build said houses, as well as the skills to build. While its great to hear that it is doing well financially, it reads to be still done on the back of previous capital gains from other properties bought at much lower prices years ago with lower interest payments and the benefit of interest deductability.
I think Colin is building his own homes and that may be reflected in his build costs. Buyers can probably get the same result by buying a section and relocatable home. The problem is they need to have trades equivalent skills, time, and equity. The time part is a big issue as you need to be at work as much as possible to afford payments. So Colin is capitalizing on the amount of capital he has available, which many do not have. This forum is just a place he can pat himself on the back for not struggling like younger generations are.
Just like anyone who wants to get ahead. People put their money in kiwi saver and or share market. Those brokers or managers buy shares at a discount so that means someone has lost money if the market tanks. Or the business they have invested in leverages the assets the business has to grow which allows the investor to sit back and make money. At least I am working for myself and taking my own risks but the big thing is doing the work myself rather than sit at a screen pushing buy/sell etc. Cause what I create will provide a home for someone.
Colin is an interesting fella. Sounds like he's got a great work ethic and luck is conveniently always on his side, combined with his high level of financial nous he's a poster child for anyone looking to buy their first home.
Goes to show there is opportunities out there and houses ain't 1mil plus
Are you LBP. If not, you probably cannot rent the house out
So do you work for free. Usually the suits/proffessionals like to quantify their exorbitant incomes when in reality they are rip off merchants. I use my correct name so anyone on here can find out I am telling the truth which I would say 50 percent ain't on here. And the point is if people look out side the city they are in will get their own home point of the figures. But it means a bit of inconvenience. Also a human right is shelter not owning a home. Alot of people even if houses were 100k would still rent. Finally rather than being retired poppy maybe it should be tall poppy. People say to me why buy and do what you do with houses do you want to be the riches man in the cemetery. Then turn around an say with are off to Aus to make more money hyprocrites
I guess the thing is not everyone can become a builder, I'm trade qualified but being employed in a trade job is nowhere near as rewarding as they once were. So I work in another sector (also hold higher qualifications/experience) although I know many unskilled people who work "safety" roles who produce nothing and earn at least 50% more than a tradie. Apprenticeships were for the most part not available to my generation and we paid for all of our tertiary education plus interest on student loans for a time, I was lucky to get the experience I now have and don't use. It has been a hard journey bringing up kids and working endlessly to tread water, we've come out the end in a strong position but feel like we should have been where we are 15 years ago.
Take a guess how many builders/carpenters build their own homes. I'll tell you 5 percent out of all them only 5 percent. Cause to hard to get money. But also they like alot of people don't look. My wife and I didn't gave assets to leverage off. Back as the twin towers were coming down and the sky was falling in we bought a section on builders terms had a 10 percent deposit and still kept our full time jobs while nights and weekends we built the house. Built the house with no money. Back then you had till the 20th of the following month to pay subbies and materials so we went like shit for 6 weeks big days boss found me asleep a couple of times. Got it closed in then went to bank borrowed the money paid section and everyone else. But all my so called building Mates said you can't do that. You 40 hour working week is to pay to live what you do in your spare time is what gets you ahead. I used my talents just like a sharebroker/fund manager, lawyer, accountant would do the same. And I never wanted a JOB just off broke rather be destitute but self employed than answer to someone else
Here's another thing retired poppy. A house around the corner to me on the market for 275k has a quarter acre. Been on the market 6 months deceased estate. An as is since HWC dosnt work and a few minor things. FHB can't touch it as banks won't loan on it. If and it's a big if since I have my project at the moment I buy it. Within a month it will be done up and rented. Then I would build on the back another rental. So helping the NZ govt/taxpayer since they forked out 1.6 billion last yr in emergency housing. Maybe rather than investing money in sharemarket/bank TD and sit looking at a screen all day some people should put their money were their mouth is
I know you say $275k, but it wouldn't happen to be this one for $235k? Listing in December and then another listing last month.
Shit no never in the north island only place I own property in the nth island is Taupo.
I should have pre empt the reason I would never buy in Kaikohe. One of ma y schools I went to was just north of there Okaihau I grew up a bit in the Hokianga the most deprived area in NZ only white boy on the bus. My parents when married were the janitors of Kaikohe college. Until they lost the farm (term used lightly) in a mortgagee sale. So no Kaikohe is not fond memories
Oh my Lord, Colin discovered Invercargill........
Nope Canturbury. But seriously did look there.
Only a quarter reaching their rate able value! That's the only statistic we should extract from this article.
I’m amazed it’s as many as that…
From my rather limited understanding of history, bubbles generally do not deflate overnight. They can take many years to correct.
When they inflate and suck people in, the collective psychological forces at play resemble a super tanker - a force that is difficult to resist and takes a long time to turn around.
Even a genius such as Sir Isaac Newton couldn’t resist the pull of the South Sea Bubble and lost a significant amount of money. How is the general populace supposed to fare?
For the last couple decades or so in New Zealand it’s all been about ‘getting onto the property ladder’, ‘prices double every 10 years’, etc. It’s been very hard to question this line of thinking, to go against the grain. This psychological super tanker still has momentum in our collective minds.
As a result, I don’t think it is reasonable to expect the great NZ property bubble to deflate in a nice, neat line over time. There’ll be confusion, little jumps up, minor morsels of spruikers’ hopium, and the odd newspaper headline going against the overall downward trend.
However, with interest rates unlikely to drop and possibly to continue to climb, I am yet to see any good reasons why property prices should rise again in the near future, but would welcome hearing any argument to the contrary.
Agree. I think the only reason prices will hold where they are could be because of construction costs and the floor that replacement cost sets.
Any meaningful reduction in construction costs will take time as well.
It will be all fun and games until people realise they either cant afford their mortgage or investment, then when they realise the government isnt going to make everything ok for them again. The panic and following nationwide disbelief will be humbling for many
Sam - you would benefit from reading Rober Shiller's work 'Irrational Exuberance' - especially the section regarding real estate bubbles (other sections are good also but only if you are buying/selling your own portfolio of shares and bonds). It covers the history of most of the global booms and busts and gives detailed reasoning for the causes and the impacts.
Just a suggestion given the tone of your comments.
ps make sure you get the latest (3rd edition released in 2015) if you do buy it.
https://www.amazon.com.au/Irrational-Exuberance-3ed-Robert-Shiller-dp-0…
Reversion to mean of sales rate requires sales to be below 3300 pcm in Auckland until April 2024 at least. Meanwhile false flags will continue to be waved every week it seems
Someone said to me last week that Manukau / South might benefit from the flood-prone nature of West Auckland, ie. it is a less hazard-prone cheaper housing option.
A whole pile of things come together to even out the price HM, always have. As a last resort the RBNZ steps in and starts throwing about free money if things start to look shaky, actually they throw money even before there is a real problem !
So many people forget that is typically what happens in the early part of the decade. Gains will be back in the next few years.
Correct housing is a long term plan. So it used to take 7 to 10 to double, really doesn't matter if it still takes 10 to 15 to double you are still ahead of the game.
"you are still ahead of the game"
I was going to question your choice of words here but my loss of faith in people to view issues like this rationally (cause and effect and impacts on financial and social stability) is gone so won't even bother.
Right or wrong, life is a competitive game. The earlier you at least recognise that the better off you will be. This doesn't mean taking advantage of others, it means spending money where it counts, working hard on self development and education.
The property clock.
More like the property time bomb...
Tick tock goes the clock.
Do you put yourself to sleep repeating that
If it is the bottom of the market... it's a shame primarily because of all the new RE terms that have come out. Utter laughable bollox. Negative growth, green shoots, covid froth. It's like watching the knight from Monty python....it's only a flesh wound!!
It's just a period of Healthy Cooling or an Adjustment Phase, there is still plenty of Value Investing to be had in various Opportunity Zones.
It is possible that this is the bottom of the market in nominal terms - but I don't think it is in inflation/wage growth adjusted terms.
There is only one bottom of the market. The second sell prices start rising you blinked and missed it.
Let's hope interest rates don't continue to rise. Oh wait...the Fed and Europe have just both lifted and indicated more to come.
Its a Tony Alexander Bottom. If he indicates it .......take the opposite actions.
Never fails!
No way in hell this is a bottom!
This bottom talk is purely engineered and scurrilous marketing (repeated again and again, even though it's not happening) in full hopium they can reanimate a totally flaccid market, by the narrow REA Vested Interest Brigade.
The market confidence to risk it all, to buy housing at these highly inflated prices is still shot to pieces.
The "get in, bee quick" TA and AC acolyte brigade will fall flat, and be forced to crawl back into their caves
With interest rates still rising across the board and going much higher in 2023/2024, the borrowing ability is still receding at a rate of knots.
Test rates at 10% soon!! Guaranteed.
Simple question, how many months of prices not going down does it take for you to admit its the bottom ? or are you the sort of person who still doesn't admit its the bottom even when prices start to rise again cos its just a "Dead cat bounce" or something like that ?
Simply Zwifty, when the average DTI is in the range of 4 to 6x incomes.
SO WE GOT A LONG WAY DOWN, TO GET TO THIS ratio.
- Its what the RBNZ will regulate next year......so the market will get there:)
This crash has just started, as historically epic as it is, its still early in this reset.
Market confidence is torpedoed........no shilling by your REA Vested Interest mates will right this sinking market.
You may think houses are too expensive, but Dreams are free.
The people who sold by auction over last few weeks will be relived as house price’s will continue to tumble many are now refinancing with much larger monthly payments some will struggle financially leading to greater price falls.
Never used propellor property and never will, I have just gone unconditional on a house i bought in 2010. only two beddie, however in hte words of Nikki Conners, the capital gains I made on that property paid of my other property and saved me years of interest. Unsure why people are so anti property and almost willing it to fail? Now I am Govt neutral if prices rise great if they drop i will buy another property,
The market is on the way up - buyers have realised the bottom has passed, inflation is falling everywhere and rate cuts are in sight!
Here comes the Boom.
The housing market had its boom 2 years ago, now down 20% and falling the bottom is not in sight another 20 % down over next couple of years then we might see the bottom. If you purchase a property today booming in two years it will be worth 15 % to 20% less.
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