The residential auction results are showing considerable volatility lately, up one week and down the next.
It was a down week at the latest auctions monitored by interest.co.nz (29 July - 4 August), with 159 properties on offer around the country. That's down from 224 the previous week.
However, there was no change in the sales rate with exactly half of the properties on offer selling under the hammer at the latest auctions compared to 51% the previous week.
Auckland continues to dominate auction activity, accounting for 70% of the latest auctions monitored by interest.co.nz, while the region's sales rate was the same as the national average at 50%.
Prices might be a bit weaker in Auckland than elsewhere with just 18% of the properties that sold selling for amounts more than or equal to their rating valuations, compared to 32% nationally.
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.
The comment stream on this story is now closed.
- You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
91 Comments
What considerations from overseas could have an effect on house buyer and seller sentiment in New Zealand?
Could the unravelling of China’s colossal property market in any way affect New Zealand’s?
If the Fed continues to raise interest rates, will we have to follow suit?
Given that we have similar institutions to the UK, might we expect similarities to what is happening there? (I’ve seen only news accounts of people facing mortgage repayment difficulties.)
Any other external factors of note that anyone can think of?
We analyse and observe internal affaires quite well with this website, but New Zealand may well be like a canoe in the wake of a few supertankers, bobbing up and down like a cork, no matter how carefully the passengers are paddling.
Continued unrestrained global debt issuance to avoid it all hitting the wall with little growth in productivity to show for it. This only serves to support interest rates until one day it does hit the wall.
The realm of external possibilities is immense to the point of not spending that much time dwelling on them. And if something were to hit the fan, it's already baked in today, you just won't know yet.
Sam asked the question "Any other external factors of note that anyone can think of?"
And I could have either made a really long list, or make the reply I did.
You can have a point for replying like a good boy.
LOL! - no. Mine wasn't a long list. Just one "factor of note" IF you can think of it :) Nobody need dwell here, just contribute and discuss without patronizing others.
I thought I did that, then you stepped in.
No comment would have the best result painter...your ego would not allow that unfortunately 😔
You can't see all the times I haven't replied though.
The realm of external possibilities is immense to the point of not spending that much time dwelling on them. And if something were to hit the fan, it's already baked in today, you just won't know yet.
The futures complex, don't think about it. Get in quick.
Pretty much. While people sit around wondering what life might bring, it's already happening.
We want to look for patterns to help predict the future, most of the time they're wrong. The Evergrande collapse made big news and it happened what, 18 months ago? Some were promoting it as the start of the big one, huge debt to bring it all down. All we can really determine from the ashes is the Chinese real estate sector is looking pretty sick - but then too so does their entire economy currently.
Yeah, lets get in quick shall we? by Pa1nter | 20th May 23, 12:55pm - "I wouldn't have advised anyone to take up any substantive financial responsibilities since March 2020"
.
Get your place holders in kids, quick!
Do you take pride in being a smart-arse?
Not when it's fish in a barrel stuff poopy.
I agree that human affairs are too complex to be making predictions, but I do believe it’s important to keep an eye on what’s happening outside little ol’ NZ. I find the topic interesting too.
It's definitely of use getting a sense for how the rest of the world is experiencing things. Most of us live fairly parochially in our own little corners, and tend to think what's happening in our neck of the woods is somehow unique. Cast a wider net, and you can see the same trends occuring to varying degrees most places.
Good question. The big one that almost no one talks about but imo is a real possibility, is the war in Ukraine. Many credible accounts, with hints now even creeping into MSM, that Ukraine has basically lost. Some of the recent drone attacks into Russian and Crimean territory are marks of desperation more than anything.
The big question is what the geo-political consequences will be when it sinks in that the US and NATO have lost this war. In particular, what consequences for the dollar's status as reserve currency, which has been slowly eroding for some time now. One real possibility is that this process accelerates significantly as we see more and more countries dump US Treasury bonds.
In that case, US interest rates could easily spike to levels at or above the early 1980s, mid-teens or higher. NZ would have little choice but to follow suit, and house prices could easily fall by another 50%. Bear in mind that even at that level, they would be high relative to average incomes.
Many credible accounts, with hints now even creeping into MSM, that Ukraine has basically lost
What? You ok to share the sources you're following?
My understanding is that Ukraine's modus operandi is to attrite the Russian supply chains to the point it's untenable to hold territory. Not the only strategy, but this one's progress won't show up in MSM. Quite the contrary
Also, Ukraine will have lost when it's out of ammo. Far from it, as a lot of equipment already pledged for it hasn't arrived yet
In the interest of transparency, I'm mainly following ISW and Perun. But genuinely curious where you get your info from
The answer could also be a stalemate.
Russia has built fairly formidable defences along most of the front, that Ukraine can't penetrate - potentially not even the US could either. But Russia also currently lacks much in the way of offensive capability to take more ground.
We can't know the full story due to the fog of war. Putin's likely hoping the West will decrease their support for Ukraine if Ukraine can't make much meaningful offensive progress. The West seems to be hoping for some sort of Russian collapse, either politically or militarily.
"Putin's likely hoping the West will decrease their support for Ukraine if Ukraine can't make much meaningful offensive progress."
That's what I'm thinking to a degree. With a supposed big recession coming to the West then it'll be a hard pill to swallow for western societies to fund a war in Eastern Europe while going through hard financial times themselves. Maybe that's what Russia is waiting to have happen. I don't see the conflict coming to an end for quite some time. It might come down to, can Russia stay irrational longer than the West can stay solvent.
Much depends on what it's reasonable to think Russia's goals are. If you think its goals are primarily offensive, to take as much territory in Ukraine (and beyond) as possible, then it's reasonable to pursue a strategy that tries to erode its war-making capacity.
However, if you think that Russia's aims are primarily defensive, mainly to stop the eastward spread of NATO and in particular to prevent Ukraine from becoming a NATO bulwark on Russia's border, then it's not reasonable to keep escalating. Instead, the goal should be to negotiate; indeed, that should have been the goal from the beginning.
In my view, the latter picture is correct. Jeffrey Sachs provides a good summary of some of the background: https://www.jeffsachs.org/newspaper-articles/wgtgma5kj69pbpndjr4wf6aayh…
Good points. Also, the commentary here is surprisingly short term oriented
My 2 cents is that the external factors that matter are the long term ones. Land value itself is threatened by self driving, work from home, falling demographics, cultural shift with a generation of pissed off or defeatist millennials and Gen Z's who want radical social change and don't accept behaviours ingrained in previous generations
Land and property are long term investments for many (bar speculators). Deserve a long term lens as well
The question is not how much are we waiting for all the above to effect change, if ever? The question is what are the chances none will eventuate in the next 5-10 years?
Some might, but then again how many unseen curve balls will also appear in the next 5-10 years? Plenty.
There was a fairly strong counter culture movement in the 60s and 70s, of an intensity and level of physical involvement that eclipses the keyboard based disdain of today. Those hippies evolved into the most capitalistic bastards we've seen so far. So I can't really put much stock in today's disenchanted being much in the way of positive change agents.
The longer out you go the more wrong some predictions will be.
Good points.
I long ago opined that perhaps events in China might see the mass sell up of Chinese owned property in countries like NZ and Aus. A bit like what happened when the Japanese property market crashed.
However that has not transpired and apparently property buying by Chinese nationals has increased in Sydney this year.
Has there always been (in the last couple of decades) the desire for Chinese to store wealth outside of China and the clutches of the CCP, and has it ramped up or decreased recently?
Their property market is unravelling, on an epic level. Although it will result in wealth being lost, it could also be that many more will make extra efforts to hide wealth overseas due to social tensions, thus affecting property markets.
It’s astonishing what’s going on in China at the moment, not only re property, but demographically, environmentally, politically…
It's certainly an interesting exercise, they're packing what the West centuries to evolve into, into mere decades.
Yep.
About 5 years ago I predicted the brown stuff would hit the fan in China between 2022-2025. Almost no one had that view. Almost everyone was bullish on China.
As you say, maybe it creates more impetus for people to get money out of China, rather than the reverse. I thought the CCP had taken steps to prevent that, but maybe they aren’t effective.
HouseMouse
So, well, well, one of your many, many shotgun pellets has got somewhere near the target.
Not sure what your rationale was five years ago when, at the time, Covid which has had the most significant impact on the current global economy was unknown. There again your predictions tend to be typically guesses.
Now, don't get triggered . . . a legitimate response to your post.
Cheers
It was pretty obvious China was a speculative bubble of epic proportions for any one who cared to look (not many did). Not to mention China’s demographic timebomb.
Despite my occasional misses my track record is pretty strong Printer 8. And at-least I tell it like it is and don’t bend tbe truth 😂
"Despite my occasional misses my track record is pretty strong Printer 8." Come on HouseMouse. Maybe Chebbo is the Prophet ?
by chebbo | 30th Dec 22, 12:22pm
I predict that HouseMouse will turn up to make several thousand predictions, and then spend the rest of the year publicly self-fellating over the 3 he happened to get right.
Up
30
It was pretty obvious China was a speculative bubble of epic proportions for any one who cared to look (not many did). Not to mention China’s demographic timebomb.
I think you're confusing "what's in the news cycle" with what people might think.
There's a bullish view for anything in life. Anyone reasoned wouldn't have assumed China a smooth ride to prosperity, and that's despite there being a decent amount of anti-CCP media out there. They're effectively trying to leapfrog centuries of development into a few decades, whilst also being managed by a weird sort of hybrid social-capitalist democratic-dictatorship.
What could go right?
Given that the population of NZ has grown by about 180k (3.5%) in the last 12 months, and the positive effect that has on demand for houses, prices are going to be rising soon, Tony A says so too!
Is there any data you've seen that supports that correlation?
I've heard it from spruikers (who weren't talking about it during the no immigration covid boom) but never seen the data...
I think they're referring to the one off "Residence Visa Pathway" for 165,000 migrants currently in New Zealand.
Sure, this makes them eligible to purchase a property. And may add demand to the buying pool. But it doesn't change the number of households that need a roof over their head, so if these 40k or so households do buy, then there's 40k less rentals needed.
https://www.beehive.govt.nz/release/one-residence-pathway-provides-cert…
"Pathway" to where?... Straya?
https://www.customs.govt.nz/about-us/statistics/passenger-statistics/
This will give you bodies across the border ( for any reason, not trying to predict how long they stay in or out for), then add in natural increase ( births minus deaths) at about 20 K per annum
Can you not count?
Or, even better, could we count the right thing?
https://www.stats.govt.nz/topics/population - the first table is estimated residents. It's gone up from 5.115M to 5.2M in the year to March. That's 85k (1.6%)
Admittedly just 1 away from Harvey's number. With the only caveat the 1 is in front
I'm pretty much convinced it's stats NZ that cannot count at this point in time - don't forget their 'immigration' statistics are not based on counting at all, but a poorly calibrated ML algorithm, which customs data regularly calls into question. And a failed census or two... they're pretty hopeless.
Edit: and yes, there was positive net numbers Jan-Mar this year - mostly driven by seasonal influx in Feb - and already more than offset by net departures since.
So why aren't property prices in Sudan the highest in the World as migrant flock across the border in their thousands every day? Answer: It's not the number of bodies that matter, but what their capacity is to buy, whatever.
It's only one driver, however if the past 12 months is plus 180k, and the 12 months before that was minus 50k, pretty significant huh?
Immigration? It's Harvey's only driver now. The cost of money elevated it all to dizzying heights, the same is unravelling it - simple.
And in the past 12 months property prices have fallen, what, 20%? And guess what? They've got a LOT further to go.
(In the UK during the late 1980s property rout, rents skyrocketed even as sale prices plummeted. That was because sales had dried up, but people still had to live somewhere. In all likelihood, that scenario is coming here; rents to keep rising (and dwelling concentration to increase) and prices to keep falling)
Interesting point bw, hadn't considered that. Cheers
So if rents keep rising bw, then me and my mates will be more motivated to buy more rentals, which does what to demand🤔
......nothing, because from an investment perspective, you and your mates are probably the only ones foolish enough to do it. Figures just don't stack.
Harvey W = HW 🤔
Some areas in Auckland have 2 or 3 families living in one house over crowded conditions many living in cars, crime rate is climbing the government is aware of this and should be building housing with low rents only a matter of time before social breakdown pushes governments hand.
180k more people thinking house prices are stupidly overpriced
According to my rough calculations of the 2023 stats with that customs data more are leaving than arriving.
"If you can't borrow, you can't buy" still has **a long way to run, both in cost terms (% rate) and availability terms (LVR, DTI, Bank Capital Ratios etc)
(**The RBNZ could have kept the party going, just like the RBA tried to, but didn't. It knows that the long term benefit of correcting the decades-in-the-making imbalances in our economy outweigh the immediate discomfort of doing so. Sure, it's had a few stumbles along the way (the May OCR being one, when everyone was ready for 6%) but given where it's taken us to, deliberately, it would be self-defeating to change tack now. "Don't fight The Fed" and all of that)
NZ had over 100k newly minted residents in 2022 and that has not had a positive impact on the housing market.
The demand people talk about with immigrants is in rental property but the yield is still so good aweful I doubt it will spur anything in the short term.
Losing equity on a negatively geared million dollar townhouse does not sound like a good time to me. There are much better investment strategies, even if housing is your thing
The amount of people in New Zealand currently has risen ~30k since the start of August 2022. YoY. I’d argue 10-20k are here for the World Cup, and will leave in August.
Arrivals and departures. Don’t know where you’re getting 180k from, that sounds like imagination land.
Remember that using net migration as a tool requires you to understand how they get that number. It is based off current immigrant intentions and emigration that happened over a year ago. If an immigrant arrives, decides this country is too hard basket and leaves again. That will be a net gain in migration for over a year after they leave.
I think they're referring to the one off "Residence Visa Pathway" for 165,000 migrants currently in New Zealand.
Sure, this makes them eligible to purchase a property. And may add demand to the buying pool. But it doesn't change the number of households that need a roof over their head, so if these 40k or so households do buy, then there's 40k less rentals needed.
https://www.beehive.govt.nz/release/one-residence-pathway-provides-cert…
The average wage is around 70k and average house price in Auckland is 950k so big problem with affordability,only top 5% in earners could buy a average property in Auckland from scratch but has to wait 8 years to save for the deposit. The housing market is tumbling down 10k a week so no rush as negative equity will be your next stop, the people who purchase last year are seeing huge losses in value already.
"the people who purchase last year are seeing huge losses in value already."
Those people may also get a teaching lesson about Standard Rates. You Won't Get Taught That Lesson On This Site.
https://www.stuff.co.nz/business/money/300941816/the-home-loan-borrower…
Another set of results that don't add up
Approx 15 of Aucklands 56 sales equals 26 percent at/above CV
Is it a case of making the results fit the storyline
Wow 50% still selling in auctions.
Do those people not read? Really so many living in isolation that they do not see what is happening to the prices and what is unravelling in the world around us?
High interest rates, bigger economies not buying from us anymore. Our main industry farming is not going to get paid what they expected. Big holes in government revenue intake.
A small country at bum end of the world which can't consume all they produce and high cost of transport to sell it to anyone who would want to buy.
God save NZ.
The 50% is not due to a large number of buyers, it’s due to a small number of sellers. That could change in an instant, particularly if Labour were to somehow win the next election.
Spot on JJ, JC, triple J, JZ, JJFeeney and Dom...
This week's B&T Auckland auctions reveal a high number of passed in properties that attracted reasonable bids. Of course the auctioneer will only accept a starting bid that is at least on the outer edges of the ballpark. 30 properties were passed in and 14 of those did receive bids.
Subsequent tracking of such properties in the past has revealed that nearly all that sell eventually sell for more. About half languish on the market. Of course whether or not it will continue like that is hard to predict.
"Subsequent tracking of such properties in the past has revealed that nearly all that sell eventually sell for more"
LOL! - in 2020 they probably did. https://www.youtube.com/watch?v=fXSyCPongjA
No, over the last 6 months, 5 - 500k more. Even I was surprised.
Unbelievable!
We went through this a couple of weeks ago where I presented the figures. The trend appears to be continuing as far as I can tell.
The take home here is, sellers, don't let the doomers on Interest.co gaslight you!
Zachary, you've got things a little twisted here. Falling house prices will in time open up financially sound opportunities for others. The fallout of the much extended period of overexuberance has yet to run its course.
I'm just reporting what I am observing, not engaging in social justice.
Perhaps you're more a Spruiker unwittingly engaged in social sabotage then.
For "more" than what?
CV, or auction reserve.
Selling above CV means nothing. All CVs post 2020 are covid overinflated. The next CV evaluation wil see a huge drop.
And what about the vendor bidding manipulation
What about One roof and Homes.co algorithim influence on seller expectations?
Passed in properties that had low baĺl bids just mean the reservè was too high.
Most wendor price expectations are based on agents spruiking the seller using these current over priced covid inflenced CVs.
If a buyer is buying a house near or over CV they are crazy and will be sad when the next CV rating shows they paid 30% to much for a house they may never sell for a profit in the hext 10 years.
The whole RE market is full of smokey mirŕors, a devious RE industry, Agents of deception, biased banks and ecomists, poor manipulated data, and pathetic devious indusrry liars.
I have more faith in the people here who pick a continueing fall than the profiteering industry scum that are over inflating a housiing balloon full of holes made by the silly pricks themselves.
Prices are usually mostly influenced by recent nearby sales.
Prices are usually mostly influenced by recent nearby sales.
Yes, that will also be the case on the way down ..
It's curious that my comment gets no upticks when it was my insightful contribution.
It's inconsequential whether it's going up or down...smh, jeez.
haha brutal but so on the money
How do ẃe get a beakdown of who the buyers are in Auckland?... Stats nz?, TM?, or those spruikers the REINZ?...
If you lòok heŕe https://www.interest.co.nz/property/residential-auction-results you see it is mostly the cheap under 900k properties selĺing
Auckland is over 60% of the 50% of auctions ssles monitered
My fèeling is...
1. Imigrants with cash.
2. Aucklanders from flood affected properties/areas now have insurance money?
3. Cash buying property dudes adding to thier rental portfolio.
What say you?...
Most people would struggle on even a $900K mortgage so the bottom end of the market will just get better and better. My brother has a place in the $800's it would sell in a matter of days, but then what ? unless you have the cash difference or want to take on another mortgage you cannot "upgrade". By the way everyone here thinks immigrants coming in are always broke, not sure why I always think the opposite looking around me, its the ones with money who can afford to get out for a much better life.
https://i.stuff.co.nz/life-style/homed/buying/123738629/stuff-launches-…
I haven’t looked at this graph for awhile. We still have a long way to do.
It's savage... death by debt..
Yip and the US may continue to create inflation to avoid defaulting on its national debt (deflation isn't an option for them because they will default very quickly if this happens), and export this to the rest of the world. Meaning it is possible interest rates keep ramping up higher and higher (in 5 years time, it is possible we have rates in the 10-20% range - I'm not saying this is a certainty or a probability - but it is a possibility).
This is a classic example of why the RE market is stuffed!!!
Check the price expectation v the 2017 CV v the 2020 valuation..
And all for a 2 bed box next to a muddy estuary.
2017 $640k
2020 $1050k 🙄
Offers over $1350k🙄🙄
https://www.trademe.co.nz/a/property/residential/sale/northland/kaipara…
Nice shed....Not worth the crazy CV.
A property address with "The Strand" "River Rd" "Lake Rd" always commands more.
Ask IT GUY
Needs more privacy fencing
If it's not going to sell, it may as well not-sell for a higher price than a lower one.
It was only built in 2022 so ignore the old CV.
https://www.propertyvalue.co.nz/northland/kaipara-district/whakapirau-0…
It's not an ordinary property though. QV values it quite highly. For someone retiring who is fit and loves fishing it could be just the thing and not far from Auckland especially with new motorway opening.
I see toll prices have gone up.
https://www.nzta.govt.nz/roads-and-rail/toll-roads/toll-road-informatio…
US 10 and 30 year yields have been breaking out higher again. This could be a sign of higher for longer for rates going forward.
Interesting as well if you look at the charts over the full time scale...in my opinion we may have ended a 40 year cycle of falling rates and now (in 2020-2021) have pivoted into a period of rising rates. This could be for decades to come and will be a profound change for investors who have got rich from ever decreasing discount rates/debt costs.
Risky business, this property industry. But we've forgotten that over the last decade or so. But risk has a way of reminding us at the most inopportune time. And much of that time, it's got to do with the Debt involved. Not us, yet,but it might as well be.
More than $500million worth of housing development projects are set for sale following the collapse of building company Toplace, leaving thousands of apartment owners in the lurch. It is understood the company's collapse could affect more than 20,000 homeowner. The failed property empire is being broken up by major lenders seeking sales to recover millions in debt. Toplace, one of Australia's largest privately owned development and construction companies, collapsed in July, entering voluntary administration having debts of more than $1.24billion.
https://www.dailymail.co.uk/news/article-12374933/Jean-Nassifs-Toplace-…
Indeed. Know when to hold em and when to follow em.
Good sensible article from Sam Stubbs today - lots of respect for that guy. Tough read for the DGMs though.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.