Barfoot & Thompson sold 40% at their latest auctions as sluggish sales trends continue into the peak summer season

The auction rooms are back up to speed again after the summer break, but Auckland sales rates remain at the lower levels evident in the latter part of 2016.

Auckland’s largest real estate agency Barfoot & Thompson marketed 129 properties for auction last week (to February 10). It sold 49 of them either under the hammer or by 5pm the following day, giving a clearance rate of 40%.

That is well below the success rates that were evident in the first half of last year and suggests sales could remain sluggish during this year’s peak summer selling season.

The biggest auctions were on the North Shore where 16 of the 34 properties were sold, giving a clearance rate of 47%, and at Manukau where seven of the 23 properties were sold, giving a clearance rate of 30%.

Results at the company’s head office auction room in the CBD were mixed (see chart below).

The prices achieved for individual properties that were sold and the details of those that didn’t sell are available on our Auction/Sales Results page.

Barfoot & Thompson Auctions: Week ending 10 February
Venue Sold*  Not Sold*  Total
On Site 9 10 19
Manukau: 7 Feb 7 16 23
Shortland St: 7 Feb 4 6 10
Shortland St: 8 Feb 1 5 6
Whangarei: 8 Feb 2 1 3
Shortland St: 8 Feb 5 6 11
Takapuna: 9 Feb 16 18 34
Shortland St: 9 Feb 4 7 11
Shortland St: 10 Feb 1 5 6
Total All Venues 49 74 123
*Sold means sold under the hammer or by 5pm the following day. Not sold includes properties that remained unsold by 5pm the day after the auction and properties that were marketed for sale by auction but withdrawn from sale or postponed before the auction commenced.

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101 Comments

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That's a low clearance rate for mid February and it further points towards a cooling off the market

Well it simply shows a disconnect between what the market is willing to pay and sellers expectations .

Now its up to the intermediaries (Agents) to educate their sellers about market conditions , and that's not going to be easy

Actually what it does prove, is that the Overseas Investors are gone! Locked out by their own Government by the Capital Flight restrictions. Without these top end buyers there's no real purchase pressure on the housing market which is why the auction market is so subdued. And were now in a "Buyers market".

Thing is we have no idea when the Trump Effect will lift on the China? Could be a few months it could be a few years? Who knows??

Message to FTB's: Take it easy and put in low ball cheeky offers!

You're right. I went to a North Shore Auction on Sunday, no Chinese buyers, and you guessed it, no bids...something very scary is happening. I'm hiding under my blanket.

No way..

..yes way, it be true.

Indeed, all overseas buyers have gone. The Chinese Government is chasing those took money out of Country. Those people is quite after 1 January 2017.

Another reason, some property speculators brought ??% of auciton proeprties last year, now they are under NZ government scrutiny. Too bad! those specuator made Auckland proeprty are unaffordable.

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As previously said...
"UNDER THE HAMMER" sales are BELOW 30%
Up to 5pm the Following day, is 40%

So Figures are still PRETTY BAD
Prices will KEEP DROPPING... while LISTINGS will keep increasing.

(Personally) I expect Prices to fall back to Mid 2015... so about 20%

Good luck everyone who purchases a property TODAY.

I predict a frypan...fall of maybe 10% over 1 year, then a plateau for 5 years or so, then up again on the other side....same as last time.

predicting future house prices has been somewhat of a mugs game for a while.... so many saying fall and it didnt happen, perhaps it will next time, agents win every sale no matter what the price.

Opinions are like buttholes, everyone has one

<"Opinions are like buttholes, everyone has one"

I prefer the extended saying: "Opinions are like buttholes. Everyone has one, and no one wants to see yours."

(Obviously there is the occasional exception in either case.)

You can never be certain with the property market, in it's highs and lows, one thing is for sure, property values will always rise in long term, so if your not a investor its never a loss to purchase, in long term.

You can say exactly the same thing about the share market - a diversified position across the index will rise over the long term.

Yes you can

Sometimes a long time is really long. UK property crash in '87 took about 12 years to recover value. Japan's prices are still lower than peak, Ireland/Spain/Portugal/Italy/Greece still lower than 2009.

...and vice versa. Sometimes it will take a long time to crash too. Who knows there will be another 50 years before the prices will start to come down.

You can also get struck by lightning twice, but I wouldn't bank my money on it.

50 years out of the reach of local incomes...

Who will be buying, then?

I assume the plan is to sell all of New Zealand to foreigners instead? Kinda makes you guys the anti-ANZACs of New Zealand history, if that's the case.

Does the current run up in prices represent a long time?

Its true that prices could continue to increase for a number of years into the future, just as they could stay flat for the next 5 years or fall by 20%. At this stage anything "could" happen.

Its a gamble and with any gamble you should act within your comfort zone.

if its a business decision (investing is a business) then you weigh up all the factors and make an educated guess and if possible mitigate your risks.

based on the current evidence prices will either remain about the current levels or fall. no sign to say they will continue to increase.

How do you know, you are from Holland ;-)
House price should be around 12 - 15 times the average income to put NZ up on similar level as other European countries.

You do know there are people out there measuring this stuff, right? There are actual facts available out there about ratios of prices to incomes.

It is just a matter of the time period to get your "guarantee". It may be up to your children or grandchildren to realize a profit on a purchase done at the wrong time.

In Japan the prices are still in the same range as they were in the early '80s, and far lower than they were at their peak around 20 years ago. The home that I sold in the US in 2006 is still worth less now than what it sold for. It is about timing, as there can be significant periods of no appreciation, or even significant depreciation. Factoring in the cost of money and inflation, sometimes housing is a horrible investment. That said, after renting for 10 years, I bought last year when it finally penciled out to be financially prudent to own rather than rent (it is all about location, and Hawkes Bay has been rather flat in price for a decade until the last year).

Yankiwi ...a Kiwi here with residential investment property in the good ol' US of A.
So good to see you bought in Hawkes Bay ......I'm in Auckland and sold out of it March 2016....the prices here are just crazy ! there is no value for money, with expensive materials and in many cases, crap building standards ie the leaky homes debacle ! and is the land really worth "that much" ?!

The cost of materials and labour are way down in the States (Maryland) as we are ripped off here in NZ by the small cartel of the building supply co's etc.

I think so many people in Auckland have been "brainwashed" especially by the media and "BBQ chats with friends and rellies" into thinking "that's how much my property is worth" ....and I am not going to accept a penny less ! ......all I can say to those people is "Best of Luck" ....

Ps ....reason I sold in Auckland is that the higher it goes, the harder it will fall.... and a crap return on your capital...... 2.78% Gross... what a joke !!

"Now just by luck, I've got 8 properties I am looking to sell just this minute, for very reasonable prices I might add."

I would suggest you hold on to as many as you can

And why is that Wiseguy? Surely the right thing to do is to sell them off in a declining market before it gets worse, some might say?

Yeah not great and where I live on the North Shore of AKL they sold 16 properties - but in that same period listings went up by 150 !!!

And its going up by 30-40 a day..

But would like to see the comparison to the same period from 2016 as I thought Feb was the boom month?

I would be interested to know who are buying the $1mil+ houses at the moment? Anyone been to auctions last week?

From friends who sell RE on the North Shore its a 2 paced market,

Still good activity at top end of market ($1.5M+) that will skew average sell price but the specvestor market dead in the water.

I'd be concerned if I'd leveraged up against the family home to "invest" in the "you cant lose" BS sold to those who bought some of the absolute crap that sold for 40-50% over GV in Birkdale / Bayview / Glenfield etc...

We need to look at the current values rather then looking around for amount of stock on the market, rise of stock does not always necessarily mean drop in value

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Rising stock creates a glut of supply and you end up in a simple supply / demand dynamic - it is a lead indicator of a price expectation gap forming.... i.e. sellers are still holding out for past prices but buyers are unwilling to pay those prices.

If stock continues to increase then this battle of wills will be won by buyers - sellers will meet buyers at a lower price. So in short, you're wrong, increasing stock will result in a drop in "value".

This is economics 101 mate.
And as an aside, I am still shocked at your comment yesterday that the past is a predictor of the future. I'd suggest picking up a book or two on how markets operate before acting like an authority on these matters.

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Evidence suggests not a very 'wise' guy..

Some people only learn lessons the hard way. Some have not seen what can happen in an over-confident market.

People want certainty in an uncertain world. Some things are certain - the sun rises in the east and sets in the west. House prices are not.

So your telling me what happens today wont effect tomorrow?
commonsense goes along way, don't you think?

Of course the past affects the future, but the extrapolation is rarely linear. 'Prices have risen therefore they will rise' is far too simplistic. Have you considered that the enormous rises in Auckland prices recently might actually make the market more prone to a significant correction than it would be if prices were more reasonable compared to earnings?

Based on the current market are we certain that this is the turning point or hoping?

I've got no more idea than you do, which is why I make sure my finances wouldn't blow up if any single investment class falls. I wouldn't be surprised to see a decent drop in Auckland especially, but don't think we can call it for a month or two.

There is a difference between "affect" and "predict".

Auckland listings , should hit 10000 on trade me in the coming days. It has been a very long time since this was the case.

pretty sure it crossed 10k about a week ago (Overall Auckland), if that is what you're referring to

currently 9983

Yes and heaps more new listings today on Trademe, Investors are really ditching stock. Though that makes sense if you think about it; if people know that they won't be able to renew their overseas sourced mortgage, then they know their going to be in a pickle if they don't sell soon.

Up to 10,047 today.

10050. 3 properties in 20 minutes - that would make 9 per hour.

Wouldn't it be higher though because there are now more houses / apartments / shoe boxes? Rather than more houses due to less buyers.

My colleague has put his DGZ property in the market hoping for between $2.5m and $3m. What do you think? Is he realistic in this market? He bought it in 2009 for around $1m.
http://www.trademe.co.nz/property/residential-property-for-sale/auction-...

around 1.4 mil would be the Kiwi price. 2.5 to 3 mil would be the Chinese capital flight price. I can see why he's in a panic.

His 2014 CV is $1.5m, are you saying that Kiwis are trying to 'steal' his property at a level pre-2014?
Note - I didn't mention he is in a panic...at least he doesn't look it ;-)

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I'm saying that 2.5 million dollars is ridiculous for a 1920's villa, albeit refurbished. That price is beyond the reach of even the most well heeled double income no kids Kiwi doctors or engineers. Even if they had support from parents and some existing capital, that price tag is still out of reach.

Lets be honest, we’re not talking about a mansion. This is a stock standard Mount Eden villa. It’s the kind of house that should be within reach of high income talented hard working 30-40 year old DINK New Zealanders.

This is just draining New Zealand of talent. There’s really no point living in Auckland. I was speaking to my former neighbor in Kohimarama. He was training to be an engineer and was quite open about wanting to leave New Zealand and the reason was housing.

I get it though, your friend purchased at the kiwi price and now he's trying to sell at the Chinese capital flight price. I get it. I'd probably do the same, wouldn't everyone.

Your former neighbor in Kohimarama? I totally get it. After living (or probably brought up) in swanky Kohi for so long there was no way he was going to downgrade to a mediocre house in No Tree Hill :-P

He's living with his parents. I emigrated to Germany.

Quite right fat pat. We've come back to NZ from NYC, early 40s, high earner over there but looking to bring the kids up back here. I wish we'd thought more carefully about the financial cost of moving back....50% pay cut and $2.5m for a decent house??!! Its too much of a price to pay. We're likely to bail to Singapore in the next 12 months. Leaving grandparents grandchild-less. Such a shame

No we're saying that you have to be more realistic. He does have the option of 'riding it out' but the problem is wages are not heading up all that quickly. And to be realistic I think it's going to bottom out at 2012 price level and then stay there for a while until our vital industries recover, perhaps then wages will increase to provide more buying power for local kiwi's and immigrants.

Time to hit reality with a bump! Trouble is Double-GZ I think we're in this for the long hall I did try to warn you.

It's ok, warning acknowledged. We're in this together, we're gonna ride this out together, you and me and all the readers here. #OneTeam

Yep I'm with you on that Double-GZ, time to grim and bare it.

looking at the link, Nice house lots of character, but quite small, CV/RV of 1.5m in 2014, Trade me estimate 1.7m to 2.4m.

But lets be realistic, anything over 1.9m and he would be winning big time (based on jan 2009 to Jan 2016 price inflation ) achieving higher than the overall Auckland growth rate. they may have spent a fortune on renovations of course, but there is no guarantee that the renovation investment will achieve the same growth as the house and land itself.

So 1.9m should be his target price

if someone is buying to live in then 1.5m might be achievable, its a small house. for 2m you want to at least feel like you are buying a millionaire life style.

It's good analysis for this property, but you have not factored in the DGZ magic, so perhaps add another $200k :-)

Actually you sound like someone who used to be famous here ;-)
Have you arrived from the other side of the wormhole? I'm just guessing...

Quite small.... try 117m2! At $2.5m that just $21,000 per sqm. A bargain!

This is my guess - I think your collegue is a tad optimistic and the house is likely to sell more towards 2.5m than $3.0m. Good luck to him / her.

I will be more precise and estimate it to be sold for $2.45m.

I think you are right, and I think he is likely to accept $2.45m and I also know that he will moan about it afterwords claiming he should have sold it for a lot more blah blah.

Can you guys guess how much this 1920's DGZ villa went for just before X'mas in Dec 2016? Hint: It was sold within 10 days after being put in the market ;-)
https://www.bayleys.co.nz/Listing/Auckland/Auckland/Remuera/4106650

Double GZ - houses in sought after suburbs are easily touching 80% over GV and sometimes even double.

My guess is $3.8 m. Is that about right?

(edited as I got your username wrong)

Su30 it went for $4.5m in December. So you're about right but still 700k difference ;-) The vendor is an ex-AB and now playing in France.

Holy cow! $4.5m?? The carrying cost of that is at least $250k per year. Would you pay $20k per month to live there?

For $20k living expenses per month I could envision quite a lifestyle of excess. Who even needs a house when you could have an exceptional lifestyle?

Wait what?!

I don't like this guessing game anymore :)

Su30 please guess how much this one went for in December 2016.
https://www.bayleys.co.nz/Listing/Auckland/Auckland/Remuera/1670611

According to TradeMe's property finder or homes.co.nz its recent sales history is:

Apr 2013: 2,500,000
Mar 2014: 3,050,000
Nov 2016: 4,500,000

Any idea why it's being bought and sold so often?

Ask the All Blacks hahaha~

Wiseguy -True, however basic supply and demand forces do come into play. The more "urgent" and "must sell" listings that start to pile up will have an impact.

Bank tightening continues, Election year, everyone waits to see who gets in so a lot of decision making goes on hold. Tax changes and limits on overseas money/ owners, and slowing of immigration are getting focus. Add in a few job losses (que Warehouse) all adds up to reduced consumption and significant downside risks to those riding high on ponzi leverage. Locals are limited by their earning power in little old NZ and are all waiting for some sense of normality to occur, 4-6x earnings multiplier.

Lets face it has been a 2 stage market for a while, Chinese money going mad with specuvestors clinging to their coat tails leveraged up on cheap debt. Take away both booster rockets, who are the over leveraged gonna sell to....?

it's all a bit early to say

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Beggars belief that government and mainstream pundits wont make the connection to the clampdown on capital flight from China. What sort of Orwellian world is this.

I don't think it is an Orwellian world - just an inconvenient truth.

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Everyone who doesn't have a personal stake in denying that Chinese demand has been a MASSIVE factor knows this is key.

But National will swear till they're blue in the face that foreign demand is not a factor...and it's probably "too hard to measure", like everything else inconvenient to their "data-driven government".

Oh they'll make it alright but do everything in their power not to admit it. What they will admit is their building program is working. Pity there isn't any bookies giving odds on that scenario.

Well fixed rates have crept up about half a percent in the last six months but incomes have largely been stagnent. The market needs to adjust one way or another and, after recent years, most people would likely accept that some adjustment is needed. As long as the exits don't get too crowded prices should glide downwards.

Common sense - people won't sell for less than what they buy it for. They would rather hold unless they are unable to pay the mortgage/s. Supply and demand is there, however, demand is stronger for properties in the urban areas, e.g. Franklin is increasing in value. Pervious hot spots such as North Shore are decreasing (over competitive selling market) similar to what's occurring in Vancouver at the moment. Bubble won't pop unless interest rates are high and forcing people to sell their properties. As long as high LVR restrictions are in place average house prices will continue to decrease. Seems like a downward trend in the coming months unless investors jump back into the game. Sooner or later they will be back. In theory, house prices will always go up in long-time. If we look at gravity, apple will always fall down when we let it go. Nothing is going to change unless the actual laws of reality does, I hope this made sense :)

In this case, gravity should be intrinsic value linked to local wages

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Just like Vancouver, New Zealand needs to decide who New Zealand is for - citizens and PRs, or foreign investors. A 20% foreign purchase stamp duty on all foreign purchases is what we need (with forfeiture the penalty for evasion).

Yes totally with you on that Rick, we need to do some preventative measures or at least gain some tax revenue from it.

What's the bet that just like Vancouver we have our share of mansions filled with foreign buyers declaring poverty-level local incomes, while the father is back overseas running a business. Free schooling, free medical care etc. - and minimal tax contribution to New Zealand.

The problem with being naive is that other people easily exploit you.

Yes it's every where in the more popular cities, time to include an empty home tax too! Obviously there would be exemptions for those properties that are being renovated or a bereavement etc.. But it would have to be within a reasonable time period.

So it is high time to take a stand and fix the housing market over night!
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1167...

If foreign buyers have had their wings clipped and if their wings stay clipped and they do not reappear in the market, prices will most definitely go down, led by them selling property they overpaid for, for whatever they can get for it. They have almost single handedly led the market up, they will lead it back down again.
There will be a "critical mass" situation, sooner or later, probably sooner, that will see prices plunge, confirming, to me anyway, that government intervention in the market should happened and would have prevented this ludicrous situation. Foreigners should not be buying ANY of our land other than maybe commercial, not farms, not houses.

lucky as the sheeple believe they only make up 3% of the buyers.
we have seen the effects of must get in then must get out first mentality for investing to make money

https://www.wsj.com/articles/china-market-plunge-has-investors-wondering...

http://www.businessinsider.com/regulation-changes-in-china-could-crash-v...

Convoluted logic rules until realism sets in.
No one has ever witnessed a situation where price to incomes are at 10 and interest rates go to 7+%
Interesting.

The housing market is all supply and demand. Anyone buying a house shouldn't be surprised if that price halves if the demand dries up, especially if they purchased the the top of the bubble. It actually doesn't matter if it does halve for many people, because they are living in it and not selling. If they do sell, they are likely buying and selling in the same market, so it shouldn't affect them much. It may however affect those who have used their house as a ATM, and the bank wants them to repay back some debt. But this seems to be more of an Auckland problems. Wellington house prices are still rocketing, probably because people are sick of of Aucklands house prices. But there is a bigger potential of EQs in Wellington which puts people off.

This is only if you had paid cash. If you involved a bank in your purchase, they will never allow the value of 'your' home to drop below your equity in it. Top up immediately to maintain your required equity of 'bang' it's on the market as a bank mortgagee sale. If it sells below the value of the mortgage you still have to top the bank up, it's all in the fine print!! Good luck in a falling market specuvestors.

Exactly right

It's going to be an interesting few months for Auckland residential property. The latest data suggests that the peak of the present cycle has been passed and the question has become "how low might prices dip?". Rising interest rates on the horizon are a concern, especially in the context of some exorbitant debt levels. Advice to sellers: either take your property off the market or be prepared to settle for a bit less money. Advice to buyers with cash: you could soon be at a marked advantage so bide your time a bit. Hopefully, a situation of sellers stampeding for the door will be avoided... but don't completely dismiss such a scenario.

Wake me up when the regions go down please

We are in the market looking for another dwelling but what puts us off is the "for auction" tag. We want to look at houses in our price range but the real estate agents wont put a figure on what the properties are worth. We wont look at a property unless we know the purchase price, so a bit of a stand off. Been down the auction route (selling and buying) and wont waste my time again.

Auctions I would imagine are great where there are lots of vendors and even more bidders. However with falling numbers of bidders maybe the time is right to go back to putting prices on properties. We are looking at spending K$800, but not on properties being auctioned..

Gerrit wait till mid winter if you can, you will be glad you did.

Everyone here has been talking about mid-winter since 2009. How many mid-winters do you think we can tolerate??

Double -GZ , given the alacrity with which you post on a Barfoots item, the assumption voiced by many that you are merely a mouthpiece for the company is well founded.

Wow Trademe listing for Auckland over 10k now, the panic is starting in earnest now!

Demand is there but prices just can't keep rising. No longer a speculators market. No doubt it will just tick along at a more sane level where buyers can call the shots a bit more. I don't think there will be a crash of any kind.

Demand is there but prices just can't keep rising. No longer a speculators market. No doubt it will just tick along at a more sane level where buyers can call the shots a bit more. I don't think there will be a crash of any kind.

Good news is no overseas buyers are out to shop for Auckland Property. As Their Government is chasing those who took capital. It is illegal to move money out of China.

Another reason are some speculator is now under NZ Government scrutiny, so those are forced to put propery on market.