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Homes in West Auckland struggle to sell at Barfoot & Thompson auction

Property
Homes in West Auckland struggle to sell at Barfoot & Thompson auction

Barfoot & Thompson sold 81 of the 224 properties the agency marketed for sale by auction last week, giving an overall clearance rate of 36%.

However results varied widely between auction with a very low sales rate at the Shortland St auction on March 31, where all but one of the 25 properties on offer were in West Auckland.

They included a reasonable mix of homes from throughout the district, including properties in in Kelston, Te Atatu, Massey, Glendene, New Lynn, Henderson, Ranui, Glen Eden and Sunnyvale.

But only three of the 25 properties were sold either under the hammer or by 5pm the following day, giving an overall clearance rate of just 12%.

Of the 22 that were unsold, six were withdrawn from sale.

The highest sales rate was at the Shortland St auction on 28 March, where about half of the 21 properties on offer were in central Auckland suburbs, including Lynfield, Mt Eden, Sandringham, Remuera, Mt Albert, Blockhouse Bay and Mt Roskill, and the rest were from west Auckland.

Thirteen of the properties were sold by 5pm the day after the auction, giving a sales rate of 62%, however most of the sales were in the central Auckland suburbs while most of the West Auckland properties were passed in.

At the North Shore auction, 43% of the properties found new owners by 5pm the following day and at Manukau there was a 30% sales rate.

See the chart below for the auction summaries, or go to our Auction Results page to check individual prices of the properties that sold, and the details of those that didn't.

Barfoot & Thompson Auction Results- Week ending 31 March 2017
Venue Sold* Not sold* Total
On site. 11 15 26
Manukau, 28 March 13 31 44
Shortland St, 28 March  13 8 21
Shortland St, 29 March 12 29 41
Pukekohe, 29 March 1 2 3
North Shore, 30 March 18 24 42
Shortland St, 30 March 10 12 22
Shortland St, 31 March 3 22 25
Total 81 143 224
*Sold includes properties sold under the hammer or by 5pm the following day. Not sold includes properties not sold by 5pm the following day, or that had their auctions postponed or were withdrawn from sale.

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61 Comments

Shouldn't the Barfoot price numbers be out soon?

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not until tomorrow

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my prediction is that the average price will be a new high.. cause the volumes have dropped off dramatically..

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"Of the 22 that were unsold, six were withdrawn from sale."

Listings are reducing, I wonder if this is not becoming more widespread? How long will vendors wait then? Till after the elections?

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they are basically trying out the same tactic as in the previous downturn, but in that instance it worked for them. This time around rising interest rates will have a ramification for those who cant afford the higher payments and are highly in debt

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Usually followed by the 'chase the market down' phase.

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My Inlaws are in Grey Lynn, house listed down the road, normally would have been snapped up (if the last three years can be considered normal) but no bidders at auction, now listed with price... 1.5 plus for a 2 beddy doesnt seem to fly anymore.

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Well listing haven't reduced that much on TradeMe currently at 10962 for Auckland which is still quite high.
Also we're in to Autumn now so listing naturally drop off as we head in to Winter.

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We now have that "great Mexican stand off" at the auctions rooms where vendors are "sticking to their guns" on the price they would of got in 2016 ..... as opposed to the "market situation" now in 2017....

There are going to be some very disappointed vendors out there, who are sitting on houses, that they can't sell at "their price" while watching capital gains slip away ....while paying mortgage interest payments...what a combination !!

I will say this only once ...."a property is only worth the amount you receive for the sale of the property ! " ....not according to your neighbour, RE agent or even the greatest property spruiker of all ...the NZ Herald !

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im not sure I get you.. isn't this already that "Great Mexican stand off", hence low sale volumes?

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@Houses Overpriced ...yes agree and it will only get worse, so I reworded my post.

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talking of spruiker where are double g and zach to hijack the thread talking about sales and record prices achieved

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I'm keeping a low profile and I think DGZ is as well. I will say that auction clearance rates are fairly consistent these days being between 30 and 40%. The West Auckland result is interesting, perhaps reflective of the different personalities of Auckland. If you check some of the sales results some properties are still getting very good prices between the middle and high figures of homes.co.nz with some even getting above the high figure.

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Yes I am definitely trying to keep a lower profile this week as I think people are close to attack and explode on me every time I open my 'mouth'. The very reason why I went to a live on-site auction last weekend was to see it with my own eyes what the market was like to keep myself informed, at least in the DGZ. And it was clear that many properties (including a large 'shit box') are still getting very very high end prices! Here's what I witnessed that supports Zach's claim:

A fantastic result on Saturday at the on-site Auction for this beautiful family home.
Six bidders...but only one lucky Purchaser, and very happy Vendors!
www.barfoot.co.nz/591910

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Good thinking DGZ. We all agree. Stay low profile.

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0nly 12% sold in West Auckland Zach & DubleD
I hope Luckens Rd prices don't decline too much
Told you Zach to take that 300K profit in West Harbour when it was there
Now you'll just have to be content to continue to sell yourself the old worn out line " I'm a long term investor"
NewsFlash : You take your profits
I shouldn't need to elaborate but I feel you delude yourself !

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I would actually feel really bad if I sold a house and it dropped in value by tens of thousands or more soon after. I guess you were right, I'm not really a businessman, just a humble computer engineer.

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Ha! Yeah right

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I'll put the Luckens Rd property in the market in about 25 years time so the current value fluctuation is irrelevant really.

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They will be waiting for the heavily skewed Barfoot's average sales figures to come out. With low volumes and a few high end sales these numbers could be anywhere, and are a fairly unreliable indicator of anything (note the ridiculous jump in their Eastern Suburbs average last month (50% up on the preceding averages) which skewed the whole city's average to a new high...

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"a property is only worth the amount you receive for the sale of the property ! "
@CH
I agree but tell that to this guy, 300k more 3days later
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=118…

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Interesting article. Seems like the second purchasers paid way too much... someone better audit their books for laundry.

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I've got quite a number of properties in the Auckland central reigon saved to my trademe watchlist, for research purposes. The kind of properties I would be interested in buying, if things weren't so overvalued.

Anecdotal of course, but 95% of these follow this formula:
1. Goes to auction
2. Doesn't sell at auction, so lists at a pretty damn high (2016 hopeful) asking price
3. Asking price is reduced
4. Asking price is reduced again, and it sells.

Interesting times. I'm sure there are many other would-be FHB's waiting to see WTF happens in the next year or so.

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Agree, waiting for prices to recover could be a long wait, especially with all the headwinds. Literally a case of waiting while any potential cap gain erodes, and waiting for higher rates to bite.

If the Govt changes and the door is slammed on overseas owners whose money underpins the debt ponzi, there will be tears....and liquidations.

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Hay, you all need to harden up and join the army.......

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Yeah, the NZ Herald should really have headlined that "Former gaming addict who married a rich girl says he'd totally join the army were he young and less lucky. Totally."

A little long, but a lot more real life.

I'm not sure he realises Command and Conquer and the real life army are quite different experiences.

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West Auckland is a popular area for first home and low deposit buyers because prIces tend to be cheaper than central Auckland.
But first home and low deposit buyers are fighting the Reserve Bank LVR rules, so tough luck - they should be know their place and remain content to be renters for ever.

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So it's the LVR restrictions holding back first home buyers, and not the vast increase in house prices over recent years? If we're lucky, the restrictions will be lifted once house prices are more sensible and first home buyers will stand a chance again.

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>" they should be know their place and remain content to be renters or ever."

AKA National Party policy

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More restrictions - overtime pay is 20% reduced, interest rates are rising steadily, buying a home is getting from hard to very hard. What will the next government do? It depends who we vote really, it's our responsibility!

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Yes it is solely the lvr amendment the Banks have implemented that has slowed the market.
Nothing to do with interest rates as they are lower than 2 years ago.
Watch this space, LVRs will be altered inside one year.
The Banks can not afford to have the LVRs as they are as lending is being stymied.
Alternatively they will amend policy so that it is only 40 percent for the property being purchased and not for existing security property.
Current policy is ridiculous and will be changed in due course.

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I'm not sure if you understand the legislation, but it's not something the banks have implemented. It's a condition of their banking license.

FHBS can still borrow 95% of the property value if its a newbuild (exempt) or wthin the banks speed limit (10% of lending can be >80 LVR)

The 40% you refer to is investor properties --- and why shouldn't they be restricted? It's part of the reason the values exploded, with specuvesting. That's how bubbles work.

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No you are wrong there.
The LVRs for first home buyers was raised from 80 per cent to 90 per cent.
The Banks LVRs for investors has also affected First home buyers as parents with investments are not able to assist their kids to the same degree.
Not sure that Banks are lending to newbies with only 5 per cent deposits!!!!

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Rich, if you have only got a 5 per cent deposit then I would suggest that you will not be able to afford to borrow 95 per cent and afford repayments on the new build,unless it is a shack!!

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You're in Christchurch, right? Here's a brand new 3 bedroom 2 bathroom for $495k

https://touch.trademe.co.nz/property/listing/view/1292236030

Comes with a FREE CAR!!!!!

I must admit I haven't been to ChCh and don't know the place at all so I'll let you chime in on what the area the house is in, but $25k deposit is 5% of $500k and that house doesn't look like a shack to me!

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So the ol' 'free car' trick is back? Was very popular in the USA in 2006/07, and made an appearance here around GFC. How to drop the price without it showing in the stats.

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How interesting that you can simultaneously argue that LVR restrictions are too high for first home buyers, and also that any FHB with only a small deposit doesn't deserve a house. Do you think they need a sizable deposit or not?

Also bear in mind, the amount of capital you have accrued isn't proportional to your earning power, especially for young people. I'd have thought this was obvious.

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What's obvious is that MAN2, a property investor, isn't all that clued up. Which may well be the fundamental issue with the current market.

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Servicing requirements aren't the same as deposit requirements. It comes down to income v debt. 5% deposit on a $500k house would still only leave you servicing $475k, whereas a "good" deposit of 20% on a $1m house will leave you servicing $800k.

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No. You. Are. Wrong.
http://www.rbnz.govt.nz/financial-stability/loan-to-valuation-ratio-res…
Or, more charitably, perhaps you don't understand the rules.

Banks can lend 10% of the new loans to OO borrowers with

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I agree with THE MAN 2 and that LVRs will be modified for FHBs. If house prices drop a bit in West Auckland many may still not be able to buy because of the restrictions. This would be a shame because West Auckland is really up and coming now the motorways are improved and with the new Waterview tunnel. West Auckland is becoming the new Central Auckland. Get in while you can. Gosh I am sounding like an RE agent now.

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Yes plus the East West Connections. Get in quick and no, I am not a RE agent either LOL

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Interest.co.nz are you going to provide the complete picture anytime soon..... auction results on their own paint an incomplete picture of market activity.... or are you just trying to pander to the property bears on your blog?

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I was under the impression they posted most relevant data, all the property reports + price indices that I'm aware of. What am I/we missing out on?

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If the LVRs get modified or removed then the prices will just go up by the same proportion. Plus anyway, the banks can lend 20% outside of the LVR limits - which lending is going to the FHBers (from what I have read on squirrel).

LVRs are FHBers best ally. Even if they don't know it. Lots of people with vested interests prepared to fight the LVRs on the FHBer's 'behalf'.
Prices are just too high, sellers

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FYI - it's 10%, not 20%. But there's also newbuilds which are exempt. But you're right. People think the LVR restrictions hit FHB, when actually it has helped, not least of all to pausing the rapid increase for a bit.

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Agreed. Some investors seem to have decided that 'this is hurting first home buyers' is a better argument than 'this is hurting investors' when trying to protect their own interests.

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Greg, I have great respect for you but your headline is misleading. Yes, 12% sold in West Auckland but 62% sold at an Shortland St auction. Be fair and neutral and report, in the headline on the home page, that 36% sold overall.

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the other day the headline says 100% sales achieved which was also misleading as it really meant that the 1 property offered was sold

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Kiwis shift house far too often and when they do it can be for the most ridiculous reasons. Bought the house I'm in because "The back yard wasn't big enough for the kids" and Long Bay regional park is 900m down the road. What you will find is people either get what they want for it or they will simply hold. Lets face it how many people actually HAVE to sell the house ? its a want not a need. Unless you get caught out with rising interest rates just stay where you are and wait for the market to start going up again.

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That's right Carlos67, and it's the reason why there won't be a housing "crash" (i.e over 20% down) but rather a dip. Yes some people will HAVE to sell but most will just sit and not sell

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How do you reconcile that with the fact that other countries have had full on crashes (>20%)? Do you think Kiwis are fundamentally different?

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@ yvil... how about the fact that over 40% of all mortgages written last year in AKL were for "investors"...so will they just keep topping up the negative cash-flow rental property in an environment of increasing interest rates and no capital gains?

Sure - Some will have enough cash to ride it out but pretty sure many will decide to bail before it gets ugly....

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Sorry I agree with mfd; We can't expect that Kiwi residents or even new immigrants can continue to pay the extremely high prices that we've been seeing late last year. Not when the top end buyers have quite clearly flown the coop (Or are at least had the breaks thrown on them by their own Government).

There's too big a gap between peoples wages and massively over inflated house prices. Those properties that are currently in the million plus mark are starting to deflate as their simply isn't the buyers for them any more. That will be very likely to continue for the foreseeable future.

Also if you look at the property listings in Barfoots figures, the highest number of listing are from Northshore and East Cost which were the most popular areas for Overseas Investors, so it shows that it is the Investors trying to ditch their properties and cash up.

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Nothing will change until Foreign Buyers are either banned or slapped with a large enough stamp duty 15%+ to put them off.
(Foreign buyers include resident and non resident ie people that are not citizens or Permanent Residents)

Labours Policy of banning foreign Buyers buying existing homes is exactly what is needed. So no more Foreign Student Buyers or Temp Worker buyers. Personally I prefer a stamp duty as NZ could use the extra money to pay for the infrastructure needs.

Another good policy would be a stamp duty on Investors buying existing properties .. say 15%.

That will stop any flipping dead in its tracks and encourage investment in New Supply not simply change of ownership of existing properties which does ZERO for supply.

Both these policies will help first home buyers.....
Decrease DEMAND
Increase/Encourage SUPPLY

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Hey Joe, Read this article; it just goes to prove what influence foreign buyers have on overseas property markets!

Vancouver’s Foreign Buyer Tax Didn’t Stop Real Estate Sales, China Did
https://betterdwelling.com/city/vancouver/vancouvers-foreign-buyer-tax-…

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Interesting, though others have noted that Chinese buying hasn't slowed to the same degree in other cities, and other articles have suggested Chinese buyers are transferring away from Vancouver to other cities instead.

Regardless, Auckland needs money for infrastructure - there's plenty more upside in collecting a 15-20% stamp duty on foreign purchases to put toward this, especially given the likes of Vancouver's suburbs of mansions filled with residents declaring poverty level local incomes, thus contributing very little tax while consuming free healthcare and education.

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Any solution to start - can only start with change of government.

This election National is so over confident in their arrogance that will only realise it after the event. Good for NZ, let them be in illusion.

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Rich, the house is in a new subdivision in the south west of Christchurch and a good area.
There are a ton of these smallish new homes in the subdivisions on basically half size sections and that is how they can price them around 500k as the developers are getting 2 onto a normal size section.
They are fine for young couples or elder people that dont want or need outside room, but not much cop for families.
Haven't got a problem at all with anyone buying property if they can afford it and they want to own.
Repayments would be more than renting but at least they are on the property ladder which is better than renting.
Would I personally pay 500k for it as an investment rental?
Not on your nelly!!!!
Negatively geared and not a lot of upside as there are so many of this type around!
Far better value around but then some people like new homes rather than value!!!!

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Longer term prospects for Auckland residential property are looking particularly good.

In the short term, anything could happen. No doubt a few speculators will do it hard in the current market. But that's what risk-takers need to accept.

Those who adopt a longer term position with their property portfolios and emphasise location, while keeping their debt manageable, are in the least-risk position.

Always good to hold onto well-located real estate.

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