Bayleys sold just under half at their latest auctions in Auckland and Matamata

This house on a lifestyle block at Matamata sold for $845,000.

Bayleys Real Estate sold nine of the 22 residential properties the agency auctioned last week, giving a sales clearance rate of 41%.

At the Auckland auctions, seven of the 18 properties marketed for auction were sold and at the Matamata auction two of the five auction properties changed hands.

The Auckland sales included a three bedroom house at Glendowie that went for exactly $1 million, another in Hillsborough that fetched $875,000, a two bedroom townhouse in Mairangi Bay that sold for $890,000 and a three bedroom house in Te Atatu South that went for $635,000.

At the Matamata auction, a three bedroom house that was described as being "in need of repair" was sold at mortgagee auction for $185,000 and a large four bedroom house on a 5000 square metre lifestyle block bordering the local golf course went for $845,000.

The full results from both auctions are available on our Auction Results page.

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79 Comments

The mortgagee auction sounds painful but it's good to hear people are getting better prices now.

Last sold in 2009 for $214,000. Over-leveraged to buy an Auckland property, perhaps?

The homes.co.nz estimate is $370,000 so $185,000 sounds quite a bargain. I imagine a handy couple would need to spend less than 50k to bring it up to scratch, if that. Commutable to Hamilton with a bus service as well. #GoodBuy!

Yep there's going to be more and more good buys in the next two to three years.

"in need of repair" = Euphemism for "It has unconsented 'improvements' that need to be removed before the Council will give it a Code of Compliance" ?

or meth contaminated, no inside photos, not much effort by the RE to sell
https://www.bayleys.co.nz/Listing/Waikato/Matamata[_]Piako/Matamata/812910

I totally missed that point when I looked at the listing! There would have to be serious damage to not even show any interior shots.

Mortgagee sales usually don't have interior photo's, the sale has been arranged by the bank so many owners/tenants react badly when an agent turns up asking if they can take photo's.

I didn't know that. Thanks Zippy :)

I like the use of 'return to its former glory' real estate agent bollocks-speak referring to a slumping Keith Hay, as if it's Hampton Court.

Yes prices are starting to come down and be more realistic in the more expensive areas. I just had a look at the property in St Heliers, Auckland; 18A Modena Crescent. According to the Home NZ website it should have sold for around $1,190,000 or a high of $1,275,000. But still sold for just on the 1mill mark and it's in fairly good condition.

It will be very interesting to see what happens in the next six months to a year.

It is a leaky home.

Indeed around a million is a very good price for the seller. It's the price of the section really.

Why do you say it's a "leaky home" ?

While it is monolithic cladding it might have been built according to manufacturers specifications

https://www.bayleys.co.nz/Listing/Auckland/Auckland/St-Heliers/1800255

It doesn't look ideal for Auckland weather conditions.

I've noticed that even solid concrete homes get tarred with the leaky brush and buyers aren't quite so keen because it looks like one. I'm amazed that builders still clad new builds with monolithic sheets. Brick or wood with a roof that overhangs the walls is the only way to go.

have a close look at the photos you can see tell tale signs.
stains done the sides under the sills, warping and blotchy cladding.
bad design for NZ conditions, might work in a mostly dry climate but limited protection for water getting in through joins after a period of time through wear and tear.
my guess also no cavities and can see no vents at the base to let moisture drain away

In fact, the mainstream media, in reviewing the evidence, is reporting that Auckland house prices are stubbornly refusing to come down.

The Dept of Statistics last week released a report which shows that Auckland is the fastest growing region in NZ. Auckland now accounts for a staggering 46 per can't of the country's population growth.

In less than 3 years, Auckland's population has grown by 100,000 people. That's equivalent to 100 more people (or about 30 new households) every single day. At this rate, Auckland would reach 2 million people within a decade. Some demographers believe that may, in fact, happen.

To cope with the mammoth population increase, Auckland needs at least 13,000 new houses each year - but is consenting only 10,000 and building a mere 7,000.

This data might go some way to explaining why Auckland house prices have, in fact, fallen by only a small margin over the last 6-7 months despite the huge upswing of 2014-2016 - and why any further falls are likely to be limited.

But the data also suggests that Auckland house prices are likely to increase markedly in the medium/long term.

Notably, overseas sources (e.g. New York and London press) now report Auckland as being a "rising star" in global property markets.

Has Auckland 'really' grown by 100,000 in the last 3 years, in terms of permanent residency?
If roughly 15-20K of each year's net growth was made up of students, then the permanent growth would be way less than 100,000, probably closer to 50K. Obviously some students will stay in NZ, but many will leave after studying.

Whatever way you want to slice it, net growth is still....... net growth.

but then that still completely negates tothepoint's ramble

According to stats.govt.nz Auckland is expected to reach 2 million people in 2033. Yes, that is substantial growth. It is not quite the growth rate that you are claiming, as your growth rate claim is 50% higher than the stats.govt.nz population projection estimates. What source(s) are you using for your growth estimates?

Have a read of the article currently featured in interest.co.nz entitled, "How Much Housing is Overpriced". The author is the well known "people's economist", Dr Brian Easton, who wrote the highly regarded "Economy" column in The Listener for several decades. He concludes:

"Whatever the case, the indications are that – aside from traumatic economic and financial events such as a massive rise in unemployment – the nominal house price will be sticky downward because most homeowners will not want to move if prices fall."

I reckon Dr Easton will be proven correct.

The "sticky downward" description relates to the rate of change of prices. My expectation is for a relatively slow unwind of prices, on the order of 0.5 - 1% per month. The prices may be sticky, but not inelastic. I'm thinking molasses rather than epoxy...

He may, or may not, be right. Time will tell. House price crashes have occurred in the past, internationally, without massive rises in unemployment.
But we can't assume a big drop in house prices, that's for sure.
So we need policy to address that, urgently.
I think Labour are on the right track with reducing immigrant numbers, and Kiwibuild.

@ Fritz; Humm... Yes I think you're right. I've just looked at the Toronto who also experienced a spike in overseas investors and are now experiencing a sizable decline.

Affluent Toronto Suburb Sees Largest Real Estate Price Drop Since 2008
https://betterdwelling.com/city/toronto/affluent-toronto-suburb-sees-lar...

Hi CJ099

Toronto's overseas investors are now heading to Auckland........ (-;

Hi tothepoint,

In case you've missed it and here's the 'slam dunk' as the American's like to say; The top end investor that tied all the gates way cites together are mainly from Asia (Mostly mainland China). Now that the capital flight restrictions are in place (Since Jan this year) that's blocked them and they've switched to other closer to home investments.

Hence why Auckland, Canada, Australia, London are now experiencing significant property sales and price declines. And this is also why Auckland's property auction results are so pitiful.

So yes it IS extremely relevant that these top end investors are now gone! Basically there's no one left to keep aloft those multi million dollar price tags, sad isn't it (NOT).

Here's some evidence for you:-

Better Dwelling article: This Week’s Top Stories: China’s Real Estate Spree Is Over, 3.1 Million US Mortgages Are Underwater, and Toronto is full of Rich Families

Global: China’s Massive International Real Estate Buying Spree Is Officially Dead

Last year Mainland Chinese buyers became the largest buyers of international real estate. Up and coming markets like Toronto, Auckland, and Sydney saw significant price increases as a result. Over excited locals sent prices soaring as they took it as a sign of international validation. Then China rolled out new capital controls in January 2017.

The result? Those same up and coming markets around the world are starting to note an absence of Mainland buyers. Now those same overexcited locals that sent prices soaring hoping to cash in on their city’s newfound status as a global hub, are trying to figure out how much their homes are worth. Auckland is complaining that their markets are cooling faster than they anticipated. Australia’s leading property analyst is telling locals to prepare for a 10% decline. Toronto is seeing listings soar, and buyers are just sitting on the sidelines.

https://betterdwelling.com/this-weeks-top-stories-chinas-real-estate-spr...

I see apartments are going up in price in Toronto.

Hi Zachary,

You are absolutely correct. I also read the reference that CJ099's provided (above).

Can't understand why CJ099 didn't draw that to our attention?? (-;

The only reason why apartments are being purchased in Toronto are because they're affordable by the locals, same has been happening here. Though with the recent news of London's apartment building blaze, I think most people will think twice about safety before renting or investing an apartment.

BBC: London fire: Protesters storm Kensington town hall
Angry protesters demanded answers following the west London blaze which killed more than 30 people.

http://www.bbc.com/news/av/uk-40306522/london-fire-protesters-storm-kens...

BBC: London fire: A visual guide to what happened at Grenfell Tower
http://www.bbc.com/news/uk-40301289

Yeah Zachary, you're still not seeing the bigger picture are you? Did you miss the article that mentioned that Canada's BC has lost $10 Billion in property sales?

See, it's not the keeping prices up that matters. It is the sale volumes that matter. Really any Investor worth their salt would know that.

Article: BC Real Estate Sales Fall By Over $10 Billion YTD
https://betterdwelling.com/bc-real-estate-sales-fall-by-over-10-billion-...

Quote: Any doubts that Canadian real estate is cooler than last year was just confirmed. The latest stats from the BC Real Estate Association (BCREA) show significant declines in the real estate crazed province. BCREA numbers show the province is still seeing higher prices, but huge drops in both sales and dollar volume.

Dollar Volume of Sales Showed A 4% Decline
Last month showed a significant decline in total dollar volume across the province. Residential sales totalled $9.33 billion, a 4% decline from the same month last year. There were 12,402 sales, a decline of 7.9%. It’s safe to say that the decline in sales had a direct impact on the total dollar volume dropping.
Year To Date This Adds Up To $10 Billion Less Than Last Year.

The monthly decline of just 4% doesn’t seem like much, but when 2017 is looked at as a whole it reveals a much cooler market. If dollar volumes continue to decline, expect prices to follow.

I'm not convinced. An awful lot of money managed to escape from China and is permanently in the West. It doesn't need a constant stream of cash to keep the prices stable and the buyers will be reluctant to sell. China is not the only up and coming country with citizens eager to get into Western countries. I would urge people to snap up a bargain if one comes along before the next onslaught from India or Indonesia or somewhere.

Just show me the evidence Zach, put you're money where your mouth is. Haven't you noticed that the Western World is very much in debt.

And regarding China's money (Who are also in a huge amount of debt); well its not escaping it way to little NZ is it, judging by the latest auction results.

I don't think it is a comment that needs evidence particularly. We know a lot of money came out of China in recent years and that India and other places are growing economically. Let's just say it is a gut feeling. Chinese didn't just lose interest, they had to be stopped by their government before they sucked China dry with their enthusiasm for property in English speaking lands. They want prime property, not gold or shares or other investments.

@Zachary; Actually no you do need to show evidence when it comes to investment streams.

And have you forgotten China's capital flight restrictions which are proving to be very effective at stopping the flow of credit money out of China. And as far as investing in English speaking lands, well they're more likely to opt to invest in those cities with a much more solid infrastructure such as Vancouver, where Chinese Buyers even budgeted for the extra 15% Foreign Buyers Tax, though again the Capital Flight restrictions have had a significant impact there too.

Here I'm happy to remind you about China's Capital Flight restrictions. There was a excellent article recently on this site about it as well.

Interest Article: China's credit rating downgrade underlines need for authorities to keep preventing Chinese from investing their savings overseas, Asia expert says.

https://www.interest.co.nz/business/88003/chinas-credit-rating-downgrade...

Forbes article: China's Crackdown On Capital Flight Is Claiming Some Of Its First (And Biggest) Victims
https://www.forbes.com/sites/ywang/2017/03/16/chinas-crackdown-on-capita...

Better Dwelling article: China’s Massive International Real Estate Buying Spree Is Officially Dead
https://betterdwelling.com/chinas-massive-international-real-estate-buyi...

Remember that China is currently transitioning from being an third world manufacturing economy to being a modern Technology driven economy.

CJ099 I don't have to do anything. It is my gut feeling as I stated. Those Chinese that bought will be holding. Buy as soon as you are able to is my advice.

Thank you for admitting that Zachary.

But honestly have you looked in 'Where' a lot of that Chinese money come from in the first place? Most of it was Chinese Government run initiatives where they actively encouraged Business Investors to invest in overseas developments, there's numerous articles on this from Oz to Canada and London.

Some did directly invest in to overseas business projects and a large proportion of that money got siphoned off in to property. And some were cheeky enough to 'game the system' and abscond with their banks money to buy a mansion in Vancouver and else where in the world.

What your gut feeling should be telling you; is what happens when the Chinese Government influences its banks to call in those business loans and mortgages?

Students Own Over $57M Worth Of Ritzy Vancouver Real Estate, Says David Eby
http://www.huffingtonpost.ca/2016/09/15/vancouver-luxury-real-estate-stu...

Go read the Forbes article that I sent you:-

Forbes article: China's Crackdown On Capital Flight Is Claiming Some Of Its First (And Biggest) Victims
https://www.forbes.com/sites/ywang/2017/03/16/chinas-crackdown-on-capita...

Quote from article: Chinese businesses went on a global shopping frenzy last year, buying assets ranging from property to entertainment studios worth hundreds of billions of dollars.

This year, however, foreign executives are unlikely to see Chinese buyers lining up at their doors. Outbound investments and projects are being called off as Beijing’s recent restrictions make it increasingly hard to transfer funds overseas.

Chinese companies take a hit amid crackdown

China started to crack down on foreign investments towards the end of last year, as companies and individuals rushed to invest abroad amid a weaker Chinese economy. To ease pressure on the struggling yuan without burning through the country’s foreign exchange reserve too fast, authorities have implemented a series of capital control measures, including additional procedures for citizens seeking to convert the yuan into foreign currencies and extra vetting of foreign investments worth $5 million or more.

Chinese companies are taking a hit. The latest involves real estate developer Country Garden, which has closed showrooms in China for its flagship $40 billion Forest City housing project in Malaysia. The move was made to “better fit with current foreign exchange policies and regulations,” the company said in a statement. Mainland Chinese represent about 70% of the project’s total buyers so far.

Since January 2017, Chinese are not allowed to send money out from China, unless they want to risk prosecution or jail time. They may be fine this year, but what happens in 2018? And in 2019? If they don't have the local NZ income to keep up with the mortgage, guess what the banks will say?

We're seeing very-high available listings and very-low sales, and we're only halfway through 2017. Trust me, we ain't seen nothing yet.

Yep you're right on the money Rich, that's what I've been trying to point out to Zachary and the others. China has shifted its business development plans to be more internal focused and tech driven. It's going to need its money back to do that type of investment.

I very much appreciate all the articles you have been providing CJ099, it astounds me how our bulls soley focus on local circumstances and are quite happy to ignore the biggest elephant in the room - China's restriction on capital flight since January 2017.

The evidence is out there and Chinese investors are known to exit en masse. People keep saying "barring a global event...." - that's the global event right there, where else are you looking?!?

Thanks Rich and likewise, we need to make our voices heard and bring some sane clarity to this mess. And I can understand people’s refusal to believe that property prices can actually go down, I was the same before the 2008 crash in the UK. Well we tried to warn them, but it’s the First Time Buyers that I’m trying to protect.

The thing that really shocks me, is how some people think it’s ok to completely decouple wages from property prices? And how they've focused prices on top end overseas investors. Do they not realise that a high cost of living causes business to shut down, and that’s a recession that would will be very long and painful to recover from.

I think in a way, we’re quite lucky to have a property price re-correction at this stage. But expecting local buyers to pay the massively over inflated prices simply isn't working. Because they simply don't have that type of money (Or government funded credit stream).

Do we have any figures on how many mortgages are being serviced from overseas and how many are negatively geared? This could be quite a small figure. Do we know if Chinese owners can service a current mortgage with the new restrictions? If a house was rented out then that servicing cost could be quite small.
I see TradeMe listings still trending down this morning.
I think a lot of the Chinese buyers in Auckland are residents.

I don't think this is a comment that needs evidence particularly. A lot of money has come out of China. Let's just say this is a gut feeling.

Hahaha but seriously, I think CJ099 has provided more than enough articles as evidence for this to be true. The fact that listings have skyrocketed also suggest investors are exiting in droves - if you say they can all maintain their mortgage payments then why are there suddenly a lot of listings right now? Like I said, we ain't seen nothing yet - TradeMe listings were 18k back in 2008; i suspect we'll be at that level again by next year

https://m.imgur.com/tIz5dGA

Heh, and how much did Auckland prices fall in 2008?
Burn!

Burn? Are you 12 years old?

Umm... That a bit of a string theory question Zachary. Have a read of this article it might shed some light on your question though this is before China's Capital Flight restrictions that kicked in fully in January this year.

China is also in the process of clamping down on Shadow banking.

And you may want to listen to Rich's gut feeling because I'm getting the same worry pains. The more I look at the evidence, the more obvious things become (Basically, they want their money back).

BBC article: 'Gangster grannies' and China's shadow banking world
http://www.bbc.com/news/business-37114643

"If a house was rented out then that servicing cost could be quite small."

giggle... smirk...

Isn't that the very definition of negatively geared? I kinda thought that if one did not get a net income from renting, then the property was negatively geared...

Trademe listings trending down going into the doldrums of winter, what a surprise (not). Trademe listings at a level close to the peak of summer when going into the doldrums of winter, now that IS a surprise.

I believe you are all wrong. Actual property holds a very special place in the hearts of many Chinese. It was after all one of the main causes of their revolution.
Not sure why there is a giggle and a smirk. Getting 200 bucks out a month is probably quite easy. It's a long term plan. Westerners have gotten used to thinking only twelve months ahead while others are planning for decades or even centuries.

If you want to say that were wrong Zachary then you should at least have the guts to prove it.

And by the way; most of the young Kiwi second gen Chinese that I work with (Plus friends) can't afford to buy in Auckland either since the capital flight restrictions. They're also realize what National has been doing has created a false economy that's simply not sustainable and risks their jobs plus the NZ economy, they're not happy about that and neither am I.

Interesting... I plan for the fall/winter of my timespan. I very much see that much of my cohorts plan for the upcoming weekend. These plans include using their homes as an ATM to finance their high living lifestyle, with the flash cars, fancy holidays, etc. I saw how those plans worked out a decade ago in the US. I suspect that there are similar results forthcoming in Auckland.

The last time I visited Auckland I was rather shocked as to the percentage of businesses catering to home building and home improvement. This very much reminded me of visiting Phoenix about 12 years ago. The majority of businesses in a metropolitan area should not be about home improvement... well, if sustainable business is desired. If the goal is to maximize positive feedback until absolute limits are encountered, then all is well, no worries!

Hi CJ099,

None of the places you mention have a set of circumstances (including all-important demographics) anything like those of Auckland.

As well-informed observers are now commenting, despite the surge over 2014-2016, Auckland house prices are proving remarkably resilient.

Olly Newland doesn't seem that optimistic

Hi Tothepoint,

Sorry but you're talking jibberish, have you got an article to clarify your statement. I've highlighting the foreign buyers that propped up the Auckland market that have now gone and the impact that has had. I've posted article that prove that, where's your evidence?

Riddle me this. Why are Auckland median house prices up 7.5% since January, if indeed prices are crashing? Why if China capital controls in January are causing a crash, do house prices still keep increasing? Maybe if they declined by 10% you could declare victory and buy at a price last seen in March last year, but if they don't what will become of your neurosis?

It's not really a riddle - lower valued houses are not selling as much, so the higher valued house sales are bringing the median prices up. That's expected in situations like this and is actually very telling that a crash is coming. Ask Yankiwi who has provided first hand accounts in other articles.

Once price expectations for higher valued houses go down too, that's when your beloved median prices follow. So yeah, not really a riddle, just plain common sense.

Lower valued homes aren't selling as fast because the required deposit has doubled for investors, who make up the vast majority of the market in that sector. Even so, prices in that sector are still increasing. This is not the crash you are looking for.

It hasn't even been a full 6 months and we're already seeing record-high available houses for sale (supply) and record-low buying (demand). Prices don't go down instantenously, but give it some time and you'll get that 10% price decrease you are looking for.

If by "record", you mean the highest supply in 5 years, and the lowest demand for 5 years and a whopping 40 days sell which has been unheard of in the past 5 years, then yes it is all "record." If however you think this is something new under the sun, you should look back to the last time people were claiming it was all going to crash, back in 2011. I at least have learned something since those bad old days.

Yes, that's exactly what I meant by "record". I thought that was pretty obvious? Context clues, buddy, context clues...

Words have meaning, and their meaning doesn't change ;)

HUH?!?!?! Words have multiple meanings and can be used interchangeably, depending on context. I think everyone who read what I wrote had enough comprehension to understand exactly what I meant and do not see the need to nitpick. Only 12 year olds resort to that type of tactic, not even tothepoint would stoop that low.

You are literally the dumbest poster I've ever come across here at interest.co.nz. You do not contribute anything of substance and talking to you is like talking to a child.

Please stop replying to me.

Heh, this is the guy who calls house price rises a crash, and thinks averages are records. I can see why you are upset.

Note to self: don't reply to trolls

Evidence for that assertion?
I don't think so.

Hi Fritz,

The evidence is plentiful.

For instance, apartment prices (median and average) in both Wellington and Auckland have actually increased significantly over the last few weeks.

There's absolutely no evidence of a major "correction" in housing prices anywhere in NZ. And that's what the mainstream media is reporting. The Dominion Post (Wellington newspaper) published a headline article on this just a few days ago, based on its own investigations.

What's becoming clear is that the recent pronounced upswing was not just cyclical: there's a major structural shift underway. And the structural factors are not going to vanish.

Hi tothepoint,

To quote you: "The evidence is plentiful". PROVE IT!

We can all see the auction results, we can all see that sales have dropped off a cliff.
And prices are stating to slip downwards already.

Hi CJ099

You've been pointed to the evidence......

A crash is most unlikely. The passage of time will prove it.

Wrong conclusion: I suggest you read the articles that I posted again, they're quite clear about what's happening with a market correction.

Ted

@tothepoint

Is that you Ted? That's what Ted use to tell us that the Chinese Investors were on their way. (-;

Sorry CJ099, but you've got the wrong person.

Grasping at straws again!

Suggest you take the rest of the night off and find somewhere nice to chill out.

HI Tothepoint,

LOL, no proving you wrong is far to much fun! :P

I see you still haven't provided any evidence to support your claims that property prices will go up in Auckland.
Still waiting........

Tothepoint IS Ted ... nice work CJ. Ive been thinking this for a while.

Tothepoint has quite a different writing style to Ted.

I strongly disagree that tothepoint is Ted #JeSuisCharlie #IAmCharlie

@JohnSmith, Yes you could well be right about that. :)

Ran along to the golf club by the airport. Auction day. 6 properties.
3 withdrawn prior.
2 passed in, not sold on the day.
1 sold (a ressi wreck in mixed use zone).

I had another read through on the latest REINZ report and versus focusing on price the concerning piece for Auckland in my opinion is inventory (up 2814 houses / 47% year on year) and actual sales (down 27%). These are leading indicators for what price will do as price typically lags supply/inventory changes. Now I do do hear what some other commentators say about the fundamentals of immigration driven demand and 2800 houses won't plug the hole so prices have to go up. But the scary social implications are people can't buy high priced houses that they can't finance (lending restrictions) nor service mortgages they can't afford (incomes not keeping pace with house prices in rising interest rate environment). To me fundamentally the best outcome would be a cooled/level market for a couple of years to 1. Let supply catch up and 2. Let income catch up. However to do this in my opinion you need to rope in demand and that is done by sensibly trimming immigration as to not stall the economy. I lived through the recent US crash and I wouldn't wish it on NZ as the social damage was immense.

News from the "coalface".

I quote from Leo Chin's Market Update received yesterday.

It certainly feels like a different market compared to late last year. All indicators point to approximately a 10% drop in value and it is much harder to get buyers to commit to a property.

He's a Barfoot and Thompson agent and markets apartments in central Auckland City