Auction numbers remain low but the sales rate edges up as vendors get more realistic on price

Property

Auction numbers remain low, but there was an overall sales rate of 46% at the latest auctions

29th Jun 19, 6:31am by Greg Ninness

Auction activity continues to bounce along the bottom as a chilly winter wind blows across the market.

Interest.co.nz monitored 153 residential auction sales in the week from July 17-23, compared to 166 in the week from June 10-16 and 137 in the week of June 3-9.

However while the number of properties going to auction remains weak, the sales rate was relatively firmer compared to the previous few weeks.

In the Auckland market, where auction activity is greatest, 44% of the properties marketed for auction were sold, while in the rest of the country excluding Auckland the sales rate was 51%.

Where the selling prices of properties that sold could be matched with their rating valuations (RVs), 57% sold for more than their RVs, 39% sold for less and 4% sold for the same as their RVs.

In the Auckland market 46% sold for more than their RVs, 51% sold for less and 3% sold for the same as their RVs.

There has also been a reduction in the number of properties withdrawn from sale or had their auction dates postponed during the marketing process. Of all the auctions monitored by interest.co.nz during the week, only one was withdrawn from sale and none had its auction postponed.

The latest numbers suggest that while auction activity remains subdued, vendors may be adjusting their price expectations to more realistic levels and agencies are more likely to only be bringing to auction those properties that have at least a reasonable chance of selling on the day, otherwise the exercise could be a waste of time.

Details of the individual properties offered at the auctions monitored by interest.co.nz are available on our Residential Auction Results page.

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44 Comments

by Retired-Poppy | 29th Jun 19, 11:19am 1561763952

Finally, some common sense and realism prevailing in this weak buyers market. Come spring, vendors who already pulled their listing, will only return and face the the cost of their denial. If its tastefully renovated, had heaps of bucks thrown at it, its more likely to shift (especially here in Auckland)

The stark fact remains, the traditional support base that debt fueled speculators foolishly took for granted, has fallen away (especially in the upper quartile). Their anxiety is very real and under the curcunstances, entirely understandable when they're the last ones ledt "holding the baby"

by Pragmatist | 29th Jun 19, 8:47am 1561754856

" If its tastefully renovated, had heaps of bucks thrown at it, its more likely to shift (especially here in Auckland"

So you don't think 2/6A Kallu Cres is going to start a bidding war and go for millions?
https://ponsonby.ljhooker.co.nz/ASFGUK/2_6a-kallu-crescent-mount-roskill

by tothepoint - d… | 30th Jun 19, 12:06am 1561810016

Recent economic events suggest that asset prices in NZ might well trend upward in the short term. The sharemarket seems to think so.

Notably, Central Banks across the world are leaning further towards lower interest rates - and the RBNZ has indicated it will follow.

Don't be too surprised if house prices start to climb a bit.........

TTP

by Retired-Poppy | 29th Jun 19, 3:17pm 1561778230

Hmmm, cheap money fixes all the ailments of rampant speculation does it? I'd say it delays the inevitable and only steepens the price. One only has to look at Central Banks deploying depression era policies just to keep it all afloat to realise this. There are more economic suprises ahead. Central banks have limited buffers so Its foolish to think they are always supportive of asset prices. If and when it all falls, it will likely fall spectacularly the longer they keep can kicking.

REA-TTP, I suggest you read the John Maulden series published on this site. If you are right and house prices do trend upwards in the short term, what are you predicting will happen in the medium/long term? Will your response be reassuring to FHB's?

by Houseworks | 29th Jun 19, 3:06pm 1561777582

You are wound up today Retired Poppy, out of the wrong side of the bed or just still in bed?

by Retired-Poppy | 29th Jun 19, 3:23pm 1561778586

... Is this all you're capable of contributing? I'm not long home after five hours volunteering at a local Hospice. I'm more into helping others that are bed ridden.

by Houseworks | 29th Jun 19, 3:32pm 1561779155

I thought that volunteering was good for the soul but you are frequently angry. TTP has already told you his medium term position. Did you forget or you just want to relitigate.

by Retired-Poppy | 29th Jun 19, 4:21pm 1561782068

Why is it that when someone advocates transparency, you label it "anger"? I know Shoreman (another Spruiker) frequently labled me narcissistic and tried to have me banned for it. Humour aside, you're right, volunteering is good for the soul, I suggest you try it. Your tenant and family might notice a positive difference in you. First and foremost you won't automatically label well meaning people as "angry" lol

I'm sure REA-TTP, is quite capable of replying without your help. Unless for some reason you think he cant/won't. Maybe it's because you're one and the same person? It would explain lots if you were.....

Enjoy the rest of your weekend Houseworks, I've got more rewarding tasks (lawns to mow) on this fine day(^o^)

by tothepoint - d… | 30th Jun 19, 12:08am 1561810110

Hi Retired-Poppy,

As long as you keep misleading and deceiving first home buyers, they’re bound to keep ignoring you.

First home buyers are astute enough: they’re aware of how shambolic your predictions and advice have turned out to be over the last several years.

If you can’t offer something credible, Retired-Poppy, then it’s time you shuffled off.

TTP

by Retired-Poppy | 29th Jun 19, 5:21pm 1561785696

REA-TTP, in response to other questions testing your foresight, you've levelled this "noise" at me several times already. Now, just answer the question :)

"if you are right and house prices do trend upwards in the short term, what are you predicting will happen in the medium/long term?

I'm betting you'll evade this question like all my previous ones? Like Yvil, you're lightening quick to question the credibility of others yet you both were predictably absent when invited to post your NY 2019 predictions. See here; https://www.interest.co.nz/news/97512/will-current-prosperity-last-will…

Spineless is one way of describing it ;-)

by tothepoint - d… | 29th Jun 19, 10:03pm 1561802638

Hi Retired-Poppy,

Yet again, you misquote what I’ve said.

I have NOT said that house prices will trend upwards in the short run.

I have merely said, “Don’t be too surprised if house prices start to climb a bit.” They may, or they may not........

If you persist in misrepresenting what people say, then you have no useful role here.

As before, it’s time you shuffled off.

TTP

by Retired-Poppy | 29th Jun 19, 6:42pm 1561790542

Ha-ha-ha-ha :) I was right, appears you haven't the spine nor the foresight to address my question! I guess you still expect first time buyers to consider your outlook as "well informed" before committing?

by CJ099 | 30th Jun 19, 11:00am 1561849234

@Ttp, I'm sure most FTB's have enough sense to look at the auction results and how prices are sliding if they're on this website.

by Retired-Poppy | 30th Jun 19, 12:07pm 1561853262

CJ099, I agree. Weakness is evident when only the agent and nosey neighbours turn up at open homes followed by the absence of genuine bids on auction day.

Auckland especially is a genuine buyers market, full of sweating speculators. There's just no need for FTB's to rush in.

by NorthernLights | 1st Jul 19, 3:09pm 1561950560

Well done Retired Poppy
Unlike the spruiking class you choose to do good deeds

by mikekirk29 | 29th Jun 19, 9:25am 1561757159

Excellent remarks

by mikekirk29 | 29th Jun 19, 9:24am 1561757096

Just spoke to my hairdresser on Hibiscus Coast . At her house auction got zero bids and other 3 failed to get sold also. Auctions on HC are 5% of total sales method. It was 17% a year ago

by Yvil | 29th Jun 19, 3:33pm 1561779228

Greg Niness, Interest should stop publishing auction results, it seems mikerirk29's hairdresser has better data

by Glitzy | 29th Jun 19, 11:22pm 1561807354

Actually interest should write a few articles using data similar to Mike's analysis illustrating the reduced sales volumes at the upper end of the Auckland and Wellington markets.

Distressingly, I saw no less than 12 adverts for new builds in Auckland on my Facebook account as I scrolled down ... A more sceptical person than myself may think there was a glut of unsold new homes.

by CJ099 | 29th Jun 19, 9:36am 1561757791

Yes folks without that steady stream of billions of dollars hot money from China, of course prices are going to slide in the overinflated house prices areas. But take heart as it's not just us over in NZ that have been effected, so too has Canada and Australia who are still trying to figure out when their prices will bottom out too??

Remember if a wage earners can't afford you're property then you're going to find it much harder to shift it.

by alittle | 29th Jun 19, 10:09am 1561759748

Correct money laundering has stopped and seriously how many FHB earning in NZ (Have No Unoffical money) can afford to pay million dollar Plus in Auckland.

For the same reason, houses in million dollar plus bracket have taken a hit (10% to 20% minimumm) and now even low end (800s and 700s are now low end :) have started to fall...Domino effect unavoidable and all this is happening despite all time low interest rate - this goes to prove how serious and bad the situation is.

Earnings do not support the house price that was seen in last few years so some sort of correction has to happen - How much is the question ?

by Yvil | 29th Jun 19, 3:37pm 1561779451

Nice stories, just ignore the fact that:
"57% sold for more than their RVs, 39% sold for less and 4% sold for the same as their RVs"

by Pragmatist | 29th Jun 19, 6:54pm 1561791267

ah, typical Yvil tactic, feign ignorance of the fact that previous poster was talking about a particular region (Auckland) then deflect to Nationwide stats. At least I hope you are feigning it..

PS: "In the Auckland market 46% sold for more than their RVs, 51% sold for less and 3% sold for the same as their RVs."

by realterms | 30th Jun 19, 9:05am 1561842324

I think RVs have quite an unfortunate distorting effect. They're often extremely inaccurate. When they're too high, they often give vendors unrealistic expectations and the houses sit on the market for ages. Only when they're accurate, or low, do vendors start out with realistic expectations. Given that auction results only happen if vendors are realistic from the outset, I would think that auction sales relative to RV would always be a bit of a distorting way to look at things.

by fat pat | 30th Jun 19, 8:29pm 1561883347

Just saw this on Zerohedge, talk about pointing out the obvious. Vancouver Housing Unaffordability Due To Foreign Ownership, Chinese Funds, & Migrant Millionaires, Study Says

by RickStrauss | 1st Jul 19, 9:09am 1561928984

It's probably only 3%. Wouldn't be a major factor, anyway. At the end of the day it is what it is and I'm pretty comfortable with it. Snapper.

by Dgm | 29th Jun 19, 10:10am 1561759806

Auckland housing is like a pack of cards, if there is no one left to hold onto them, they are bound to fall.

by stuart786786 | 29th Jun 19, 1:57pm 1561773470

Process has started but is not as fast as it should be for 2 reasons:

1 : Many FHB who had missed the earlier boom and were repenting are so afraid of not loosing out again that are not reading the market correctly and waiting but soon better sense will prevail and all those who are ready to wait and buy sensibly are bound to get more for their deposit. Buy they should but having already missed the bus why the rush to buy specially in falling market as the next boom is still some years away.

2 : Low interest Rates but one should remember that most take loan for 25 or 30 years and this low interest rate will not be forever.

RE Agents are using this fear psychology of FHB and also highlighting low interest rate to extend the budget theirby extending their borrowing and many FHB falls for it BUT for how long ?

by Houseworks | 29th Jun 19, 3:10pm 1561777837

"this low interest rate will not be forever." It will not be forever Stuart786786786786 recurring. Because by next year there will be two more rate cuts

by Pragmatist | 29th Jun 19, 6:55pm 1561791346

Two more cuts and still Auckland prices will be falling. And the rest of the country will be looking a bit shaky by then too.

by Houseworks | 29th Jun 19, 7:30pm 1561793454

Ok so we disagree apparently but if you really believed what you write why do you bother trying to buy a house at the moment. I get why you would (girlfriend wants you to and you want to put down roots would be two reasons).

by Pragmatist | 29th Jun 19, 10:13pm 1561803235

We aren't trying to buy, I'm just watching the market, maybe if something I really like comes up with sane pricing I'll check with the missus.. then the bank..

by Houseworks | 30th Jun 19, 8:39am 1561840780

Whatever it is good luck with it. It is much easier to negotiate hard with a distressed seller and to be selective when the market is in pause as it is in auckland now. Chances are if you really like it, others will as well. Sign a conditional agreement with an out clause for due diligence and finance clause if you want to take a bit of time before committing.

by CJ099 | 30th Jun 19, 9:56am 1561845363

Prices are sliding, so it's worth hanging in there. Sure the banks will likely continue to cut interest rates but that won't be enough to stop the top end of the markets property prices from sliding downwards but it will hopefully be enough to stave off a slow property crash (crash = -20% from 2017 peak price). So it's really depends on what price range you're looking at and where. Here's an example; if you're looking in Auckland then prices aren't likely to fall that much in the low to mid bracket price ranges i.e; below $800k though that depends on other factors such as property condition etc.. That's also dependent on the banks continuing to cut their mortgage rates. Any property above that wage earners price range and prices are likely to slide (The bigger the price the larger the fall). Though if I'm wrong and the majority of properties in the upper bracket continue to sell above the million mark, then it's highly likely that something dodgy is going on such as continued money laundering.

by Voiceofreason | 29th Jun 19, 12:11pm 1561767062

"...vendors may be adjusting their price expectations to more realistic levels and agencies are more likely to only be bringing to auction those properties that have at least a reasonable chance of selling on the day"
The days of selling NZ and Australian housing at auction like paintings at Sotheby's are over, for the foreseeable future. Not enough people in both countries realise it's quite an unusual way to sell housing, and certainly contributed to both bubbles. "By Negotiation" is becoming the norm, and we're realising how crazy the competitive speculation was a few years back.

by Dgm | 29th Jun 19, 12:10pm 1561767017

People paying for less than suboptimal conditions
https://i.stuff.co.nz/life-style/113795238/new-zealand-isnt-a-subtropic…

by Voiceofreason | 29th Jun 19, 12:12pm 1561767146

Yes, poor quality for the conditions, at high prices. It doesn't add up...

by Dgm | 30th Jun 19, 12:27pm 1561854468

Debt debt and more debt..

No one is talking about the Chinese bank that collapsed

by CJ099 | 30th Jun 19, 7:32pm 1561879926

Too scary to think about Dgm. But yes I sense things could unravel quicker that we could contemplate, with all that shadow banking over there. Personal I'm not too worried about China, I'm more worried about Australia and how dependent their markets are on Chinese flow of money to Australia.

by DitchSkipper | 30th Jun 19, 10:22pm 1561890141

TTP, Retired-Poppy, Yvil, etc etc etc
Don't you ever get bored of just having the same conversation over and over again?
It's like watching people make vague and guarded predictions on next week's lotto numbers without actually picking any, and then arguing over who got the closest when none of you had any control over the result, or were even close to picking the numbers anyway.
I think you all need a holiday overseas where it's warm and sunny.
I think you'll all agree that there isn't much happening in the market at the moment, so you won't miss much for the next month or two.
Bon voyage.

by Houseworks | 30th Jun 19, 11:00pm 1561892427

Hi DitchSkip, very good observations by the way. You probably dont realise that the main protagonists are the doomers aka doom and gloom merchants and this is all a game to them. These are people who want to get into the market themselves or their family and they missed out before the last run up (mostly not young entrants) and have now got caught out bigly. They now hope and pray they can talk the market down by spreading fear! Any little negatives are pinpointed and exaggerated while positive trends are ignored. And yes they should take a long holiday

by Ex Expat | 1st Jul 19, 10:13am 1561932803

Must be three or more months since I last posted. Like the missus' womags you'd be hard pressed to guess the date based on the content. CoreLogic has my home at 94.3% of CV. Homes.co.nz has it at 101.7%. The street is full of utes with multiple renovations and new builds underway.

by Dgm | 1st Jul 19, 7:12am 1561921932

You can run, but can't hide..
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…

by Ocelot | 1st Jul 19, 11:44am 1561938299

"...ANZ Bank has brought in a public relations heavyweight to assist with crisis management."

If you can't be in a good healthy functional state, it only matters that you can make people think you are.