Auction volumes are continuing their slide downwards, with interest.co.nz monitoring just 122 auctions in the week from 14-20 July, down from 140 the previous week and 127 the week before that.
Of the 122 marketed for auction over 14-20 July, sales were achieved on 49, giving a sales clearance rate of 40%, compared to 37% the previous week and 44% the week before that.
Of the 60% of properties that weren't sold, two were withdrawn from sale but none had its auction date postponed.
Where the selling prices of properties that sold could be matched with their Rating Valuations (RVs), 57% sold for for more than their RV, 41% sold for less and 2% sold for the same as their RV.
There was very little difference between the Auckland figures and the national figures, with sales achieved on 39% of the properties offered at the Auckland auctions.
Prices were also much of a muchness in Auckland compared to nationally, with 61% of the Auckland properties that sold fetching more than their RVs.
Details of the individual properties at the all of the auctions monitored are available on our residential auction results page.
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26 Comments
..... and this is only half the story as the houses going to auction nowadays are hand selected by the agencies as the most desirable. If the same selection of houses were going to auction that were going two years ago the sales achieved would not even reach 20%. The tipping point has been reached. I am sure glad I don't have a portfolio!
You are glad you haven’t a portfolio?
You would rather work a 9 to 5 job and then retire being supported by the taxpayer, than become financially independent?
Weird!
Sorry, I should have been more clear. I am glad I no longer have a portfolio. I got out a long time ago. It's getting harder and harder to offload bad investment properties. I feel sorry for those who cannot see whats coming and I am surprised that there are so many people in denial on this site. Just don't say you wasn't warned and I will see you in 3 or 4 years at the fast food joint when I will ask you "Can I have fries with that!!!"
Hi FB,
There’s a huge shortage of residential investment properties - of all types - where I live.......
And with yields increasing through sharply rising rents, they are easy enough to sell right now.
TTP
am sure glad I don't have a portfolio! This statement stands true only if you had purchased the propert in last few years...
Roll forward a few years and you might find that's in the last decade.
Average satire account is average
Bottom of the year. Last winter also in Auckland were unseasonal sales jump. They were front running OBB. Hence sales drop month on month will be worse til October. Except in Sept which last year was abysmal making it hard to plumb this year!
One needs to ask why numbers continue to slide.
Clearly we have shifted from a sellers market to a buyers market and this compounded by the winter season.
In a sellers market, auction is clearly the best option in the hope that competing buyers will push the price beyond possible expectations.
In a buyers market, auctions are clearly a less preferable sales method as there is considerable expense in this form of marketing with a lack of competition resulting in no sale or a price less than expectation and setting a lower benchmark for any further negotiation. It is generally going to be only sellers either under pressure to sell with a relatively unique property, or those under a time pressure to do so.
Personally, I aren't reading too much into falling auction numbers. After a near decade of a buoyant market, I see it as having returned to a pre-GFC state with current levels of sales, days to sell etc including seasonal fluctuations being fairly consistent with that.
The best indicator of the future of the market will be the spring period. At the moment the market is holding up fairly well as could be expected for the winter season and I expect the summer spring to be a little more active.
I am not a drowning man clutching at straws, rather one who sees the market - especially in Auckland - as finally returning to a normality two to three years after the market peak. I don't see any evidence of a serious correction, but rather for the next few years it being a flattish market with some minor falls or rises. Here I include Auckland as there are currently continuing drivers there - historically high levels of immigration, falling interest rates, a housing shortage, and high levels of employment. However, either a sudden change (which seems unlikely) in any of these factors, or as is normal, an event such as a signifcant downturn in the local economy or some external event would change the situation. While the outlook is for a global economic slow down, this would have to be servere as I think that the local economy is able to withstand the full effects of much of the slowdown. In comparison, Australia with its dependency of raw materials such as iron ore would be more seriously affected.
Many time RE agent choose the auction mode in this market is to make the vendor aware of the true value (If the vendor is expecting 1.1 million and they give true feedback of $950000 in best scenario - will lose the listing) and also it is Vendors money most of the time that is been wasted in marketing, so who cares as long as RE agents gets a listing.
Noted that selling prices are holding throughout the country: most often exceeding rateable value.
Nonetheless, many commentators now believe there will be a significant lift in house prices over the next year or so........
TTP
REA-TTP, after being repeatedly pressed for factual evidence by several commentators (me included), it's noteworthy that you've toned down your predictions from implying"bull runs" and "upswings"are coming yourself to suggesting other commentators believe there will be a" significant uplift in the next year or so". Perhaps you've begun hedging your bets so to obsolve yourself should the real downturn begin. It's obvious you're prepared to perform yet another flip/flop should the need arise. Maybe you should have stood by your original Feb 2017 (-15%) comment after all?
Hi Retired-Poppy,
I have never attempted to predict the timing of the next housing market “bull-run”. Only that a bull-run will happen again.
But I have noted that according to a growing number of commentators, the housing market may experience a significant upswing/uplift in prices over the next year or so.
Finally - and as you well know - I changed my position in April 2017 when it became clear to me that house prices would show no dramatic fall. As it transpires, I’ve been correct.
As you persist in misleading and deceiving people here, I am thinking of referring to you in future as “Bare-faced Liar”.
TTP
REA-TTP, ok, I accept that your angry at being sprung several times by me. At the end of the day though, you are merely an individual who uses weasel words in a quest to generate "misinterpretations" then you try shooting those who question them. Only when presented with factual evidence of your miss-steps have you owned up and as you referred to it "taken it on the chin". You simply haven't had a choice. Those who label others as liars are deflecting what they are unable to face themselves. Call me names, it's obviously therapeutic for you ;-)
Hi Bare-faced Liar,
You have been shown to be incorrect and to have lied here on many occasions......
How many times have you taken it on the chin - and apologised?
TTP
alittle. Absolutely correct.RE agents push for auctions cos, amongst others, they get the vendors to cough out upfront a few grand for marketing,advertising. If the property does not sell at auction,who cares?Except the vendors who are out of pocket.The RE agents of course have got themselves nicely covered.
Sell is achieved only when the vendor as they say " Is ready to meet the market".
A free standing - 4 bedroom / 858 sqmt house listed in sunnyhill was sold within a week. Has the market changed ?
https://www.oneroof.co.nz/estimate/11-trust-place-sunnyhills-auckland-m…
Someone will argue that the market has changed as the house was sold within a week of its listing but the reality is that the vendor was a serious seller with realistic expectation and took the best offer of Low to Mid 900. CV of $1075000 and even if it went for $950000 is a fall and though this sell will not be highlighted by RE Agent like, earlier they use to do when a house worth $950000 use to go for $1.2 Million or 1.1Million as will be highlighted to market/ lift the price of other properties in that street/area and were succesfull also.
Similarly now it will be the other way round and this is not one off but many similar houses.
And am taking about good area with good school zone and is in demand by Asian population (if I use the true Ch.. word, may be termed as racist). Will not be surprised if the house has still been purchased by one of them.
Domino effect is inevetiable and also housing market runs on sentiments supported by speculators/money laundering and with Foreign Buyer Ban and money Laundering Act - very hard in near future for the market to jump up. Besides ecenomy cycle will also be in play but luckily the interest rates are very low which is slightly supporting the market as a result speed of the fall may be slow but unavoidable.
In the first round, Auckland house price of million dollar Plus house have definitely fallen by 10% to 15% and may be will have another round of similar fall ( After stabilizing for a while and in this stage, the units/low value houses start to fall, which has started - Good 3 Bedroom Unit with internal garage in halfmoon bay area, having a CV of High 800s which ideally would have fetch Early to mid 800s is asking High 700s and may go for near mid 700s) .
Looking at all the sold houses (rather than a couple of hand picked ones):
"Where the selling prices of properties that sold could be matched with their Rating Valuations (RVs), 57% sold for for more than their RV, 41% sold for less and 2% sold for the same as their RV"
The one important missing piece of information there is on how many houses the prices were able to be matched.
Glide slope is keeping some momentum but engines are off. How long relative altitude will be maintained is anyones guess. Banks are about to have to have more of their money on the line. I wonder which Bank, market share be damned, will choose to eject its higher risk customers first. Picking the first Bank to eject its wobbly specuvestors will be in a better position than its competitors as the rest play catchup, just like Margin Call.
What will be the event that shows how naked our debt emperors are? Hard Brexit, Douche Bank collapse, Aussie bank equity requirement, or Debt to income rule for borrowers as requested by the RBNZ.
Reckon another vote for Labour is required just to see financial sanity arrive.
I have bought many properties in the last few years and I bet anything, that every single one of them would be worth far more now than when I purchased them!
I am not selling any of them at this moment as they are all tenanted and giving positive returns.
Too many of yoU that comment about dropping values, think you know what the real estate market is doing, but really you need to take your blinkers off, and acknowledge that it is an Auckland thing at the moment and not nationwide!
I guess you can say what you like or think whatever the amount your properties are worth in the open market. The crunch is how much buyers are willing to pay for them !
"I have bought many properties in the last few years and I bet anything, that every single one of them would be worth far more now than when I purchased them!"
Just seeking clarification, even if the house price had remain unchanged from the time that you purchased it, your equity value would have increased as you are buying at a discount to market value - say 10-20% discount to market value.
In a sellers market, most owner-occupier buyers would likely be unable to buy at a 10-20% discount to market value, as their main motivation is the affordability of the house followed by suitability and desirability of the house. They most likely pay market value or even a premium to true market value (based on comparable transactions of similar properties).
On the other hand, savvy non owner-occupier buyers like yourself are much more price sensitive driven by the financial economics of the purchase, and more willing to walk away if the price and return is unattractive.
Averageman, I'm aware if the tighter HEM limits ~ is the "Debt to income rule for borrowers as requested by the RBNZ" the same thing in different trousers ?
Thanks for your thoughts.
RBNZ have indicated they would like DTI in the toolkit. See text on this page -debt to income.
https://www.rbnz.govt.nz/financial-stability/macro-prudential-policy
Thanks for the link. Well worth the read.
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