Average residential property values declined in the main centres over winter, putting pressure on agents to cut commissions says QV

Average residential property values declined in the main centres over winter, putting pressure on agents to cut commissions says QV

Average residential property values declined in Auckland, Wellington City and Christchurch over winter, according to the latest report from Quotable Value (QV).

The most consistent drop in values was in Auckland, where the average residential property value was $1,025,193 at the end of August, down 0.5% compared to three months earlier and down 2.3% compared to 12 months previously.

The biggest declines over winter were in Rodney in the north of the city where average values fell 2.7% over the three months to August.

On an annual basis, average values are down across all districts of Auckland except Franklin on the city's southern fringe.

The annual declines ranged from -4.6% in North Harbour to -0.4% in north-west Manukau, while average values were up 0.3% in Franklin (see the table below for the value movements in all districts throughout the country).

In Wellington value movements were more mixed, with average values down 0.3% over winter in Wellington City, but up in other districts - Kapiti +1.3%, Porirua +4.5%, Upper Hutt +1.7% and Lower Hutt +2.8%.

In Christchurch average values dropped 0.5% over winter and declines were also recorded in Ashburton -1.2%, Timaru -0.6% and MacKenzie -2.0%.

Average values also declined over winter in several centres that had previously been recording strong growth, such as Rotorua -0.7%, Napier -0.6% and Whanganui -0.4%.

However, in general, values have held up better in provincial centres than they have in the main centres.

Average values continued to rise strongly over winter in Dunedin +2% and Invercargill +3%, and were unchanged in Queenstown Lakes.

QV senior consultant Paul McCorry said the low number of new listings coming to market over winter had seen some agents reducing their commissions to secure listings.

"Real estate agents have reported increasing competition to list the limited number of properties that come to market each week," he said.

"This has proved beneficial for vendors with agents willing to negotiate their fee to secure a listing.

"In Auckland in particular, we are seeing an increasing number of properties listed with an asking price rather than an open-ended auction or tender process - a positive for purchasers," he said.

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QV House Price Index
August 2019
Territorial authority Average current value $ 3 month change % 12 month change%
Auckland Area       1,025,193 -0.5% -2.3%
Wellington Area          713,798 1.0% 8.3%
Total NZ          688,760 0.3% 2.3%
       
Far North 467,386 5.1% 13.0%
Whangarei 545,105 0.2% 2.6%
Kaipara 549,054 0.4% 2.4%
Auckland - Rodney 933,788 -2.7% -1.6%
Rodney - Hibiscus Coast 913,907 -2.5% -2.1%
Rodney - North 955,475 -2.7% -1.2%
Auckland - North Shore 1,172,939 -0.6% -3.4%
North Shore - Coastal 1,350,881 -0.1% -2.8%
North Shore - Onewa 938,054 -0.6% -3.4%
North Shore - North Harbour 1,128,774 -1.5% -4.6%
Auckland - Waitakere 812,456 -0.1% -1.1%
Auckland - City 1,211,804 0.1% -2.3%
Auckland City - Central 1,059,304 0.4% -0.6%
Auckland_City - East 1,528,249 -0.5% -2.9%
Auckland City - South 1,077,104 0.4% -2.7%
Auckland City - Islands 1,135,833 2.3% -4.1%
Auckland - Manukau 884,902 -0.9% -1.5%
Manukau - East 1,126,295 -0.8% -1.9%
Manukau - Central 684,212 -1.0% -2.2%
Manukau - North West 774,305 -0.9% -0.4%
Auckland - Papakura 695,577 -1.7% -1.1%
Auckland - Franklin 670,874 -0.4% 0.3%
Thames Coromandel 761,327 0.1% 4.3%
Hauraki 434,849 2.9% 5.2%
Waikato 485,624 -1.8% 2.0%
Matamata Piako 492,997 2.0% 9.7%
Hamilton 588,196 0.5% 5.2%
Hamilton - North East 733,236 0.4% 2.6%
Hamilton - Central & North West 540,962 0.3% 5.7%
Hamilton - South East 543,191 0.5% 6.9%
Hamilton - South West 524,672 0.8% 7.1%
Waipa 593,785 3.9% 7.1%
Otorohanga 356,317 5.7% 24.9%
South Waikato 257,765 -0.5% 19.9%
Waitomo 223,730 -5.0% -4.6%
Taupo 525,271 1.3% 9.8%
Western BOP 669,216 -0.9% 5.5%
Tauranga 743,202 0.2% 5.4%
Rotorua 471,768 -0.7% 9.0%
Whakatane 480,215 2.0% 12.5%
Kawerau 262,287 0.9% 28.5%
Opotiki 320,201 -1.3% 17.7%
Gisborne 368,735 5.6% 15.7%
Wairoa N/A N/A N/A
Hastings 531,004 2.2% 15.4%
Napier 553,316 -0.6% 8.1%
Central Hawke's Bay 385,481 2.0% 11.0%
New Plymouth 469,729 1.6% 4.9%
Stratford 291,928 3.8% 9.5%
South Taranaki 249,992 3.4% 10.3%
Ruapehu 225,175 5.7% 15.3%
Whanganui 295,081 -0.4% 15.9%
Rangitikei 239,833 3.6% 11.1%
Manawatu 408,744 6.2% 17.9%
Palmerston North 455,308 2.9% 14.2%
Tararua 239,482 3.5% 15.4%
Horowhenua 377,208 3.5% 16.8%
Kapiti Coast 605,354 1.3% 7.9%
Porirua 620,051 4.5% 10.8%
Upper Hutt 567,323 1.7% 13.5%
Hutt 601,235 2.8% 11.1%
Wellington City 826,486 -0.3% 6.2%
Wellington - Central & South 816,509 -0.3% 5.1%
Wellington - East 873,421 -2.3% 5.5%
Wellington - North 762,227 0.3% 7.5%
Wellington - West 945,971 1.1% 6.4%
Masterton 389,678 2.0% 9.4%
Carterton 436,204 0.5% 11.8%
South Wairarapa 535,905 5.7% 11.6%
Tasman 608,974 1.0% 4.1%
Nelson 627,629 0.5% 6.7%
Marlborough 483,090 0.2% 4.6%
Kaikoura 437,291 -1.1% 11.3%
Buller 202,916 4.9% 11.6%
Grey 219,343 0.9% 0.8%
Westland 251,683 -0.4% 3.4%
Hurunui 395,102 1.8% 1.7%
Waimakariri 451,733 0.8% 2.2%
Christchurch 496,306 -0.5% 0.4%
Christchurch - East 378,096 0.2% 1.1%
Christchurch - Hills 668,006 -2.1% -0.6%
Christchurch - Central & North 582,806 -0.8% 0.0%
Christchurch - Southwest 472,612 0.0% 0.5%
Christchurch - Banks Peninsula 511,887 -1.9% -0.2%
Selwyn 555,967 0.1% 0.5%
Ashburton 354,662 -1.2% 1.4%
Timaru 369,166 -0.6% 2.4%
MacKenzie 534,243 -2.0% 7.8%
Waimate 279,421 8.8% 13.9%
Waitaki 320,929 -0.1% 6.0%
Central Otago 534,077 1.9% 6.0%
Queenstown Lakes 1,181,975 0.0% 1.8%
Dunedin 465,457 2.0% 11.9%
Dunedin - Central & North 479,174 1.1% 9.2%
Dunedin - Peninsular & Coastal 422,182 3.3% 12.3%
Dunedin - South 449,447 2.9% 15.4%
Dunedin - Taieri 484,624 2.1% 12.2%
Clutha 236,209 3.0% 11.6%
Southland 321,385 2.2% 17.2%
Gore 242,082 2.5% 8.0%
Invercargill 308,572 3.0% 13.1%
Total NZ  688,760 0.3% 2.3%

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47 Comments

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Supply and demand. Plenty of scope in agents fees to sharpen the pencil. If volumes continue to challange perhaps the traditional Agency model could be ready to be disrupted.

I would love to see a change in that model. It's awful. The mismatch between vendors' interests and agents' interests is what drives most of the distrust of the profession, and that's all down to the model which the agencies themselves use.

A good agent is worth every penny in commission.

Its all about trust, and ensuring they are working for you.

They do prey on the vulnerable however, and there will be plenty as the tide continues to go out.

Do your own independent diligence (whether buying or selling), as there is no bigger parasite than a commission agent.

Auckland afloat on a sea of red..

13
up

Would explain why I saw an REA drive a Suzuki swift..

Welcome back to earth...

we might see less nice suits too

Even more agents in polyester suits???

You know the market is stuffed when they are still carrying a 4 year old iPhone.

Auckland and Christchurch as always and now Wellington. It’s getting worse

13
up

But I received an email from a Wellington agent just last week telling me prices were probably going to go up by 8% or so over the next year and I should get in quick!

They wouldn't lie to me... right?

... it's a line ball decision which is mans best friend , a dog or a real estate agent ....

Each if them will roll on the grass and let you rub their tummy ... each will fawn and slobberingly lick your hand... and when you least expect it , each will rise up and hump your leg . .

.. but only one of them will place a collar of debt around your neck , and tie you up for the next 30 years ....

It's one of those throw it out there predictions. If they're right, you'll probably never hear the end of it. If they're wrong, you wont hear a thing.

.

The falls are very mild.
Looks likely that the drops from peak to trough will be near the low end of my 5-10% median value fall prediction of 2018.

with the economy still doing OK and record low unemployment and record low OCR rates, still mild drops.

What if ......

We can say 'what if' about anything.
Don't worry, I haven't turned into a bull. I think the crash has merely been delayed. When we get a true economic shock we won't have the ammo left to deal with it.

Fritz, i'm with you. NZ property market is vulnerable to a big crash purely because of the high debt level and the banks exposure to that market, but it probably won't have that kind of crash unless there is a big shock. However, with all the storm clouds on the global economic horizon, I wouldn't want to be carrying heavy debt or be in a recession sensitive profession right now.

Vendors need to negotiate hard with real estate agents.

Play them off against each other or, better still, do the job yourself and save many thousands of dollars in commission.

TTP

The word “resilient” remains pertinent to house prices.

The eagerly anticipated “crash” was never going to happen.

TTP

11
up

I pity you if you believe the NZ economy can operate in isolation from global trends. Given the size of our economy and our reliance on foreign capital and exports, how long would it take for money wells to dry up when the music stops.
I don't believe either Greece or Spain had very close economic relations with the US in 2008 for their asset prices to be overly exposed to trends in the US housing markets but we can't deny that falling economic sentiments have global contagion tendencies.

also bear in mind that some places like North harbour are already down 7.5% (or $92,000) since March 18

An average Agent with any listings AT ALL has 2-3.
That means get average income in Auckland of about $59k. Yes about 40% of sales are to 15% of Agents who are best known. So can we please cease suggestion that av Agent is coining it. Many are only still persisting because their wife or husband is working outside of real estate

A lot of part timers exited RE employment during the gfc. Anyone know if that same trend occuring again?

11
up

Mikekirk29,

I am in Scotland just now. The commission rate for REAs is 1% and has been for many years. Agents in NZ are vastly overpaid for what they do. Technology will sweep them away and few will shed any tears.

Yep you're right, London and the South East are also at 1% commission fees and have been for many years. Also they will actually take Buyers around a property individually (Open Homes are frowned on since they push up prices too rapidly). Just NZ REA thought they could get away with charging huge commission fees.

That is, when they are paid anything.
By the way I am from uk

Ahh that explains why you're able to see things more from a global perspective. We've been thought this market upheaval before with the GFC.

It seems the industry would be much more efficient with fewer agents charging less per sale, and spending less time and energy competing for listings.

Promotional message deleted. -Ed.

Bit of disruption

Ok shall I just say that certain Auckland Real Estate Agents are dropping to the equivalent of 1% commission fee and not mention their names. :)

Homelessness is an awful condition for anyone.

Christchurch supposedly declined .5% which is a massive $2,500!
Seriously, that is a real worry not!
Reality is that the first home buyers are in the market in Christchurch buying the cheaper properties as they know that prices are only going to increase.
Really, many of you that are just on here to bemoaning housing prices should go out and buy one if you find one where the no.s work.
The negativity towards property prices has been going on here for over 10 years and we all know that you have been wrong.
Brilliant time to be buying in many places as rates are low, demand is great and safest investment there is.

Just imagine how much better off you would be if you had bought some property in Dunedin. Then you could afford to go to Europe in peak times not off the shoulder. If in fact you are going which I doubt.

Don't worry gordon, TM2 will be sure to provide us with hourly holiday updates from his hotel room.

Na Gordon, we like our tenants to look after our properties, not destroy.
Why go to Europe at peak times when too busy?

An old bugger like you should not be scrimping about travelling at your age. As they say if you don't fly business class your kids will fly first class.

Less of the old bugger Gordon, and not scrimping about anything.
Business class is overrated for what you get, rather put it into housing and get a return!

Wow you are certainly older than I thought. Did you live through the depression. You never know when you are going to snuff it. There is more to life than making money all the time. As for me I have more than enough capital to enjoy the rest of my life without having to think about scrimping and saving. Anything further than Australia is always business class and when I travel with my children and partners we pay for them to travel business class with us. Being together on holiday even in the plane is a big part of the enjoyment. I could buy more land or shares but why. I have enough. You should have a serious think about why you are on this earth in the first place.If it is to keep on accumulating assets at your old age I feel sorry for you.

Yeah Nah, CHCH used to be in this list! For 2019 it's nowhere to be found.. the skinheads are returning!

https://www.traveller.com.au/worlds-safest-cities-the-safe-cities-index-...

Isn't it Spring already ? Or do the agents know something which we don't ?

If in UK and even here some only charge 1 % + is there a basis for charging the exorbitant amounts some RE currently charge ???.In many instances, their earnings for the hours worked far exceed that charged by a competent surgeon for a highly-complex surgery.

Look at the inverted structure of the commission rates charged by many RE agencies.Weighted towards the lower end.Hardly much incentive to strive for the highest price ( although they may claim otherwise in pitching for a listing).

And BTW,why should selling a $1 million house cost any more than than a $500K house? Digital photos, write up an advert for TradeMe, erect a signboard outside the property ( often times merely advertising the smiling face of the agent & the agency, nothing about the property),hold Open Homes ( use it at same time to fish for more listings).Writing up an offer?? Well, standard forms are used eg Auckland District Law Society S&P Agreement.

If some can do all these for 1% +, that itself reflects on the actual work involved.Any claims of superior negotiating abilities etc could be BS.

Buyer is not prepared to pay beyond his affordability.Especially in current market.

And the worse thing is...all of this commission has been paid with debt. Mountains of debt built up in the housing market. All the bank profits too have been from debt, the bank profits repatriated and cashed in...little ol NZ left with the same old shyyt housing, thousand more people to support and all that debt ...for what?

Most overseen by the financial genius god knight..the great bankster ...with no clothes.

For what?? So the Paper Millionaires can feel good at least for a little while. Now we can watch them deflate before your very eyes. I still find it hard to comprehend the craziness of the situation and why it was allowed to happen in the first place.

Wasn't there just an article posted here talking about how it's an "early spring" and how there are huge amounts of houses being put up for market? Certainly one of these contradicts the other. If they were actually selling and it was truly that "spring" had arrived, agents wouldn't be hurting so badly.

Arizto cutting everyone's lunch.

These things come and go though. Wonder if they'll stay around for more than a year or so.