Barfoot & Thompson's auction numbers steady over the last four weeks but remain well down on this time last year

Property

Sales rates averaging around 50% at Barfoot & Thompson's auction rooms

30th Oct 19, 9:40am by Greg Ninness

Activity in Barfoot & Thompson's auction rooms appears to have settled into a fairly steady pattern over the last few weeks, with the agency handling 107 auction properties in the week leading up to Labour weekend (21-27 October), while the number of properties handled has ranged from 91 to 115 over the previous three weeks.

Of the 107 marketed for auction last week, sales were achieved on 56, giving an overall sales rate of 52%, compared to sales rates ranging from 48% to 57% over the previous three weeks.

However, both the number of properties being marketed for auction and the number being sold at auction remain well down from where they were a year ago.

In the week leading up to Labour weekend last year (15-21 October), Barfoot's processed 248 auction properties and achieved sales on 80 of them.

However, we should not draw too many conclusions from those numbers.

The REINZ's September sales figures were the highest they have been for the month in the last three years and were particularly strong in Auckland, so the Barfoot auction number may reflect a change in how many properties are being sold rather than the overall state of the market.

We will have a better idea on that front when Barfoot releases its October sales figures next week and the REINZ figures for October come out in a couple of weeks.

The table below gives the results breakdown for all of Barfoot's auctions last week, and individual property results are available on our Residential Auction Results page.

The comment stream on this story is now closed.

Barfoot & Thompson Residential Auction Results
21-27 October 2019
Date	Venue	Sold	Sold Prior	Sold Post	Not Sold	Postponed	Withdrawn	Total	% Sold
21-27 Oct	On-site	1	1		1		1	4	50%
22-Oct	Manukau	12	1		10			23	57%
22-Oct	Shortland St	4			4	1		9	44%
23-Oct	Shortland St	12	2	1	10			25	60%
24-Oct	North Shore	4	5		10			19	47%
24-Oct	Kerikeri				4			4	0
24-Oct	Shortland St	6	1		2			9	78%
24-Oct	Pukekohe	1			5			6	17%
25-Oct	Shortland St	5			3			8	63%
Total	All venues	45	10	1	49	1	1	107	52%

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110 Comments

by alittle | 30th Oct 19, 9:57am 1572382650

Market is good time to sell (If one has to sell) as the sentiments are positive at this stage and also houses are fetching better price than earlier in last one year - more interest / buyers.

by Market Interest | 30th Oct 19, 10:08am 1572383313

I'm still seeing very little in the way of stock listed in the central suburbs. So more interest / buyers...maybe, but possibly only per property for sale rather than in total.

This time last year my saved searches were popping up 2-3 a week, now it's 2-3 a month.

by tothepoint - d… | 30th Oct 19, 11:20am 1572387612

Auckland housing market is changing up a gear.

Indeed - good listings in Auckland's central city suburbs (including Ponsonby, Freemans Bay, St Marys Bay and Herne Bay) are scarce. Property owners in these highly sought-after, affluent suburbs are simply unwilling to sell.

First-home buyers are as keen as ever. Investor interest is picking up.

Now is likely a very good time to buy, as the current market cycle appears to be moving past its trough. But expect more competition from other buyers.......

TTP

by CourtJester | 30th Oct 19, 11:59am 1572389984

Considering the fact that you've never in the history of this website said "it's not a good time to buy", I'd take your recommendation with a grain of salt. Seriously, when is it not "a very good time to buy" in your opinion?

by tothepoint - d… | 30th Oct 19, 12:42pm 1572392561

Hi CourtJester,

Simple - when the market cycle is at (or near) a peak.

The conventional wisdom is "buy low / sell high".

But, in NZ, buying low and holding indefinitely (long term) has also proven to be a good strategy for many house owners/investors.

TTP

by company of heroes | 30th Oct 19, 12:49pm 1572392982

TTP, "when the market cycle is at (or near) a peak?" You mean now is not the good time to buy?
"New Zealand is the second most vulnerable economies to a correction in house prices country"
https://www.bloomberg.com/news/articles/2019-07-12/canada-new-zealand-s…

by CourtJester | 30th Oct 19, 1:09pm 1572394183

This contradicts your previous comment where you said it's a very good time to buy.
The market peaked 2 years ago (in Auckland).
"buy low / sell high" - By what metric can almost record high prices (minus 1 or 2%) considered to be "low"?
Ah yes, I know... metrics from the future. Also, you've been saying it's a good time to buy for at least a year or two now.
Where in Auckland can you "buy low"?

by tothepoint - d… | 30th Oct 19, 2:01pm 1572397286

The market is near (probably just past) a (lengthy) trough right now - having been flat for the last three years or so.

Still a good way to go until the next cyclical peak is reached.

I think now is a good time to buy. But I wouldn't leave it too long........

TTP

by Voiceofreason | 30th Oct 19, 5:20pm 1572409222

FOMO again so soon TTP? Pull the other one.

by cmat | 30th Oct 19, 1:56pm 1572397012

May be 1-2% lower but 2 years after the peak means only 8 more years until the market doubles!! (!)

#PropertyClock am I right?

by printer8 | 30th Oct 19, 10:39am 1572385186

Agree with you “alittle”.
However if one doesn’t have any urgency I would hold off from selling a little longer as I think the sentiments in the Auckland market will become slightly even more positive.
If one is considering trading up it would be ideal to start moving because as that sentiment improves, that price differential will become a little larger. Forget sales data from 2018/19 as yes that was a falling market and is not relevant if the market is turning (ok cmat?).
I note Dominic Stevens comments in this morning’s Herald; however, while I don’t see a boom I do agree that the market is turning. His rationale is that which I have been commenting on for some time.
Just in connection to this, I don’t see the QV figures due out in the next few days will reflect the turning given that they are completed sales over the past three months (and offers first made up to five months ago) meaning that the impact of the OCR cut will not have feed through into those sales.

by mikekirk29 | 30th Oct 19, 10:32am 1572384735

Auckland listings are 10,928 this morning.
One year ago today they were 13,667.
20% lower.
Residential sales in Auckland are, in the 6m to end August 2019, 14,558
In same period of 2018 figures were 17,630.
In 2017 the figures for same 6m period were 16,005.

So, September and October is too short a period to assess a trend.
Bear in mind that listings rose hugely last October, ahead of the Overseas buyer ban.
SO, it is only to be expected that this year will revert to mean.
Hence, in Sept to October sales in 2016, there was a change from 2023 to 1911 (- 5.5%)
In 2017 it was 1630 v 1584 ( -2.8%)
In 2018 it was 1706 v 1967 (+15%)
In NZ as a whole the Sept - Oct jump in 2018 was 21%

In Hibiscus Coast October listings are 33% lower than in 2018.
In Rodney it is 27% for houses and townhouses and 16% for total listings

Residential only sales in Auckland are running just over 20,000 pa at present, and this is dropping slightly in each 12m series. Very little of any interest will happen in Auckland sale market except for fewer sales than 2018, until early March. At that point I expect builders and developers to start off-loading stuff cheaper because they need the cash flow.

by Milkyone | 30th Oct 19, 10:55am 1572386155

Appreciate the effort you consistently put in providing these sorts of figures.

by mikekirk29 | 30th Oct 19, 12:19pm 1572391183

Thanks Milkyone.
I have them to hand as like to monitor true state of market at all times, to gauge when it is turning or what is moving it

by bobestm | 30th Oct 19, 2:54pm 1572400461

Same, value these insights, hopefully to apply them in the near future.

by Advisor | 30th Oct 19, 11:00am 1572386403

Foreign buyer ban, Auckland affordability maxed out, ring-fencing, bright-line tests etc. are the perfect mix for investors to look to the regions for longer term prospects. Add to that the fact that the city has limited ability to grow as an economy due to infrastructural limitations, putting a lid on productivity and income gains.

Despite recent prices increases, several regions remain relatively undervalued from a median price to income ratio. In fact the regions are more likely to keep driving much of the economic growth for the entire nation in the near future.

by CourtJester | 30th Oct 19, 12:06pm 1572390384

But the gross rental yields increased from 3% to 3.1%!!! Clearly a bull run is coming up!

by CN | 30th Oct 19, 1:55pm 1572396900

"Foreign buyer ban, Auckland affordability maxed out, ring-fencing, bright-line tests etc. are the perfect mix for investors to look to the regions for longer term prospects"

As a result of increased investor interest, this has very likely been the cause of recent dramatic property price increases in the last year in areas with lower price points.
1) Gisbourne - +54% - https://www.stuff.co.nz/business/113480719/gisborne-leads-national-hous…
2) Whanganui - +45% - https://www.stuff.co.nz/business/116655676/whanganui-challenges-zombie-…

These reported property price gains in the mainstream media have attracted other property investors to the area, leading to a fear of missing out by potential investor buyers and possibly local residents (similar FOMO psychology by those property buyers in Auckland around 2014 - 2016).

by markm | 31st Oct 19, 12:14pm 1572477287

So what is a family of 4 suppose to do? We live in Wanganui and have been saving for a house but now we find ourselves in a situation of not being able to save as fast as houses are rising.

Do we jump on the property whirlwind and succumb to FOMO and pay what we think are crazy prices for sh!tholes or do we sit tight and hope this thing blows up? We would be looking at the lower end of the market but also fear it will be a money pit as usually these houses are needing major work e.g. new roof and/or foundation work and/or electrical and plumbing work and/or updated kitchen and/or updated bathroom and/or major redecorating inside and outside.

It's a big desion :/

by CourtJester | 30th Oct 19, 12:22pm 1572391325

So let me get this straight. Number of listings is down 20% year-on-year. According to spruikers, demand from FHBs is higher than ever (high immigration, low interest rates, The Property Clock, Mercury in retrograde etc.).
High demand & low availability, right? Why have prices not increased at all then?

by mikekirk29 | 30th Oct 19, 12:31pm 1572391898

Yes, Court jester. Quite right.
Also, if want to look at REAL FHB demand it is surely appropriate to look to look at sales in bracket $600 - 750k for houses, or $250 - 500k for apartments.
As I have related recently, neither supports argument that FHB are chomping at the bit.
FHB are being allowed to borrow far too much above 80% of LVR and are at risk of negative equity as a result, if prices fall even 15% from here.
Yet this development is cheered to the rafters.
Demographics and ageing pop of Auckland means that people are increasingly choosing not to buy and if they want children, to move elsewhere where prices are not so silly.

by CN | 30th Oct 19, 1:18pm 1572394687

Something to consider:

What happens, if the economy goes into a recession?
1) to transaction volumes in Auckland
2) to property prices in Auckland

by Basil brush | 30th Oct 19, 1:57pm 1572397057

great analysis. Thanks Mike.

by mikekirk29 | 30th Oct 19, 10:37am 1572385028

In the 32 month period from January 2009 to end of August 2011, residential sale sin Auckland ran at 1732 pcm
That followed 3m after Lehman shock

The 32m up to end August 2019, same sales were 1719.
With 6.5% more stock according to census recent release.

In the earlier period apartments sold were 6661 and in more recent 32m it was 8444 (up 27%)
Meanwhile non apartment residential sales FELL 4.5%

The phase of the market we are in now, I feel, is the same as the period from January 2009 - end 2011 (4 years) so I expect no increase in sales for at least 16 months yet. And even then it will be weak unless prices drop 10-20% before end of 2021

by printer8 | 30th Oct 19, 11:09am 1572386983

Mikekiri
Your premise is simply based on analysis of historical data, and not once have you considered even a single current factor influencing the market. Come on, your analysis doesn’t - and can’t - consider the impact of factors such as the recent cut in the OCR and rising rental yields. Your methodology and conclusions are based on you simply shutting yourself in a dark room, playing with historical figures, and never looking out the window as to what is currently happening in the world outside.

by CJ099 | 30th Oct 19, 11:19am 1572387540

LOL if you're pinning all your hopes on OCR rates remaining rock bottom for generations to come so FTB's can pay for vastly over inflates property prices, then you're the one with the weak methodology. And as for the world outside do you really know what's going on because I think you don't. If you're expecting all that hot money to come pouring in again from China in the near future you might want to think again.
Article: China Imposes New Capital Controls, Targets Foreign Real Estate Purchases, as Yuan Falls to 11-Year Low
https://wolfstreet.com/2019/08/30/china-imposes-new-capital-controls-ta…

by tothepoint - d… | 30th Oct 19, 11:34am 1572388499

Hi CJ099,

In just a few years time, today's Auckland house prices will look cheap.

And that's a large part of the reason why people are reluctant to sell - especially in the pricey inner-city suburbs. It's just too difficult to buy back in.

Actually, don't know why I'm saying this - most people are well aware of the situation.

TTP

by CJ099 | 30th Oct 19, 11:56am 1572389813

"In just a few years time, today's Auckland house prices will look cheap". Really! The point you're consistently missing Ttp because you're just a Real Estate Agent. Is that salaries haven't been rising to keep up with unrealistic property prices. Are you forgetting that Auckland's rapid property price increase was due to Foreign Buyers and money pouring in from China over the last few years, which has now stopped (Since 2017) and will remain blocked for quite some time. NZ's property prices are only being propped for the time being by the falling mortgage interest rates and well you know it! It is not a sustainable market Ttp even you can not be that stupid!

by CourtJester | 30th Oct 19, 12:31pm 1572391898

Vested interest sometimes has the same symptoms as plain old stupidity.

by Yvil | 30th Oct 19, 1:46pm 1572396410

CJ, why do you obsess with calling everyone RE agents?

by tothepoint - d… | 30th Oct 19, 5:09pm 1572408592

Hi Yvil,

For that very reason. CJ is obsessive.

TTP

by CJ099 | 30th Oct 19, 6:12pm 1572412357

Well it's kind of very obvious that Ttp is an Real Estate Agent and you have described yourself as a failed/closed architect business that has turned to real estate in some form (Would you like to clarify) Yvil.

by Yvil | 30th Oct 19, 6:45pm 1572414301

I don't think TTP is a RE agent at all, certainly not from his comments. Should I tell you more about me when you make up stuff like I'm a "failed Architect"? Sure, I've got no problem with that. I had my own Architectural business in Christchurch for 18 years, at the same time I invested in mostly commercial Real Estate. I lost my house in Sumner in the 2011 EQ and made 2 big changes to my life, 1) I moved to Auckland with my family 2) I gave up my Architectural business as my RE investments allow me to live well without having to do Architecture. So now I own both commercial and residential RE in NZ and overseas and I also own a Motel (I'm at the Motel right now as I relieve the managers during their holidays). This was actually a RE investment gone wrong where the lessee was a criminal and I had to step in to run the Motel, it was tough at the time, 10 years ago, and now it's doing very well indeed.

Your turn now, are you man enough to tell us what you do for a living?

by CJ099 | 30th Oct 19, 8:12pm 1572419568

I already told you several times that I work in the IT industry. You know, one of those wager earners. who you're trying to push out by pushing up the cost of living to Silicon Valley prices without the incredibly high wages. I also invested in property too, but decided to sell up during 2016 when I realized what was going on and why prices were so high, with overseas investment now gone in Auckland. Glad I got out when I did. I may reinvest but only when the NZ property market has re-balanced to sustainable levels, suitable for real returns on that investment. Though it still pains me when I see companies here fold unnecessarily and younger people having to resort to various methods just to find a home, or worse they just leave NZ. It is possible to have a sustainable property market and there are people on this site who understand that, without destroying our wider and real economies.

by Yvil | 30th Oct 19, 10:05pm 1572426316

It seems you love to hate and belittle others.
1) you imply property investors are bad people and then in the same post you say you also invested in property, strange...
2) I employ people, as in I give them a job and pay wages (and I appreciate all the great work they do)
3) you say you work in IT, that doesn't exactly describe what you do, do cold call people to join a certain power company? if not what do you actually do ?

by Millennial_Woman | 31st Oct 19, 2:59am 1572443964

Wow that's a bit rich... So what if he "cold calls people to join a certain power company" ?

by Yvil | 31st Oct 19, 7:38am 1572460680

MW, I was just giving CJ some of his own medicine, always belittling others occupation, it's not nice huh?

by CJ099 | 31st Oct 19, 7:08am 1572458933

Yvil you have very "blinkered" views and I'm not the first person to point that out to you. Since as you mention you only worked within the bounds of the property/construction. We're simply commenting on the knowledge you lack regarding our wider economies and why it is important to understand them.

by Yvil | 31st Oct 19, 7:41am 1572460883

How is running a Motel "only worked within the bounds of the property/construction" ?

Yes I know property, that's why I limit my posts mostly to RE articles, would be great if you limited your own posts to fields you do know.

by CJ099 | 31st Oct 19, 8:12am 1572462771

LOL, But that's the problem Yvil you ONLY know property. How can you know where the property market is moving if you don't understand your paying customers, their economic backgrounds and how that drives the market? That's why it is important to take off your blinkers! Oh and by the way, not everyone in IT works in support for power companies. Think; Software Developer, Analytics, AI, Application Engineer or simply programmer. See, just broaden you view in Tech. :)

by Yvil | 31st Oct 19, 12:09pm 1572476976

Blah blah blah ...

by Nzdan | 30th Oct 19, 8:21pm 1572420076

Nice one, an example of being handed lemons and making lemonade. A close family member of mine too lost the house and business in the EQ, a little too over-leveraged at the time and their company relied heavily on business in the CBD. They didn't have a back up plan unfortunately, didn't see it coming.

I feel a little bad about including you in the odd ad hominem troll post, it's very easy to have prejudice for strangers you don't agree with online.

by Yvil | 30th Oct 19, 10:06pm 1572426385

No problem NZ Dan, I don't get offended easily : )

by Fritz | 31st Oct 19, 8:36am 1572464215

I see a glimmer of humanity in Yvil, at least, unlike other spruikers here...

by Fritz | 31st Oct 19, 8:36am 1572464215

I see a glimmer of humanity in Yvil, at least, unlike other spruikers here...

by Yvil | 31st Oct 19, 12:07pm 1572476861

Haha, a glimmer. I'm a lot softer and warmer with my friends but I admit I have little patience for abuse or ignorance by some commenters I don't care about

by Fritz | 30th Oct 19, 12:04pm 1572390289

Affordability is stretched now, even with OCR at record lows.
How are large future price rises supported when:
- OCR can't drop much further
- Hot overseas money is gone
- Minimal if any under supply
- Many wealthier people leaving Auckland
- Large % of immigrants are low-moderate salary earners
- Incomes unlikely to increase much

I only see significant price increases in the short term if there is large relaxation of deposit requirements, which of course *might* occur.

by house hunter | 30th Oct 19, 12:29pm 1572391790

An even weaker NZD, coupled with continued high net migration, would put further upward pressure on prices. Even if a large % of immigrants are low-moderate salary earners the numbers (50k/yr net migration) are such that there are still a good number of high earners (or otherwise wealthy people) coming in. It seems likely that many of these are the marginal buyers now.

by CourtJester | 30th Oct 19, 12:35pm 1572392129

"there are still a good number of high earners (or otherwise wealthy people) coming in" - Do you have the actual stats on this? I would love to see how rich the people are who come to NZ. When I immigrated I wasn't asked about my net worth. Has the procedure changed?

by house hunter | 30th Oct 19, 2:03pm 1572397424

I'm not aware of such stats being available. The exception being the number of immigrants taking advantage of the $10m investment trick to get residency - it was published that 243 people used that option in the year to July 2019 (https://www.stuff.co.nz/business/116459930/heres-how-to-buy-your-way-to…). But that's the extreme end of things. I imagine there's a much bigger group below that level who have sufficient means to buy a $1m house for example.

by CourtJester | 30th Oct 19, 2:55pm 1572400526

So you were just guessing when you said this:
"there are still a good number of high earners (or otherwise wealthy people) coming in"

by house hunter | 30th Oct 19, 5:59pm 1572411594

Anecdotal evidence + common sense. Educated guessing perhaps :-). Remember, if even just 5% of the net migration consists of high earners that's 2,500 additional high earners in the country. I'd call that "a good number of high earners" but perhaps you disagree?

by Fritz | 30th Oct 19, 12:41pm 1572392511

Even if there are a decent number of wealthier immigrants coming to Auckland, I am pretty confident there is a net wealth loss occurring. The stats and anecdotes are showing a lot of cashed up Aucklanders have left or are planning to leave the city.

by CJ099 | 30th Oct 19, 12:49pm 1572392963

Everyone knows that higher immigration pushes wages down not up due to creating more competition for existing job markets. That is also shown in this recent article where Auckland is falling back economically in comparison with the rest of NZ due to it's over reliance on its property market and high immigration. https://www.interest.co.nz/opinion/101984/kiwibank-economist-jeremy-cou…

by mikekirk29 | 30th Oct 19, 12:58pm 1572393518

Prices are being knocked lower, in last 18m by one thing only: Agents conversation with vendors stating that buyers not forthcoming at THAT price and a lower one needs to be tried. Prices are not determined by interest rates, or immigration. People can state opposite but there is little independent research supporting those causes. Prices went up exorbitantly in 2013-16 because of who was buying and the amount they were prepared to spend (lots of them being Chinese) That push has been removed by the Chinese government and the NZ government, plus AML. Add to that the trade wars and currency reserve protection by the Chinese, plus falling GDP in NZ and there is nothing left to support arguments that prices have anywhere to go but down up to end of 2021 minimum.

by house hunter | 30th Oct 19, 2:38pm 1572399484

Mike, are you saying that interest rates and immigration have no influence on house prices?

by mikekirk29 | 30th Oct 19, 2:54pm 1572400481

Not entirely, it is just not evidenced well enough.
Immigration and interest rates will impact on real demand.
And that real demand in turn can make prices rise, if supply is inadequate for what is in demand.
My beef with the immigration issue is that it is ASSUMED that the immigrants want and can afford housing in Auckland.
Yes, they may want and need it but due to age of immigrant and wealth of same, they usually are not able to afford it til they are older.
many immigrants will I've with people known to them until they get a place but often that place will be rented.
Rental dwellings are rising far faster in number than owner-occupied dwellings.
Low interest rates of course do raise potential demand but there is a limit to this and I think NZ is reaching that limit. That is, when they are this low and not much left to cut, remaining cuts make diminishing difference.

by house hunter | 30th Oct 19, 6:19pm 1572412758

So interest rates and immigration do influence house prices then. And yes, of course they're just a couple of factors amongst many. Glad we agree on that.

Regarding immigration, I agree it's a mistake to assume that ALL immigrants want and can afford housing in Auckland.
But equally, I think it's a mistake to assume that NO immigrants want and can afford housing in Auckland.

by CN | 30th Oct 19, 7:26pm 1572416796

"My beef with the immigration issue is that it is ASSUMED that the immigrants want and can afford housing in Auckland."

1) isn't immigration more likely to impact the rental market?
2) isn't immigration impact on the ownership market dependent upon the citizenship of the immigrant? As I understand, due to the foreign buyers ban, the only immigrants allowed to buy in the secondary market are Singaporeans, Australians & returning NZ citizens. All immigrants are allowed to buy new builds. I think most transactions are in the secondary market, so ineligible immigrants aren't able to buy those.

So if all the immigrants were citizens of England, then they would be unable to buy in the secondary market, and would only potentially be able to buy in the primary market. I know an English couple who are moving to NZ - they can afford to buy but will be unable to buy in the secondary market due to the foreign buyer ban.

by house hunter | 30th Oct 19, 8:17pm 1572419854

https://www.newzealandnow.govt.nz/living-in-nz/housing/buying-building
"In general, only residents and citizens can buy homes to live in"

So I think a non-citizen can buy property if they have permanent residency which presumably is defined by visa type. Looks like it is based on this:
https://www.newzealandnow.govt.nz/move-to-nz/new-zealand-visa/compare-n…

Another, perhaps more definitive, reference: https://www.linz.govt.nz/overseas-investment/about-overseas-investment-…
"Ordinarily resident is a clear test of four parts – the person must have a Residence class visa, must have lived in New Zealand for the past 12 months, have been present in New Zealand for at least 183 days of the past 12 months, and be a tax resident."

by CN | 30th Oct 19, 8:47pm 1572421644

interesting.
"the person must have a Residence class visa"

1) There were 151,000 migrant arrivals into NZ - https://www.stats.govt.nz/news/net-migration-remains-high
2) Not all received residence visas. Not all who received residence visas actually arrived in NZ. Wonder how many residence visas issued actually arrived in NZ.

FYI, it seems that there are 5 types of visas issued:
1) visitor
2) limited
3) work
4) student
5) resident

FYI, there were 40,694 residence visas issued in 2017 but we don't know how many of these people arrived in NZ. Only those that have arrived and lived in NZ for the past 12 months, and is a tax resident in NZ, would be eligible to buy in the secondary market.

http://www.migrationstats.com/nz/home

Also, for those that arrived in NZ on a work visa, they have to be in NZ for two years before they can apply for a residence visa.
https://www.newzealandnow.govt.nz/move-to-nz/new-zealand-visa/work-visa…

by printer8 | 30th Oct 19, 4:18pm 1572405505

No CJ1099
I am not pinning all my hopes on the OCR rates remaining rock bottom for generations to come.
Two things:
1.The OCR is just one factor - I have posted many times as to the range of factors, and the need for "hot money coming pouring in from China" is not and has never been one of them (so forget the irrelevant article on China), and
2. I make no assertions as to the future of the market "for generations to come" - I am only referring to the short to medium future (although over the longer house prices are most to increase but will be dependent on other factors - such as price and wage inflation - rather than the OCR being at the current level).

As an aside - CJ1099 (and cmat if you are reading) are you a property owner? Be honest.

by CJ099 | 30th Oct 19, 6:20pm 1572412829

Blaaa, Balaaa, trying to deny that foreign buyers ever had an impact on Auckland. Go kid yourself! Umm wonder why we had to introduce a foreign buyers ban??? You're even more laughable than TTP!!! :P

Here's some more fake news for you! Article: South China Morning Post: China’s capital outflow controls have gone to the ‘extreme’, former central bank adviser says. https://www.scmp.com/economy/china-economy/article/3012312/chinas-capit…

by Nzdan | 30th Oct 19, 11:40am 1572388828

Your first sentence, isn't that the whole basis of various bullish commentators such as Yvil and TTP? Historical data on how the market has behaved over the last 30 years?

by tothepoint - d… | 30th Oct 19, 11:47am 1572389239

Hi Nzdan,

Who is "TTP"?

Are you awake today?

by Pragmatist | 30th Oct 19, 11:50am 1572389451

You signed one of your own posts on this very page with TTP... about 3 posts above this one.

Have you finally lost the plot completely?

by Chairman Moa | 30th Oct 19, 11:56am 1572389811

'Have you finally lost the plot completely?" Possibly the onset of Dementia..

by Nzdan | 30th Oct 19, 12:25pm 1572391529

He's been drinking the dirty water out of the Gold Fish pond at the Summerset Palmerston North, inbetween hourly stints of staring at the ~~Sundial~~ Property Clock.

by tothepoint - d… | 30th Oct 19, 11:58am 1572389916

Hi Pragmatist and Chairman Motor Moa,

You missed the point!

Nzdan refers to "Yvil and TTP" without realising that TTP wrote the very post he/she is referring to!!

TTP

by Chairman Moa | 30th Oct 19, 12:13pm 1572390812

Hi tothepoint
Who is Chairman Motor Moa?

by tothepoint - d… | 30th Oct 19, 12:24pm 1572391483

By all accounts, a very cut up chap right now.

TTP

by CJ099 | 30th Oct 19, 12:30pm 1572391819

LOL Oh you are a giggle fest. :P

by house hunter | 30th Oct 19, 12:36pm 1572392185

All this back and forth is confusing, and it's made worse by the less than stellar thread layout, but it looks to me like Nzdan replied to printer8.

by mikekirk29 | 30th Oct 19, 12:23pm 1572391437

There is nothing simple about it and I spend many hours each weekend knocking on doors and speaking with potential and actual vendors and buyers.
So, you should make fewer assumptions.
Also, interest rate cuts have been commented on by many financial commentators as a diminishing return policy.
Interest rates have been cut a lot in last 12m and sales have fallen regardless.
Rental yields rise at lower quartile and this is not enough to counter investor reluctance to buy and sell in this market in Auckland.
I know an investor and he has 40 properties and says he is not buying or selling at present, too risky.
Sales are lower because 2018 was an aberration and 2017 was truer impression of market in terms of sales and their trend
Yet sales are lower than they were in 2017 also and apartments sales more so.

by CN | 30th Oct 19, 12:43pm 1572392624

FYI, I heard of a property investor who recently sold 15 properties. The reason for selling was the cost required to upgrade his investment properties to meet the Healthy Homes Standards.

The healthy homes standards became law on 1 July 2019.

The healthy homes standards introduce specific and minimum standards for heating, insulation, ventilation, moisture ingress and drainage, and draught stopping in rental properties.

All private rentals must comply within 90 days of any new or renewed tenancy after 1 July 2021, with all private rentals complying by 1 July 2024. All boarding houses must comply by 1 July 2021. All houses rented by Kāinga Ora (formerly Housing New Zealand) and registered Community Housing Providers must comply by 1 July 2023.

Landlords are responsible for maintaining and improving the quality of their rental properties. These standards will help ensure landlords have healthier, safer properties and lower maintenance costs for their investments.

by Pragmatist | 30th Oct 19, 8:28pm 1572420524

A slumlord bailing out? No great loss.

by CourtJester | 30th Oct 19, 12:28pm 1572391699

Us mere mortals with no supernatural talents have no choice but to look at past and present data for analysis. I wish I could base my analysis on future data...

by Pragmatist | 30th Oct 19, 12:35pm 1572392129

I can rent you a oiuja board, very reasonable rates... ;)

by CN | 30th Oct 19, 1:44pm 1572396288

"Us mere mortals with no supernatural talents have no choice but to look at past and present data for analysis"

The essential point is to look at CORRECT and RELEVANT past and present data to reach your conclusion.

FYI, here is a guy who looks at the past historical data to develop his future property price expectations - he is using 40 years of historical data (watch the video from 0.55).
https://www.tvnz.co.nz/one-news/new-zealand/has-aucklands-property-boun…

For those who don't know, the historical data set used is historical property prices for the last 40 years, and he has extrapolated this into the future to develop the property cycle, and his expectation of future property prices. Many people believe strongly that this is the correct and relevant historical data to use to develop their future property price expectations. Many of these people are also unaware of other historical data which may be more relevant, or may be time constrained and so they believe those high profile market commentators in the mainstream media (who may have based their expectations on incorrect historical data).

Some others consider this historical data set is much less relevant, and other data to be more relevant. As a result, they may reach a very different conclusion about future property price expectations.

People place a different priority on the relevance of different types of historical data. That is how people can arrive at vastly different expectations of future property prices.

When people use incorrect and irrelevant data to develop their future property price expectations, there is an old expression that is appropriate "GIGO" - garbage in, garbage out.

by Fritz | 30th Oct 19, 5:31pm 1572409876

Church's analysis is highly flawed.

by cmat | 30th Oct 19, 10:09pm 1572426564

Generous to call it analysis - it's an exercise in high ignorance, if not deliberately misleading.

The guy is a charlatan writ large.

by CN | 31st Oct 19, 2:52pm 1572486746

Just because this approach has worked for him in the past 40 years, it certainly seems to be a correct framework to develop future property price expectations.

A number of property mentors use the same framework, and promote this to their students. (commonly referred to property prices doubling every 8-10 years)

Something that has worked for 40 years certainly seems to be very persuasive that it is the correct framework to use. The people using this framework have missed the mathematic limits and absurdity of this approach (which have been outlined elsewhere previously).

The other issue however is that he doesn't know what he doesn't know. Very few people know about or understand some specialised area of macro economics:
1) debt bubbles can lead to asset price bubbles
2) debt bubbles can take anywhere from 80+ years.
3) the numerous factors that combine to cause debt bubbles.

Only those that know and understand about debt bubbles, can see the potential risks. Others who don't know about or understand debt bubbles, can't see the potential risks. People who have an awareness of debt bubbles can choose to understand debt bubbles, or they can choose to ignore them, and bear the potential consequences of being uninformed. Imagine a scene where people are walking around at night and they see what they see under those conditions. Then there are a group of people who are wearing special night vision goggles - these people can see something else that the others without night vision goggles can't see.

The IMF & RBNZ has highlighted these potential risks, yet these warnings have been ignored as property prices have continued to rise and hence those risk warnings have been deemed to be wrong, and these institutions have been deemed by the public to be less credible.

If there is a substantial property price fall in Auckland, then people will look for causes and in hindsight, the answer will become visible and clear, and reported in the mainstream media. This is the experience with the debt bubbles in Ireland, US, & Iceland. However I do note that in those instances there has also been a misattribution of the causes of property price falls.

by CN | 30th Oct 19, 11:28pm 1572431312

Here is a chart that summarises Church's analysis of historical data - look at the chart showing average annual sale price since 1954 from Barfoot's

https://www.interest.co.nz/opinion/87770/gareth-vaughan-david-chaston-c…

by Fritz | 31st Oct 19, 8:51am 1572465073

You don't think there's a whole range of factors that are different now to the past? Church seems to ignore this reality, and seems to have an irrational belief along the lines of 'because it's happened in the past, it will happen again in the future'. Totally unscientific viewpoint!
Since the 1970/80s we've had a whole range of factors that have supported higher and higher prices. Most of these supporting factors have now been exhausted.
For example:
- Growing numbers of women entering the workforce (increased household income)
- Lower fertility rates (less children equals more disposable income)
- The demographic surge of baby boomers entering house buying age in the 1970s and 1980s
- Lower and lower mortgage rates, now at record lows
- Until the last 10 years, housing by international standards that was relatively affordable. Coupled with NZ's lifestyle, this saw lots of middle class British immigrants come to NZ in the early / mid 2000s, pushing up prices. As we all know, NZ housing is now severely unaffordable by international standards, so the attraction of affordable NZ housing no longer exists
- More options now to live in the regions, work remotely etc. Which places less premium on Auckland

by Houseworks | 31st Oct 19, 9:18am 1572466705

You missed some "supporting factors" that dont suit your 'reasoning'

by CN | 31st Oct 19, 10:06am 1572469618

Can you tell us, what are those "supporting factors" you are referring to? Want to understand what you are referring to specifically and don't want to make any assumptions that would cause us to misunderstand you.

by Fritz | 31st Oct 19, 10:42am 1572471746

Tell us those supporting factors then, that differ from the past.
Look forward to hearing from you.
Pretty cheeky to question my 'reasoning'. You have none! Only blind faith.

by Houseworks | 31st Oct 19, 11:30am 1572474650

C'mon Fritz look who is "cheeky" now, when someone says something you cant handle you come out swinging or even playing the victim.... I wont bother to answer your question this time, and only if you can remain calm... really I think you only want someone, anyone, who will validate you and agree with you

by Fritz | 31st Oct 19, 11:38am 1572475129

Typical. Ad hominen.
No arguments, hence you revert to ad hominen.
Hopeless.
Blind faith is always doomed to fail.
Go on surprise me. You should know by now that I will acknowledge other valid perspectives, provided that are rational and not just trolling.
Also, unlike you and your trolling mates, I show humility and actually acknowledge when I am wrong.

by Houseworks | 31st Oct 19, 12:01pm 1572476506

No mate you are the one with completely blind faith whilst you sit with your head in the sand. Your position doesnt work for you and you know it. You are kidding yourself thinking you are unbiased. That's all.

by Fritz | 31st Oct 19, 12:26pm 1572477998

I should have known by now any intelligent, and rational discussion with you is a waste of time.
good luck

by Houseworks | 31st Oct 19, 12:41pm 1572478882

See below

by Houseworks | 31st Oct 19, 12:38pm 1572478725

Intelligent and rational? Is that what you call your phoney predictions until 3 months ago. Didnt you also cheer along other intelligent beings with equally gobsmacking pronouncements :)

by CN | 31st Oct 19, 11:43am 1572475430

You are free to choose to not answer the question. Remember that if you want to be understood, you will need to tell us what you think and believe, and your perspective. That is how people communicate and discuss ideas. Otherwise how can anyone understand you? Unfortunately, humans are not mind readers.

by CN | 31st Oct 19, 11:04am 1572473083

Agree with you Fritz. Current conditions in the Auckland residential real estate market are very different to those of even 10 years ago, let alone 40 years ago.

by cmat | 30th Oct 19, 2:02pm 1572397338

@printer8
"Your premise is simply based on analysis of historical data, and not once have you considered even a single current factor influencing the market."

All the lols.
Every single last one.

That's some seriously deep irony.

by printer8 | 30th Oct 19, 4:03pm 1572404592

Hi cmat
Remember of the old adage; "past performance is no indicator of future performance".
The way in which you are analsying data simply produces a trend of past performance which has little validity about predicting future market trend especially in a changing market. In 2016, applying your methodology and the resulted trend you would have been predicting house prices still continuing to increase in 2017 and beyond.
If you care to troll my postings you will find that during 2015/16 I was saying that price increases were not sustainable, and in October/November 2016 I was posting that the market was cooling (it did later have a single month higher - March 2017 - when it peaked again), and when the DGM were predicting a bubble burst I disagreed; these are not lucky guesses - they are about looking at market conditions and factors driving the market.
The detailed analysis you do based on historical trends will miss a changing market and only show that change long after it has happened. Not a good strategy or basis for either investing in property or if one is a FHB.

by CJ099 | 30th Oct 19, 6:24pm 1572413046

:P Nahh we can see the results now in glorious technicolour! You're just more Blaaaa....

by cmat | 30th Oct 19, 10:05pm 1572426353

I'm very familiar with that adage (hence irony).
I don't care to 'troll' your past posts (only need to see who you side with here)

OK, sure.
I'm not looking at historical trends.
I'm looking at the *current* trend and *current* confluence of factors.

by Ex Expat | 31st Oct 19, 10:16am 1572470189

Current short term trend seems to be slightly up. CoreLogic increased their estimated value of my home to 98.7% of RV as at 30/10/19. A Google search on my previous posts shows it was 100% on 21/10/18, so the longer term movement is down, but minimal.

by house hunter | 30th Oct 19, 11:58am 1572389908

Market seems finely balanced right now. Good stuff seems to be selling quite strongly, but flawed properties are just sitting there unless priced appropriately. I wouldn't be surprised to see the market ease downwards slightly over the rest of summer, but I'm not betting on it. Actually I recently bought a house, so you could say I'm betting against it!

Will be interesting to see if the government tries to reduct immigration coming into election year to try to win a few votes. The question is whether they can get the numbers down without putting a dampener on the economy.

by mikekirk29 | 30th Oct 19, 12:36pm 1572392196

Auckland residential sales to end of August 2019, 12m = 20,149 (in 12m to end of August 2018 it was 21,489)
That is down 6%
6m to end of August 2019 it was 10, 498 (versus 11,787 in same 6m of 2018) down 11%
In 3m to end of August it was 4798 v 5316 for 2018, or down 10%
Hence, market trend is not improving.
And as October 2018 was massively over-inflated due to final sales pre OBB, it is inevitable that this October will disappoint by reversion to the mean.

by house hunter | 30th Oct 19, 6:26pm 1572413198

Would you mind clarifying your last statement? Are you saying that October sales numbers will be low or are you talking about prices?

by mikekirk29 | 30th Oct 19, 7:39pm 1572417568

October sales will fall around 15% compared to 2018 and be slightly below 2017

by Fritz | 30th Oct 19, 12:39pm 1572392367

What probability do people place on deposits being widely reduced to 5-10% for FHBs?

by CJ099 | 30th Oct 19, 12:52pm 1572393149

Very high probability of increased "soft lending" by the banks to maintain the property market. OCR rates can only fall to a certain extent.

by tothepoint - d… | 30th Oct 19, 1:59pm 1572397191

Hi CJ,

Please note that nobody has set a limit on how far in the negative direction (or how far in the positive direction) OCR rates can move.

TTP

by CJ099 | 30th Oct 19, 6:27pm 1572413272

LOL you're quite happy for them to move in to negative territory just so you can make a sale! That will be funny when the banks are paying me again, it use to be called savings. :P

by CourtJester | 30th Oct 19, 1:22pm 1572394920

Well, Kiwibuild 2 had that 5% figure mentioned, so very high. But if Kiwibuild 2 performs as well as Kiwibuild 1 did, zero. I'm looking forward to buying a 5br house with a swimming pool, 100m from the beach with a 100k deposit.
Lol.

by Chairman Moa | 30th Oct 19, 4:00pm 1572404406

All the signs are showing the tide will go out.. by all means buy more houses if you think you can capitalise on the increase on house price!

https://www.brisbanetimes.com.au/business/markets/scary-situation-billi…