Very few properties being withdrawn from sale or having their auctions postponed, suggesting higher levels of buyer interest

Very few properties being withdrawn from sale or having their auctions postponed, suggesting higher levels of buyer interest

Residential auction activity continues to build steadily as warmer weather and low interest rates stimulate activity in the housing market.

Interest.co.nz monitored 293 residential property auctions in the week from October 28 to November 3, up from an average of 120 a week over the previous few weeks.

Of those, sales were achieved on 130 properties with 120 selling under the hammer and another 10 being sold either prior to auction or immediately afterwards.

Although total sales numbers were up compared to previous weeks, the sales rate slipped back to 44% from just over 50% over the previous few weeks.

There was no difference between the sales rates in Auckland and the rest of the country.

Interest.co.nz was able to match selling prices with rating valuations on 84% of the properties that sold and of those, 57% sold for more than their rating valuations while 43% sold for less.

A notable feature of last week's auctions was the very low number of properties that were pulled just prior to their auction, with just one property having its auction date postponed and another being withdrawn from sale.

That suggests that in almost all cases there is sufficient buyer interest to give the agents and their vendors confidence to proceed on auction day, knowing that if a property doesn't sell under the hammer there will likely be conditional buyers waiting in the wings.

Details of all the auction properties monitored by interest.co.nz are available on our Residential Auction Results page.

Details of commercial properties that have sold, including their selling prices and yields, are available on our Commercial Property Sales page.

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16
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43% sold for less than their 2017 RV and thats before commission is paid..... doesnt really paint a picture of a market that on the up does it

13
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Just wait for the spin doctors to arrive.

From my observations in Canterbury in many cases where properties are selling at auction the vendors are meeting the market even if this means selling for less than they paid several years ago.

150 percent increase in number of auctions with minimal 6 percent decline in those sold immediately under hammer. Very very good results

The World Has Gone Mad and the System Is Broken...the prices of ....assets have gone way up and the future expected returns have gone way down while economic growth and inflation remain sluggish....though these assets’ low expected returns are not as apparent as they are for bond investments, because these equity-like investments don’t have stated returns the way bonds do. As a result, their expected returns are left to investors’ imaginations.

https://www.linkedin.com/pulse/world-has-gone-mad-system-broken-ray-dalio/

I am on record of not being in favour of further ocr cuts.

I am sure Mr Orr and Co. will take that into account before making a decision.

Cut Orr not the Ocr

11
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TTP is on his way.. he's enjoying in the wonderful Auckland traffic

At least our traffic congestions are on par with SF Bay area. Does that mean our houses are underpriced?

No traffic lights in Masterton!

Warm weather and low interest rates are NOT stimulating the housing market at all, sorry.
Jan-Sept residential only sales in Auckland, 2017: 14,993
2018: 16,353
2019: 14,492 ( - 11.4% cf 2018)

As you can see, 2019 is LOWER than 2018 and 2017.

If you want 12m series:

12m to end of September 2018: 21,565 sales.
12m to end of September 2019: 19,934 sales.

The 6m and 2m series' are no better. 2m shows a 16% drop since 2018 and 6m is 10% lower.

Agreed. Still lower and slower. That said there will be some pent up demand with many having sat on the fence waiting for the last six months and people just getting on with their lives. Stuff like people moving job, changing school zone for next year, retiring and exiting Awkland, downsizing etc, and now is the time to close that.

Wouldn’t be great if we could find out why people were selling? I once asked a real estate agent this question - he used to be CEO at Realestate.co.nz. His reply was that he wished REINZ would supply this information. Didn’t occur to him that the data would need to come from the salesperson, or indeed that he could suggest that his agency, Bayleys, could start to collate this information!

In Kohimarama I know a few sellers circumstances:
1. Couple bought house off grandfather, did some renovations and sold 3 years later
2. Developer sold after renovating and holding for 3 years
3. Marriage breakup and return to UK, two year hold
4. Sold a leaker to buy an apartment on Kepa Road for lower upkeep rather than retirement home
5. Developer sold large section after developing sections nearby
6. Developer presale
7. Marriage breakup

Moving out of Auckland must be a fairly common reason.

Marriage breakup would be far and away the most common reason for needing to sell but of course the RE lie and would never tell you that as it would place the sellers in the "Desperate to sell" category. So many people sell for no good reason, I think they just get bored and move for something to do.

12
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Almost xmas time.. cheers to all the RE agents

Last Christmas, I sold you my house
But the very next day you sold it again
This year, to save me from tears
I'll sold it to someone special

Once bitten and twice shy
I keep my mortgage
But you still catch my eye
Tell me, baby
Do you recognize it?
Well, it's been a year
It doesn't rise more...

Nice effort sir. This is much better:
Last Christmas I thought it was doom
But now the doom and gloom ... is turning to boom
Next year to save me from fear
I'll get me a home that's special.

Using Jan-Sep data to rebuke that low interest and warmer weather are not stimulating the market is the wrong time frame. The big OCR cut was in August and warmer weather arrived after September… Patience, you will see we, will have new all-time high prices in March 2020 (reported in April of course)

You missed this part from Mike's comment:
"2m shows a 16% drop since 2018"

We are taking about two things here. Yvil is talking market prices; for some unknown reason mikekirk is focused on/ besotted with number of sales.
Market sales or activity is really of primary concern to agents (and the number of commissions) whereas the overwhelming majority of people -both buyers and sellers - are more concerned about the price of houses.

Prices...where last month was negative year on year REINZ HPI in Auckland?

Hi Rick
Not significantly - Auckland region September median down about 0.5(?)% and don’t forget this is on a market that was still highly bouyant due to the (hordes as some claim) FBs.
Just on that September 2018/19 the loss of the claimed significant number of FB hasn’t had a tremendous impact - one wonders just what the extent of FB pushing Auckland prices up was compared to the factors that seem to have affected the rest of the country (low interest rates, local speculators and housing shortages)

Not significantly - Auckland region September median down about 0.5(?)% and don’t forget this is on a market that was still highly bouyant due to the (hordes as some claim) FBs.

Actually, Auckland only increased 0.4% year on year in September 2018. Below inflation. I recall 2018 being spoken of as a very flat year, albeit there were some sales brought forward to beat the FBB.

Median price-wise, looks like a whole lot of nothing much going on: https://i.imgur.com/nHZ2Msi.png

. . . and not that I want to argue it (we’ll not get to excited about it) but in a market in which buyers have a little more cash (i.e. can afford a greater mortgage ) and there are decreasing number of sales then things are going to get more competitive for buyers putting upwards pressure on prices. If I was currently an investor with a property I wanted to flick off, or I was one of those (but rare!) overseas owner and the market has been down - which it has been - but was showing promise of some upswing I wouldn’t be rushing in to dropping it off at the moment and probably raising my price expectations. So think about it; maybe, maybe with decreasing sales and given the current situation, there might be, might be upward pressure on prices.
And to those who state the obvious; 48% or whatever of houses are selling at auction less than 2017 RV - well it is pretty obvious that as the RVs were off a March 2017 peak and there has been a downturn in prices in the market - well that is pretty obvious and not particularly relevant as to the future of the market. Is that obvious? :)

Indeed. And the prices are patently obviously too high. Those with plenty of money or older and investors want price to go up. Other 50-60% want it to go down.

70-80%, only speculators want them to increase. But agree with you Mike.

I'm not great at economics, but what happens generally, when sales of products drop, and people want to sell more, or at least sell that product to cover costs.

I suppose houses in Auckland are immune to things like that.

If you cant sell your house at a price what is the most likely outcome?

Hi Mike,
thanks for posting those numbers. Would be interested in the 6m and 2m comparisons of 2017 with 2019 thanks.

Aug-Sept (2m) 2017-19: - 15% of residential (houses)
April-Sept (6m) 2017-19: - 2.2%
June-September (4m) 2017-19: - 4.2%

As you can see trend is weakening sales.

One month figures are never enough to go on because they get revised so much (not that these revisions are given any coverage...)

The increase in residential only sales in Auckland from Sept to October in 2018 was 21%
In 2017 it was 2.3%
This year figures will be released shortly and I expect them to be under 5%
2018 Spring was like a sale in a used car lot.
lots of transfers and sales were made as front-loaded sales, ie brought forward due to overseas buyer ban.
Now we have reversion to the mean.
Same at xmas when people load up on credit card and have to close Wallet for a bit in Jan-March.
Interest rate cuts will not make sales go any higher than in 2017.
The graph from 2015 - 19 was only temporarily interrupted by artificial injection of foreign capital last winter and Spring. This mathematical fact is not amenable to Pollyannas but some of us have to deal with reality as it is, not as we would like it to be

FYI, last year there was the foreign buyer ban deadline in October which created some urgent buying in the secondary market.

Oooh, someones not creating their intended wealth in their chosen industry...just saying

Actually they are if they're making more sales though getting their clients to be more realistic about their sales price to meet the current market. Otherwise you're just left with unsold property on your books. :)

The buyer's market is not long for this world

11
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Is China relaxing their capital outflow rules and our Govt removing the foreign buyer ban?

Because those two things need to happen before it becomes a sellers market.

I'm seeing mixed results. Rundown small units desperate for a renovation going above RV/expectations, and okay (but not excellent) condition 3 bedroom houses failing to sell at auction because buyers aren't willing to pay what sellers are holding out for.

Makes sense. Not many local FHBs will have a budget above say $700,000, so that's where the demand will be (in Auckland) - units and very rundown houses. Very few couples in their 20s/30s earning enough to buy yr $1m+ villas, and if the Chinese money is evaporating...

Agreed, the Chinese money inflated the million + market in Auckland. That’s all gone so now we wait 20 years for kiwi wages to catch up or the market corrects or probably a combination of both.

x2 agree. No tax paying working kiwi would pay $2m when they can pay $1m...or less

Yes the golden Asian money elephant is no longer in the auction rooms and now we're left with all the debt poo. And no China isn't going to relax it's capital flight restrictions anytime soon. Article fxstreet: China clamps down on capital flight risk as yuan weakens - Asian Review
"Chinese financial authorities have rolled out measures to stem capital outflows from the mainland. Banks will be evaluated on the amount of yuan wired offshore and the volume of foreign currency sold". https://www.fxstreet.com/news/china-clamps-down-on-capital-flight-risk-a...

How come not all auction results are listed in the residential auction results?
E.g. https://harcourts.co.nz/Property/895846/WH26887/32-Woodridge-Drive
Sold at onsite auction for far above RV, but it makes me wonder if the agency is not submitting all data and then wonder if a lot of 'not sold' are not submitted as well?

I'd assumed that interest.co.nz hire people to attend the (bulk) auctions and record results. As such, they don't have the manpower to attend on-site auctions. I could be 100% wrong of course. In general RE companies don't like to share information unless they have to. Having additional information gives them a considerable advantage.

In general RE companies don't like to share information unless they have to...

correct unless it suits them - when a $800000 house goes for a million or 1.2 Million :)

Although I've noticed that often they don't make the results of even very strong sales public. E.g. this one: https://www.uprealestate.co.nz/UPR14854

Probably they want you to call the agent to ask, so they can get another lead...

The email newsletters I receive seem to have switched in the last 6 months to entirely "Price undisclosed"

Rick
Well, would that possibly seem RE agents responding to a change in the market then?

Does seem the case. If you sell your house are you able to withhold the data so it never shows up on the free portals than most look at (Trademe and Homes.co.nz), I had previously though it was public domain data?

Ah, I see!
I made an assumption that they made the information public. Sure there is some saying about making assumptions that would suit this ...

120 to 293 is quite a spike

Yeah 44% is not great but better 25% or 30%. May be Vendors ready to meet the market but current situation in the last few weeks is different as is positive all around - RE Agents attitue and body language is very confident.

So yes at the moment market is better than what it was end of last year or early to mid 2019.

It is correct that the sentiments in the auction room is positive and also now RE Agents are not hesitating to give feedback of near around CV or more which was not the case earlier (earlier would be 10% to 15% below)

Have been observing in Pakuranga, Howick, Bucklands Beach and near by area (Must be positive in other suburbs as well).

Surprised with the change in market in just over a month as till September all indication was that it is low/ falling.

Will have to wait and watch if is the trend to stay or is just a Dead Cat Bounce.

IF for any reason - It is Dead Cat Bounce (false positive sentiment)....Than the next fall will be meaningfull for the FHB but their is a big IF......

No Dead Cat here mate, this is a real live Jumping Jack Flash,, Its a Gas.
Your comment that agent feedbacks have noticeably tightened is a definite sign and not only what I expected but also stated here earlier this year as what buyers should look for.

Will know soon but have doubts as nothing has changed in economy except interest rate which though can influence but not as much as required for the boom.

It will prove to be a dead cat bounce and falling from the edge.........

ONE other thing that has changed are your comments...much less believable.

Wait and see

Two comments: 1) There's a lot of money trying to get out of Hong Kong. It's in the high single digit billions for the past 6 months from what I understand. And 2) A friend who sells top soils to the developer market in Auckland has noticed things slowing. So, the new stuff in Auckland is slow to go right now.
PS: There are so many factors that feed into this market that it's hard to know what to believe, isn't it?

There are a number of high value (in the 20+ mil) being sold to well of Hong Kong residents in Sydney and Melbourne. Sydney in particular is being seen as a more attractive place than the old Auckland, simple for more business opportunities and easier business visa.

Good question, how does interest.co get its data. Ray White here in Christchurch often have the auctions on site, and those ones don't seem to pop up in the residential sales site with interest.co at all. Harcourts Grenadier have a liveauctions.co.nz website, which stays live for a day or two and data harvest is easy, and all these ones do pop up on interest.co. Better still, we need all the negotiated sales, tenders, the whole lot, not just auctions, if we want useful data for trend picking or whatever, there must be a way of collecting this info.

On another matter, Christchurch is still very much a special case, when it come to understanding the raw data: take a look at 23 The Brae, Mt Pleasant, https://harcourts.co.nz/Property/894938/SM0251/23-The-Brae sold for 530k a few weeks ago, RV was 670k, BUT, there was more than 140k or repairs needed to foundations and retaining walls to make it insurable, so the REAL price is actually closer to 700K, for a site with a prime view, in other words over RV, not under as the numbers would have everyone believe. I can go on, but it happens every day here in Christchurch, and looks like continuing for some time.

It's all a bit boring really. I currently favour buying a house in a Japanese rural town for 50k, retiring early, and becoming a hippy.

You might actually get one for free! BBC article: What will Japan do with all of its empty ‘ghost’ homes? "With more than 20% of its population aged 70 and older and the birth rate declining, Japan has a property problem: there are more homes than people to live in them".
https://www.bbc.com/worklife/article/20191023-what-will-japan-do-with-al...

It is true that Chinesse have found ways to overcome Chinesse restriction as well New zealand ban on foreign buyers otherwise how can anyone justify a sell of house in 2017 for $850000 going for 1.3 million plus ( Even after renoovation).

https://www.oneroof.co.nz/estimate/57-nelson-street-howick-auckland-manu...

Old times are back - Houses selling 10% or even 40% above CV (Since last year was 10% to 20% below CV).

Above one sell has given RE agents confident and are marketing all houses in and near that area based on that sell - highlighting it.

Has the market turned ?

Or

Is it a dead cat bounce ?

Can any experts from interest.co.nz answere in relation to the above sell.

Well there will be a few money launders slipping through but hopefully they'll be picked up later like these guys. Along with the REA's who sold them the property in the first place. https://www.newshub.co.nz/home/new-zealand/2019/08/police-seize-9m-in-as...

Well this approx 50% jump in just over a year or two in this market, should defintely raise the antenna of IRD and relevent authorities

Crucial comparison is to look at how many sell in each $200,000 price bracket in different years.
This shows that more sales are being made in lower price brackets and fewer in ones above $1.3m.
This is because prices above that need a bigger pool of (foreign) buyers to whack the price up, esp at auction.
That pool shrank considerably due to OBB, so these owners are not selling as cannot get what they think it is worth.
waiting for market to allow such a price again.
Good luck. Don't see that prior to 2026 in Auckland
Papakura is 22% up in first 9m of this year cf 2018 and this is inflating sales figures.
NSC and Albany Ward are well down on sales (-14% compared to 2018, jan-Sept)
AUCKLAND CITY - 5.7%
AUCKLAND CITY APARTMENTS DOWN 20%

In August-Sept 2013, Auckland residential sales were 5097. In 2019 it was 2919. In 2018 it was 3487.
This is why I am questioning of memes re "bounce" of Spring.

Agree that one should doubt the sudden bounce but my friend who is buying and am with him could feel and vouch that the sentiments are high and RE Agents seems to be very confident.

Whether it is a false alarm or confidence will know in a month or two with the auction result of houses on sell now with high expectation.

Went to two open home today and both were filled by buyers (Mostly Asian) and me too can confirm that was like old timesand houses are bound to go for much more than the sellers expectation. One house was in Goodwood Heights and another in Highland park and both open home at swarm of people and surprising most were Chinese so good news for speculators and RE Agents as Chinese have found a way not only to transfer money but also to buy in NZ.

Market has definitely changed and that is bad news for FHB as any changes / upward movement and FHB can kiss good bye to their dream of owning a house in Auckland.

"FHB can kiss good bye to their dream of owning a house in Auckland". That's a load of BS! And if REA's are facilitating non resident investors to buy in NZ and ignoring the Foreign Buyers Ban well they're going to end up in court for breaking the law.

Just saying what was observed and am also surprised.

What has changed in last one month - Interest rate have fallen but were already low - though slightly more now but can .2% or .3% less change the market to this extend.

CJ099 if you know any RE Agent specially in halfmoon bay and nearby area - check with them and if get an answere do update as am also surprised with number of people in open home - like a flea market and majority of them were Asian.

All I'm saying taimaiakk0 is that it is highly unlikely that you're getting a surge of Foreign Buyers since most other global property markets that are more popular than NZ is, are also off the boil since the biggest foreign buyer China has clamped down on it's citizens since 2017. And further to that you should never trust what an Real Estate Agent tells you when you go to see a property, of course their going to try and bid the prices up with BS so they can make a sale. Look at the actual sales data for the area that's what is important. :)

"if REA's are facilitating non resident investors to buy in NZ and ignoring the Foreign Buyers Ban well they're going to end up in court for breaking the law."
CJ you dont know that anyone is breaking the law, the buyers could be from Singapore, "Singaporean" chinese. Or they might have nz permanent residency or even born in nz, how could you tell the difference. Theres no need to get steamed up like a Rug Doctor until you know ALL the facts. Besides the market is going to fall isnt it so the buyers will be faced with HUGE losses.

Correct if they are over leverage passed their means to service it (HUGE loss) when price 'oscillate down' & interest rate 'oscillate up', Incorrect for those that leverage within their means - buyers mortgage serviceability commitments getting more into sanity territory, what the local FHB wants just that, 'lower interest' to service the things 'they could afford' and usually within area of their work and to raise family with 'manageable debt concern'.

@ taimaiakka0 & CJ099 - the refresh flurry, could be related to JK recent visits direct to the No.1 on CCP list? - it's not easy, even for Jacin let alone the rest of us, to make quick appointment to see him. When there's a will, there's away. The limited time funds out again, will surely be from ANZ customers? - not other banks. In the case of flogging the dead horse. Even the last gasp of breath matters.

Normally FHB on NZ wages though keen to buy their home, will bid but unlikely to pay a premium price unlike to two Asians when bidding - wants to out bid each other - Ego trip as few hundred thousands really does not matter to them in the larger interest where as FHB on NZ Wages cannot afford to be on ego trip as is already struggling even with low interest).

However many houses that are been bought to the market are those that have been bought in last few years by invesors/speculators and are now trying to get out of the market with no loss or minimmum loss. If the market was as good as the RE Agents are potraying why will than the investor sell at a loss or no loss - without profit unless is bad and are using this window opportunity to offload and minimize loss. If the market is good and on the rise should they not wait slightly more to get better result of their investement/speculation.

Confusing trend as everyone related to housing sector is upbeat though economy has not changed much excpet low interest rate but still a million or $800000 loan is a loan to be paid.

Don't seem to track certain agencies?