Barfoot & Thompson's auction numbers and sales rates are up compared to this time last year

Barfoot & Thompson's auction numbers and sales rates are up compared to this time last year

Activity is winding down in Barfoot & Thompson's auction rooms as we head towards the Christmas break, but remains elevated compared to this time last year.

The agency handled 134 residential auction properties in the week from 9-15 December, compared to 107 in the week of 10-16 December last year.

The sales rate was also higher this year with sales achieved on 63 of the properties last week giving an overall clearance rate of 47%.

A sales rate of about 50% has been fairly typical for the last several weeks, compared to sales rates of around a third at the same time last year.

The highest sales rates at Barfoot's auctions last week were the Shortland Street auction on December 10 and 13, which both achieved a 70% sales rate (see table below for the full results).

Properties from suburbs such as Henderson, Te Atatu, Glen Eden, Titirangi, New Lynn, Avondale, Blockhouse Bay and Mt Roskill were to the fore at both auctions.

Details of the individual properties offered are available on our Residential Auction Results page.

The comment stream on this story is now closed.

Barfoot & Thompson Residential Auction Results
9-15 December 2019
Date Venue Sold Sold Prior Sold Post Not Sold  Postponed Withdrawn Total % Sold
9-15 Dec On-site 7     6     13 54%
10 Dec Manukau 8 1   7 2 1 19 47%
10 Dec Shortland St 7     3     10 70%
11 Dec Mortgagee/Court 2         2 4 50%
11 Dec Shortland St 12     13 3 2 30 40%
11 Dec Pukekohe 2     7   1 10 20%
12 Dec North Shore 14 1   18 2   35 43%
12 Dec Kerikeri       1     1 0
12 Dec Shortland St 2           2 100%
13 Dec Shortland St 5 2   3     10 70%
Total All venues 59 4   58 7 6 134 47%

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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105 Comments

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From personal experience, no problems selling a FHB priced property on the North Shore at present. Three weeks and it even had a pre-auction offer.....SOLD. Looking at quality property in Tauranga and realistic sellers also moving their houses at just above RV's. Dreamers wanting hundreds of thousands over the RV's are having their places sit for months and months and they are not selling.

They're Back...........

Quality property in Tauranga? You mean that stuff that is now on average 86% of the price of a comparable Auckland property? Obviously, I live there and have done for about 7 years, and I can tell you, it isn't the place it was; even in 2012, on the traffic, congestion or jobs basis. Never mind that property was ~50% of Auckland back then! But, hey. Maybe they will shift the PoA here instead of Northland - which is also where the 'smart' money is heading at the moment ( and yes, we've just sold up there as well, to someone who thought they knew something we didn't - the Port move!) There's one born, or migrates here, every minute....

Have a good X-mas bw, and may 2020 bring you a bit more cheer. I really hope to see at least 1 happy, positive post from you in 2020

See what impact the rising mortgage rates rises will have on buyers. Herald article: Home loan interest rates set to rise off bank capital increase. "Starting from mid-2020, the banks which dominate the sector will have to increase their total capital to 18 per cent, from a minimum of 10.5 per cent now". https://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&obj...

CJ, just give it up, house prices are not going down and interest rates are not going up in any significant way

Have you not noticed Yavil that both BNZ and Westpac have increased their mortgage rates recently. Most 2 year fixed rates have now increased to 3.55%. https://www.interest.co.nz/borrowing/mortgages

Wow, they have raised their rates by a few %age points, the end is near… we are all going broke. Give it up, you don't have to admit you have been wrong for a long time but just give up persisting with the calamitous house price predictions

Yavil; Obviously you're too lazy as usual to read the Herald article, so here it is again: Home loan interest rates set to rise off bank capital increase.
" Home loan rates could rise by 30 to 60 basis points in response to an increase in the amount of capital banks will have to hold, according to economists at the country's largest bank.
After a year-long consultation, the Reserve Bank revealed its final decisions today in a move that will require the major banks to find an extra $20 billion over seven years. Starting from mid-2020, the banks which dominate the sector will have to increase their total capital to 18 per cent, from a minimum of 10.5 per cent now". https://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&obj...

… why do I keep wasting my time with you...

I'd be very happy if you never bothered me ever again Yavil. But I know you won't be able to resist trolling me as usual :)

CJo99
Yes they have risen slightly but if you had read the interest.co.nz article you will have noted that they typically do this in the quiet pre-run up to Christmas and then with the New Year they tend to reduce them again. The interest.co article commented that this typical and part of a marketing strategy to announce reductions when the activity for mortgages hots up again. Briscoes and Farmers are not the only ones who do this.
If you had also read interest.co articles you would know that the increased interest to meet the extra capital demand is likely to come from the more risky lending by banks - farmers and commercial.

P8 Yep you go on and completely ignore what's actually happening in the real economic world.

That is a bit rich CJ. 3 months ago unsubstantial you you were predicting crash I was posting based on indicators and drivers that there was likely to be an upturn. Rich indeed CJ

BS form P8, Go on show me the evidence of my comment from 3 months ago on that subject. You're just making stuff up now!

I think we should both stop wasting our time with CJ, he's ignorant and close minded, there's no helping him

Yes please P8 and Yavil NEVER TROLL ME AGAIN!!! Thank you. :)

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DGM MORTIFIED!

The market has not crashed. Instead, it has become more buoyant - with upward price pressure now evident.

I move that the remaining few DGM be ex-communicated from this parish - for making so many wrongful/misleading comments and false predictions.

TTP

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Ah yes, because only one opinion should be allowed on a public discussion forum.
DGM's should be banned from the Internet. No person who disagrees with TTP should be allowed to voice their opinions!
To the concentr... sorry, re-education camps with DGM's!

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Accroding to Ipsos' tracking of social issues, 62% of NZers don't think they would be able to afford to buy a property in their area in which they live. That's 4% pts lower than the average across 20+ other developed and BRICs countries and the lowest among e bubble-lovin' Anglosphere countries.

https://www.ipsos.com/sites/default/files/ct/news/documents/2019-12/7th-...

Based on this, I think you could say the incidence of DGM in NZ is comparatively high. You're just not aware of it. Now considering that most NZers are pig ignorant about the state of economics gobally; how banks are able to able to lend money into existence; and the lack of understanding about externalities related to debt-driven asset bubbles, I would say that the DGM plague is restrained. If more people understood the realities of it all, DGM would definitely be the new black.

Spot on JC ..... most kiwi’s totally oblivious to the current global risks. Sat with a farmer, architect and accountant recently, none were aware of the billions the fed are pumping into the US repo markets, the massive amount of speculation in the derivatives market, the 23 million WestPac illegal transactions under anti-money laundering and counter terrorism laws which has forced the resignation of the CEO and Chairman. The max fine for each breach is $50k so it’s going to hit their balance sheet hard!

TTP I know you get a lot of abuse but I did prefer reading your endlessly polite posts. This victory lap of sorts, though earned, leaves a bad taste.

TTP You must be mortified! Oh no! You still don't even own a house do you, where most people who comment on this site including me, do own their own home/property. So why haven't you invested if the market always keeps going up? Shouldn't you be ex-communicated from this parish as you put it since you're not part of the investor club.

TTP
I understand why you will be feeling a degree of pleasure. You have been consistent in your views which were contrary to those who predicted a bubble burst, and when that didn’t happen, a slowly leaking bubble. Even two or three months ago, when you were suggesting a firming of the market you were still being personally ridiculed as a REA and spuiker. Your comments were always based on rationale unlike the largely unsubstantiated comments of those who attacked you.
I note the comments in response to your posting above still focus on the negative. Sadly there seems a reluctance by many to acknowledge that their predictions were wrong.
Sadly, a counter to their position is seen as an attack and that one doesn’t accept contrary opinions. Many of those opinions need to be challenged for what they are.
I now await a backlash; not an acknowledgement.

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"a counter to their position is seen as an attack and that one doesn’t accept contrary opinions"
Are you kidding me? He literally said he doesn't want DGM's to comment on this website. Gee, I wonder why that's "seen that one doesn't accept contrary opinions"...
Plus he called DGM's morons, forlorn, even went as far as to suggest we're not commenting because we're out there delivering junk mail. But I'm sure none of these were actual attacks, it's just the DGM's being oversensitive.

Hi CJ
I think if you re-read his comment you will note that he is being a little flippant.
I think that there are some very sore/touchy people here who have been proved wrong and don't like it. So yes, "oversensitive" is a fair assessment.

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OK, so I should assume the best when reading his comments, but you are assuming the worst while reading our comments. Double standards much?

That's not much of an admission for being persistently wrong for well over a year

I'm overly sensitive, because I want to own my own home! I am having my future ripped out from under me. Thanks spruikers.
I don't have a forecast for how I think house prices will move, but I sure as heck hope they stay flat or fall a bit more.

Hi Milennial Woman, Most FHB are feeling the same and are depressed but remember that politicians who can do something are not FHB so.... ?

The only choice that FHB have, as of now in Auckland is to pay in extreme and compromise their lifestyle for years to come - which is fine if doing for a decent house but will be for pigeon suhit house as that is only what can be bought with current rise and if any slow down will be worst hit as those pigeon hole will be worst hit.

CJ ,Probably the same person, multiple accounts to uptick themselves

I've NO empathy for the DGM.

They've been coming here and telling porkies for so long that they deserve their comeuppance......

When they've finally been purged from this site, the rest of us can get down to some intelligent, meaningful dialogue.

TTP

Comment reported. I'll report every single comment where you wish for a certain group of people to be "purged" from the website.
I encourage others to do so.

Well CJ,
That is certainly ramping it up considerably to single out a particular commentator out and encourage a co-ordinated personal attack - something far, far worse than what has been suggested so far.
If you consider TTP out of line, your comment goes well, well beyond the pale to anything he has posted.

Can you link a comment of mine advocating for spruikers (or anyone) to be purged from this website?

Well, yes, calling for everyone who disagrees with you to be summarily executed is bad. However, is it as bad as reporting the person who does that? This is a philosophical question that we won't have a clear answer to any time soon.

Comment reported? What a snowflake.

Honestly I’m surprised how restrained/polite TTP almost always is when responding to conspiratorial/exaggerated/misinformed commentary that is so common on this site.

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the rest of us can get down to some intelligent, meaningful dialogue.

Well, my compliments on your looking to turn over a new leaf, TP.

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Yes, it would be something we haven't seen before. I look forward to it also.

If the DGM made an effort to get their comments/forecasts correct - rather than launching personal/individual onslaughts on those here who do - then we'd be able to have a bit more respect for them........

TTP

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Well, that new leaf didn't last long...

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You really are a piece of work, every comment you make is at somebodies expense, and you expect sympathy for any backlash

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I've NO empathy for the DGM

Why? Empathy is a positive force in the world. I suspect you're only internet trolling, but what exactly is a "DGM"? It's a descriptor often bandied around, but it's really unclear as to what it actually is. To me, DGM is something I expect the likes of The Hosk, Leighton Smith, Granny Herald, retired bank economists like Tony Alexander to rabbit on about. By their oblique dialogues, someone like Ray Dalio would be a DGM extraordinaire. Should we be listening to two-bit celebrities at the end of the world or the likes of Dalio? Personally, I put more gravitas on the latter over the former (but perhaps I'm predisposed to "DGM").

So really I think DGM has little concrete meaning and it used by media and people simply looking for a reaction. Also, there seems to be a lot of emphasis in NZ and Australia to undermine any POV that differs from the "she'll be right" attitude. Not particularly prudent if you ask me.

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No empathy is a sign of a sociopath.

Self-absorption, lack of regard for others etc...

As above, J.C.,

How about quitting making personal/individual attacks on people.

It's hardly cricket.

TTP

How about quitting making personal/individual attacks on people

Do you mean the reference to "two-bit celebrities"? Not really sure that is a "personal attack." Hosk, Smith, Granny Herald, Alexander. Big in NZ perhaps. Thinking about the bigger picture, they're relatively unknown.

My point is really about the shallowness of what constitutes "DGM" and how Antipodeans tend to think economics understanding is based around binary emotional disposition. There is some merit in that, but that is more about behavioral economics.

Ex-actly.
I'll take Dalio any day.

Anyway, this entire thread is comedy gold.
I've logged and recorded it.

JC - what exactly is a "DGM"? - To me a DGM on this site atleast is particularly negative on the property market - case study RP ( sorry RP nothing personal ) generally with an agenda/axe to grind. We all have an opinion but when time moves on and statements made by DGM's have been proved so wrong ! Some of us more senior commenters have seen all these cycles many times before so have confidence in what lays ahead and know the scaremongering that goes on is just Bull $%#@ ! Sure there are concerns about different things happening in the world but here's my call on it - at any point in time there are always things to be concerned/worried about but those who can see past that and make decisions and move on benefit and those who don't become envious and potential DGM's ! Season's Greetings to all !

OK, so a "DGM" (to you) is based on your subjective feelings and house prices. I appreciate the honesty (if you aren't trolling of course).

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Purged eh? By their language shall he know them.
Purges are not for democracies

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Taking the P*ss .......... your words "......the rest of us can get down to some intelligent, meaningful dialogue."
You really mean your ilk can all sit round this forum "misleading" others, with your "one way chatter" and backslapping, saying everyone who disagrees is a loser
and hasn't got a clue about anything ....your moniker "To The Point"really means "your" point, as you don't read or research anyone's else's point(s) that you don't agree with....... more fool you.

Well actually TTP "and his ilk" have not been misleading anyone, they have been very much on point and correct with their forecast, it's the DGM that have been misleading FHB into wrongly believing that house prices were going down or crash, thus costing the FHB dearly.

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Taking The P*ss .. ...I'm not a DGM ...just a "realist" with the view that "past performance is not an indicator of future performance" ...also concerned about the debt bubble, just have a look at Aussie and what the rest of world thinks of their situation .....to say DGM's are misleading with their comments and should be "ex-communicated", just illuminates your ignorance and arrogance of the whole situation ....have any of you "property bulls" ever run other "successful" businesses ?

I'm not a DGM ...just a "realist"

GOLD

I'm not a flat earther ...just a "sceptic"

I'm not a climate change denier...just a "sceptic".

Market is very strong.

Many houses that have been sold have gone 10% or more above CV. Checking in Bucklandbeach, Howick area and it is not only houses with section but even townhouse. Crazy Time Back Again !

I just wonder how much of an effect the seasons have on property sales prices? Aside from a couple of weeks in late November where there was an absolute surge in listings in the areas you have mentioned, the number of listings have been the same week to week. The only difference being, the majority of properties listed in Winter had a very hard time getting over CV, whereas like you have mentioned, properties are selling above CV, and often pre-auction as well.

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Sales in Auckland City plainly improving.
Prices there also rising.
This has been case now for about 3.5 months.
Question is why the big improvement compared to the lousy previous 7m?
And indeed the lousy prev 3 years before that?
This question, and attempts to answer it, seem little posited.
As biggest improvement in sales in this period has been over $1.5m, compared to lower brackets, the drop in interest rates in last few months would seem not have been likely to have had as much impact as it might have been expected to have at lower quartile levels.
The HK trouble has been going now for 6m.
Some people may be transferring wealth and themselves to Singapore, which is not covered by OBB.
The sales improvement has been concentrated in new build areas and also in Auckland central.
Apartments are out of favour, in sales numbers terms, compared to more expensive property.

We of course will not get an answer to this sort of thing until stats start being recorded as to Residential status and ethnicity of buyer. I won't hold my breath.

"Question is why the big improvement compared to the lousy previous 7m?" Movement of HK money out of China. Yes that would be a correct assumption according to the South China Morning Post. The next question is; How long can that last until the Chinese authorities clamp down on it again?
Hong Kong may have lost US$4 billion of capital to Singapore this summer, says Goldman Sachs, as protests rattled nerves. "Goldman Sachs estimates US$3 billion to US$4 billion in Hong Kong dollars may have been deposited in Singapore this summer. Singapore saw a sharp uptick in foreign currency deposits in July and August". https://www.scmp.com/business/companies/article/3031401/hong-kong-may-ha...

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Hi cj099, House prices are rising not only in NZ but also in Sydney, Melbourne, Vancouver and Toronto.

In all of the above cities, Foreign / Chinese money was the main reason for the housing ponzi and now again it is starting in all the same cities where they were active earlier. Is it just a coincidence ?

Coincidence ?....I think not.

Yes, you're quite Richard, It's good that you've noticed. I normally get barrow loads of abuse if I try to voice my opinion on that topic and provide evidence as I have done in the past. There are very clear indicators that Chinese money is on the move again globally driven by desperate circumstances (HK unrest and eventual take over by mainland China). Here's the latest impact on Vancouver as an example:-
Better Dwelling article: Greater Vancouver Real Estate Prices Stop Falling, As Sales Jump
https://betterdwelling.com/city/vancouver/greater-vancouver-real-estate-...
And here's the consequences of the asset stripping: Greater Vancouver Households Are Going Broke Mega Fast.
https://betterdwelling.com/city/vancouver/greater-vancouver-households-a...

CJ099, Many commenting here like us are not experts but still can see a bigger picture behind the scene. Am sure so called experts are aware of it but vested interest prevents them from raising the issue until it becomes too big a problem.

If last boom was unsustainable than how come another boom from here can be. Bigger it gets bigger the problem in future. Disaster waiting to happen. 10 year cycle or 8 year cycle were true in past under normal circumstances not when Reserve Bank round the world are throwing free money or literally cheap to avoid the inevitable.

Consequence of all this is FHB, who enters last for FOMO will be the worst to be hit.

Correct, World Economy is in unchartered territory and rising debt should be a concern for all as any setback at this level will be unable to handle by many and the consequence will be...........

So one must pray that for a change this time economy is a way one street.....Only Up.

Yes agreed; People really need to look at the bigger picture to see what's going on. Looking at both Canada and Australia as larger scale examples, it's clear to see that both are feeling the repercussions of their false economies. The up shot being that overseas money can inject more capital in to the economy, but it just pushes up prices and creates more debt then it's net worth. Thing is that the Canadian's are more willing to do something about stemming the impact where the Australians are quit literally going through a fire sale.
Article: Hong Kong unrest sees residents look to Australian property safe haven. https://www.abc.net.au/news/2019-10-22/hong-kong-residents-buying-austra...

Hi mike
Really, really glad to see that you are finally recognising that the market has turned for the past 3.5 months.
3.5 months ago you were posting that your trend line analysis of the past couple of years' performance indicated a falling market/crash.
3.5 months ago I was telling you that there was a firming in the market based on real time indicators and drivers and that your methodology was flawed. You strongly disagreed with me and I also said that your analysis would not recognise the firming in the market until well after the event.
This is not an attack on you, but yet again, criticism of your premise and methodology that past trends (over two years) are an indicator of the future direction of the market. As I have repeated a many times as you put this data up, you totally ignore the real time drivers in the market.
You also continue to push that it is money from Hong Kong that is driving the market. You clearly have no experience of the current anti-money laundering and FBB processes in place; these are multi-tier covering (separately) REA, lawyers and banks where each has to do due diligence at risk of serious fines up to $5 million and imprisonment up to 2 years. All significant sums of money deposited into a bank account - including by trusts - need to be verified that they are not the proceeds of crime, laundering of money, or from an undeclared overseas source. Similar requirements apply to REA and lawyers. Your argument is simply conspiracy theory - this is fact, and not an attack. Look up the definition of conspiracy theory.

Well spoken, printer8,

It's good to read some commonsense and facts here.

TTP

What were those real time indicators and drivers, Printer8?

- Immigration
- RBNZ support via interest rates
- Other?

For Auckland, in addition to the two above,
- current housing shortage
- reduced number of listings
- increasing rental yields leading to anecdotal reports of increasing investor interest (e.g Tony Alexander)
- falling term deposit rates*
- economic headwind uncertainty with investors looking for more security in housing rather than the share market*
- long term property investors seeing an increasing likelihood that the market in Auckland has bottomed so capital gains are likely to supplement rental income
- assurance that CGT has been put to bed (which I disagree with)
- failure of KiwiBuild . . . .
Is ten drivers enough?

In terms of indicators; respected commentators such as Adrian Orr, Tony Alexander, and Westpac; increasing number of auction sales; increasing number of Auckland properties selling at 2017 RV and above.

Three things:
- I posted regarding this firming some three months ago, advocated over the winter that it was a good time for FHB to buy (only to be rubbished),
- from experience knowing the rigour of anti-money laundering and FBB process, foreign money (China or Hong Kong) was never part of it, and
- I recognise some negative drivers (e.g. affordability issues for FHB) but on balance the positive drivers are far stronger.

*With uncertainty in the global economy and falling interest rates my wife (+65) pulled significant amount of money out of a growth KiwiSaver account and did not roll over some TDs and reluctantly (because of work associated with rentals) put it into rental property. I know of three other boomers moving in the same direction.

Interesting. So only the RBNZ action on lowering interest rates and the lower listings overall were much of anything new compared to winter. Apart from perhaps more property investors deciding that the market will pick up? So not much has changed in your eyes in terms of drivers (from earlier times) except more RBNZ support and a bit of confidence?

Hi Rick
I think those drivers are pretty wide, and my postings during the winter were seeing the likely impact of these but it took the spring for them to take effect.

Thanks Printer8, yeah, genuine questions here. The list is pretty wide - was just questioning which ones were actually changed from earlier in the year when every month was negative year on year. The only ones that seem to show up much are the RBNZ interest rate support for the market, and confidence in the market. Confidence is obviously important in markets, if only to a point.

This is an intriguing time.

Dp

Update: I see CJ009 has withdrawn his comment to which the following was a response.

CJ099
I stated that there were negative drivers including affordability issues for FHB which is related to wages. I have also posted on many occasions that there is going to be an emergence of a renting middle class poor. I have explained why and we are seeing that now; the norm of NZders being able to afford a home is likely to be (very sadly) an aspiration of the past.
I have posted as what I currently see as ten drivers.
You keep making this assertion that there is money coming in from Hong Kong and China - what local evidence do you have of this other than conjecture.
A conspiracy theory is where there is a sinister explanation without evidence or rationale, when there is more rationale explanation as the ten drivers I have listed and is consistent with current anti-money laundering and FBB process, and recognized commentators.
Your assertion about Chinese/Hong Kong money as the current driver of the housing market upturn is just a conspiracy theory - a sinister explanation without evidence or rationale. It will remain a conspiracy theory unless you can provide solid evidence or a thorough rationale.
Expect to be challenged.

Nahh P8, You still haven't clarified "who" can actually afford homes above the 1.5 million mark? The only logical explanation is foreign money. And we do still have foreign buyers who are allowed to buy due to trade agreements with NZ, so how is that a conspiracy theory? Apart from that you're rambling at the wrong posted comment (Scroll down).
Oh and by the way it is happening, just look over the pond to Australia. South China Morning Post: Australia sees rush of Hong Kong millionaires as unrest rumbles on. https://www.scmp.com/news/asia/australasia/article/3023937/australia-see...

Market over $1.5m in AC improved last 3.5 months. Not rest of Auckland where running 12 m series remains flat. Rodney district better

Interesting: looking at sales over $2m in Auckland City.
Between June and October 2018 these declined by 4, from 82 to 78
In the same period of 2019 they increased from 64 to 78, a rise of 22%

Substantially greater increase than in lower price brackets.
The rich, either in Auckland or abroad, are plainly happy with recent developments and feeling more confident.
More on lower brackets shortly.

They better cash in quick before China locks down again. Article: Fears of China capital flight hang over newly sliding yuan. https://www.straitstimes.com/business/economy/fears-of-china-capital-fli...

CJ099 and mike
Yet again, your comments about foreign money (China or Hong Kong) being the drivers of the upturn in the market are simply conjecture and are contrary to the anti-money laundering and FBB multi-layered processes in place.
This up turn is consistent with what Adrian Orr, bank economists, and other recognised financial commentators were predicting based on current drivers in the market. An not one of these with all their collective wisdom, teams of support people and considerable real time data ever, ever mentioned an influx of Chinese or Hong Kong money as a driver.
This is not an attack - but your on-going conjecture and leap of believe like this fits the definition of conspiracy theory.

I’m not sure if pre-GFC Greenspan ever particularly mentioned overly aggressive lending, lax credit agency standards or the clear and present danger of credit default swaps at the time.

Apparently the housing boom of the time being simply reflective of various regional influences at play - nothing else to see here.

Of course he and others had plenty to say afterwards - when all their collective wisdom shone brightly.

AC is greatest concentration of Chinese in NZ.
Both manias in last 20 years in Auckland just happened to coincide with outflows from China.
Price is of course rising in higher price brackets esp as many fewer listings. However we will continue to differ on what is a good market. To me that means more than rising prices which reduce sales when over 4% pa

There's one key factor that you keep ignoring P8 and that is simply "wages". Auckland wages can simply not afford multi million dollar homes. Even if mortgage rates dropped to 1% they still couldn't afford this over priced property. So yes of course it's overseas money and has been for over 20 years.
So please explain again where this money is coming from? Or go gaslight someone else.

CJ099

Incomes may have a little to do with it, but I think fairy dust is the major contributor and if you have magical shoes you can click your heels 3 times.

My prediction is house prices will double and the median will be 2 mill because we don't need income to buy houses only fairy dust.

Adrian Orr:

“Almost $200 million in taxpayers' money invested through the New Zealand Superannuation Fund has been lost after the collapse of a Portuguese bank where the money was invested - supposedly as a "risk-free" loan.”

Oddly, this risk free loan was actually wiped out just weeks after being deposited – admittedly it’s a relatively small amount in terms of the fund but clearly Mr Orr is not infallible and not all seeing – and suggests the simple fact that he doesn’t see or recognise something clearly doesn’t mean it’s not there.

(I actually think Adrian Orr is fine – however, rest assured, he is human and capable of mistakes)

Not to worry we can easily claw back the $200 million in taxpayers' money by taxing all those empty homes in Auckland. :)

CJ099 you might need to buy yourself a jockstrap or bra... it is the only support you will get

Custard
You are going back a bit there. Also Super Fund was returning 17% annually at that time over a period of a few years; ever done as well?
RBNZ subsequently appointed him Governor so more astute minds than you and I think he is pretty good.

I’ll refer you to my previous Greenspan comment…astute minds at the time thought he was pretty good as well.

Happy to be quoted: correctly.
I said that HK may be transferring funds to Singapore, which country is not forbidden from purchasing in NZ.
I did not say it was primary driver, I was speculating, which is quite clear from he text of what I wrote.
What requires explanation is not uptick in market sui genesis, but a specific location in the market and a specific price bracket.
Many people have examined increase in % of sales taken by FHB in Auckland but they fail to explain why apartment sales have been falling all year, compared to 2018 and also why sales in brackets under $900k in AC have not increased v much when compared to higher brackets.
Commonly we are told, esp by banks, that key drivers of price in Auckland are interest rates falling and immigration remaining a high rate.
Yet, when interest rates have fallen, sales below $900k in AC (23% of market) have barely risen.
Bnaks have vested interest. They are not independent and quoting statements from Westpac in particular is rather inadvisable, given its record of bad behaviour in Australia recently.

It'd be politically risky for Adrian Orr and bank economists to talk about a possible influx of foreign money at this point.

I consider myself to be a fairly balanced observer, and I regard the recent sharp rise as a little suspicious. Prior to November figures not so much, but November figures definitely caught my attention. If the high end is taking off as Mike suggests then that is definitely something to monitor and understand.

Btw, I've been exposed to AML/FBB checks recently (bought a house, moved money around etc). Great to see them in place but I certainly didn't get the feeling it was a foolproof system.

I don't have any axe to grind here. On the contrary, I'm benefitting from the rising market. But the basic affordability issues would make me suspicious of any significant rises in the upper end of the market.

Exactly. When million dollar plus houses are being sold at premium, it raises concerns and need some investigation, if the authorities have intend (May be a speculative smoke but not without fire).

Who are pouncing on million dollar plus house and that too on fantastic premium - seen when money laundering / Chinese buyers were at peak. Vendors of those houses are getting 10% to 20% more than what they were expecting.

Also how come housing market is moving up in countries where foreign money was at play be it NZ, Australia and Canada at the same time.

Some experts / journalist should definitely look deepeeeer.

Here are figures for Auckland City sales in the lower bracket:

600 - 900k June 2018: 158 sales and in October 18 there were 154 sales (fell 2.5%)
June 2019: 161 sales and in October 160 sales: down 0.006%

Looking at those figures and back at the sales over $2m, presented a moment ago, interest rate cuts have made little to no difference. It is the rich who are back in market, not those reliant on mortgages.

However, if you compare the sales change for the two brackets and compare June 2018 with October 2019 the picture alters: the lower bracket shows a rise of 1.26% and the higher bracket a fall of 4.8%

Compare purely October 2018 to October 2019 and lower bracket rises 3.9% whilst higher bracket is exactly even (nil change)

The Auckland total 12m series of sales for 12m to end June and 12m end of October, excluding Auckland City, fell compared to 2018 by 1%. Same series for Auckland City rose 1.44%
Auckland City

Well, this is good information for potential FHB. Apparently while a few wealthy folk have purchased a few more higher priced houses, activity is not going bonkers at the lower end of the market. Seems to roughly align with the auction results, what's gone under RV vs. above RV.

Just to irritate our price friends a little more:

the 12m series is interesting for Auckland total sales.

That is, the total sales for 12m to end of any particular month.

June to October 2018 total sales in each of the 12m series from June to October showed total rose by 2.5%
In 2019 it fell by 2.1%

So, this year, last 5m show a declining trend, compared to 2018.

This may simply be because 2019 has not the benefit of people trying to sell and buy prior to OBB date of 22.10.18. Once this drops out of the comparison then we will have a clearer picture, esp in crucial months of Feb-May

Maximum price inflation of 2% per year keeping up with wage growth. I think this might be tolerated by the Government however we will increasingly have ghettos of have/have nots. Maybe that's their (neocons) plan all along - to make NZ like the US with clear inequality. It still makes no sense paying for a house that is minimum 40% over valuation.

Forget local sentiment...in the end house prices here will depend on how this all blows out...and I have no idea how (as most don't it seems). So don't kid yourself peoples...it's outta your hands...you're gambling.

https://www.cnbc.com/2019/12/10/fed-qe4-could-happen-before-years-end-cr...

Hi rastus,

Property a gamble?

Suggest you look at Lotto, horse racing and the pokies........

TTP

Ahh you still haven't taken the property risk have you TTP. Yet you're quite happy to push First Time Buyers in to mass of debt with the fear of missing out.

A curious situation has arisen up the North Shore bays. I was talking to a good friend of mine last night. He's a self-employed accountant who works from home. His wife passed away some years ago and his three sons have all left home. He lives in a large two-storey home up near East Coast Road. His house has a nice spacious modern basement one-bedroom flat which his local Barfoot's branch has had on its books for nearly two months but has failed to let. They have given him no feedback as to why they can't find tenants for him. This is the first time in 20 years or so that there has been such a long non-tenanted period. He's wondering why this situation obtains. Is it because Barfoots are not doing their job? (He has used Pinkneys in the past.)
Barfoots advised the rental he should charge.
He is now wondering if there has been a recent general drop-off in demand for rentals, and as he was driving down to Takapuna about 8.20 am the other morning he was suprised at the lack of vehicles on the road at what is usually a busy time.
Are these situations symptomatic of a larger economic problem or are they just coincidental anomalies?
(To all the theorists and generalists out there I apologize for introducing an instance of hard data into the debate.)

Hi streetwise,

Your mate won't have any trouble letting his flat in January - when the rental rush begins. (The rental market is seasonal.)

By the way, I'm pretty sure I know the identity of your widower mate. He might not be too pleased that you've breached his privacy on a public forum.......

You need to be more careful, my friend.

TTP

Similarly I notice last 6 weeks Matakana car park is two thirds empty on Sat market day. Year ago it was full

Professional profoundness indeed
Good counting

Hi Streetwise. Just asked a North Shore property manager about this. No problem renting good property on the North Shore. The place you mention hasn't rented, because the owner lives upstairs. Strong resistance to this with potential tenants. Needs to reduce the price get it moving.

Can I just point out that the last 3 months of increase in Auckland have been over SPRING. If we see continued price rises over the next 3 months as well, then i'll start making more noise where ever I can. To be fair I am a little worried, but i'm not losing hope that prices might stay flat a little longer given increases to interest rates and the global economic slowdown. It's going to take me a little while longer to save the required deposit for an Auckland home, and watching prices move faster than my deposit savings is scary.

I have studied the loss of sales for the first 10m of 2016 in Auckland, v 2019.
Also, the improvement in sales in Sept and Oct 2019, compared to the prev 8m, compared to 2018.

The total loss of sales for the 10m comparison was from 32,832 to 24, 251.
A loss of 8581 sales or a 26% decline.
Of those losses, 3602 were priced under $600k. (8517 v 4915) = down 42%
A lot of these were apartments (2221 v 1081= down 51%)
Section sales under $600k down from 1560 to 1232 (- 21%)

In the $600k to 900k bracket, losses were 1961 (11,608 v 9647) = down 16.9%
In the $900k. to $1.2m bracket losses were 1113 (6088 v 4975) = down 18.2%
In the $1.2 - 1.5m bracket losses were 868 (3343 v 2475) = down 25.96%
Over $1.5m losses were 1236 (4066 v 2830) = down 30.3%

We can see that the great majority of lost sales in last 3 years have been under $600k and over $1.2m.
Apartments and property under $600k have taken biggest % losses.
This bracket should have been assisted by interest rate cuts. That did not happen.

Turning to the difference and improvement between the first 8m of 2019 and the contrast with September and October: this takes form basically of a decline in the drop compared to 2018 for same periods.
So, Auckland 8m drop is 12.3% and in Sept and Oct this improved to a 9.9% drop.
There was no improvement in the price bracket over $1.5m
There was a 5% improvement in the bracket $1.2 - 1.5m (remember this is an improvement in trend, not an increase on 2018)
Bracket priced 900- 1.2m declined in the 2m period compared to the 8m period, ie sales rate declined and comparison with 2018 was worsened.
The bracket from 600-900k improved from 5.1% down in first 8m of 2019 to only 1.4% down in Sept and Oct.

Of the 2016 - 19 losses (8581 total) 5563 were in brackets under $900k (65%)
Only 1236 were in bracket over $1.5m (14.4%)

In the 3 years concerned, consents have probably increased stock by 36,000. Whilst sales fell.
In the same 3 years, interest rates have fallen.