Barfoot & Thompson's auction sales rate has been almost unchanged for the last three weeks

Barfoot & Thompson's auction sales rate has been almost unchanged for the last three weeks

Activity in Barfoot & Thompson's auction rooms remains remarkably consistent, in spite of the rapidly changing economic environment.

The real estate agency, which is the biggest by far in the Auckland market, processed 206 residential properties for sale by auction in the week of 9-15 March.

That compares to 216 the previous week and 170 the week before that.

Of the 206 properties offered, 119 were sold, giving a sales clearance rate of 58%, almost unchanged from from the 55% sales rate the previous week and 56% the week before that.

At the main auctions where at least a dozen properties were offered, the highlight was the Shortland Street auction on March 11, where 53 properties were offered, mainly from central Auckland suburbs such as Mt Roskill, St Heliers, Mt Eden, Mt Wellington, Epsom and Onehunga, with sales achieved on 33 giving an overall  sales rate of 62%.

At the big Manukau auction where most of the properties were from south and east Auckland, the sales rate was 57%. On the North Shore it was 54% (see table below for the full breakdown).

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 March 2020
Date Venue Sold  Sold Post Sold Prior Not Sold Postponed  Withdrawn Total % Sold
9-15 March On-site  8   3 8   1 20 55%
10 March  Manukau 16   5 16     37 57%
10 March  Shortland St 5     3 1   9 56%
11 March Mortgagee/Court 1         2 3 33%
11 March Whangarei 1     2     3 33%
11 March Shortland St 28   5 20     53 62%
11 March Pukekohe 3 1 1 3 1   9 56%
12 March North Shore  20   5 20 1   46 54%
12 March Kerikeri 1     1     2 50%
12 March Shortland St 8   1 4     13 69%
13 March Shortland St 3   4 4     11 64%
Total All venues 94 1 24 81 3 3 206 58%

 

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113 Comments

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11
up

Well done, sellers!
Any buyers care to explain their thought process to me?

Despite the advent of COVID-19 and all its unsettling effects, the housing market is destined to remain relatively resilient.

TTP

17
up

Lets differentiate between your opinion and destiny.

No one has a clue whats going on (you and I included).

14
up

ohhhhhhhhhhhh jeeeeeeeeeeeeeeez. Darwin award.

TTP ...did you live through the 1987 sharemarket crash ? ....this is going to be way bigger, so how can one particular market (let's say Auckland residential) avoid the shocks that will be and are forthcoming ? ..... I would very much like to know your "formula" for your deductions, as if you are "to the point" you would be a billionaire by now .... or is it a bored real estate agent, sitting in the office waiting for that call ?

Try working in Australia.

I work in a team of 18 people, and I am the only one that has worked in a recession.

TTP, did you even know there was a sharemarket crash in 1987?

You don't understand. The property market is DESTINED to thrive, even through the worst of times.

Sorry to break it to to jester but you haven't a clue. That's why you were eager to find out the buyers logic. But take careful note of the auction statistics and get a heads up that there is far more confidence in homes and properties than there is in volatile shares. Yes It's possible that property prices will take a dive however the 2018 to 2019 years showed that property is very resilient

Well, one of us is clearly clueless. We will see by the end of the year which one.

Giving yourself plenty of room

Excuse me? How long do you think it will take for the recession to run its course? If you're saying less than 9 months you're clearly delusional. But say it, how long?

Houseworks,

Just out of interest, what does the Finance Minister know that you don't know?

They've just made an announcement of a large stimulus spending package (12bn). Why do you think, would the government do that?

I will have to repeat it for you CN
"But take careful note of the auction statistics and get a heads up that there is far more confidence in homes and properties than there is in volatile shares." And "Yes It's possible that property prices will take a dive however the 2018 to 2019 years showed that property is very resilient" yes you have a point about the bailout package. But facts right now also speak for themselves before making any pre-judgements.

OK, I think this is the essence of the points being made above

1)
"there is far more confidence in homes and properties than there is in volatile shares"

2) "the 2018 to 2019 years showed that property is very resilient" - so in a historical context and taken at face value, property prices haven't fallen by much. And with no implication whatsoever to give any indication of future prices will stay resilient.

3) "Yes It's possible that property prices will take a dive"

Yes and not detailed reasoning. However you will remember I agreed with you around 2 weeks ago with the dozen or so reasons you gave for the property market. Stay Positive.

TTP, you know people here are going to archive that one for later.
A global recession is looking very likely, with job losses, and in NZ a lot of people have housing loans that are historically huge.

TTP,

Given your strong beliefs about the housing market price, would you be willing to sell a put option on Auckland house prices?

Specific terms:
1) type of option: American
2) underlying: median house price in Auckland - most recent price was $888,000 https://www.interest.co.nz/charts/real-estate/median-price-reinz
3) strike price: $888,000
4) maturity period: 10 years
5) premium to be paid to you: $285.00 (using the Black Scholes model) - remember the house price volatility is low.
6) mark to market monthly, with cash settlement

Doesn't that seem like a great deal?

"Despite the advent of COVID-19 and all its unsettling effects, the housing market is destined to remain relatively resilient."

OMG. Frame this.

TTP has the opportunity to take my easy $285.00 in the deal outlined above. In fact, I'm willing to triple it. 3 x $285.00 = $855.00

I'd be willing to do more, but the counterparty risk is probably capped out.

OCR has been cut to 0.25%. What impact do you think that will have on the housing market?

Is it that asset values are falling, or the dollar as we know it is on its last knees?

Don't forget - good faith & good credit.

For the dollar's strength look at inflation and the TWI.

11
up

Zero. And now it's your turn:
Immigration will grind to a halt.
Tourism will essentially stop.
Tens of thousands of people will lose their jobs.
Cash flow will slow down or stop for many landlords.
Banks will stop lending so carelessly.
There is a record number of new builds already in the pipeline.
Now you tell me, what impact do you think these will have on the housing market?

If you think slashing the OCR to almost nothing will have zero impact on the housing market you are misinformed and/or have a tenuous grasp on reality. This will put upward pressure on house prices and mitigate the implications of CONVID-19 to an extent, potentially a significant extent. Regardless, if the buyers you mention are in it for the long term then I think they have definitely made a good decision.

The adverse impacts from CONVID-19 (poor market sentiment, potential employment shock etc) will put downward pressure on house prices in comparison to what would otherwise have been the case, obviously. But as has been the case previously, the housing market crash you yearn for will prove illusive.

"the housing market crash you yearn for will prove illusive"

Hmm, what are the odds of two black swans happening in such a short time span?

1) Covid 19
2) House prices in Auckland falling significantly

Zero?

Pretty much no event, no matter how bizarre, has a probability of zero.

What do you think would be the worst case price change for the median house price in Auckland from the latest median house price for February 2020 of $888,000?

I.e at what price will be the absolute bottom for the median house price in Auckland?

The OCR was already almost nothing.

They reduced it by a factor of four. That is significant.

Which will amount to... hmm... $30 per week on the average mortgage? Maybe even less? Surely that's gonna compensate for several months of zero income for some people.

Depends on your start point. If interest rates dropped from 8 percent to 2 percent or from 1 percent to .25 percent both have been reduced by a factor of four yet one move is far less significant in nominal payment reductions, therefore will have less impact. So your carefully selected language doesn't tell the full story.

And a 12 billion dollar relief package to help people pay their bills ie rent and mortgages, and that's only phase 1. And if things get really bad retail interest rates get reduced to zero, this will be mainly to support business but home owners will benefit also. So if you buy or already own a house you are effectively living for free. Desirability for housing could possibly increase in these circumstances, it will be interesting to watch and see which way this swings.

RBNZ has already released information that they wont reduce OCR to nagetive. So it has very little chance to drop to zero. If they planned to do it, they would've done it already. Even OCR hits zero, your morrgages wont be interest free as there are always costs involved. That's why banks only changed their floating rates but havent made move for their fix rates. I'd like to tell you, things are not looking good for house market at the moment.Lets just hope it wont crash.

If they were slashing the OCR from 12% or 8% then yes it would have a big impact. But it’s not, it’s from 1%, itself an historically low level. Money has been extraordinarily cheap for a long time. As a tool the OCR has been blunted, this won’t have the impact they need it too.

Bit of a lagging indicator given speed of current state of affairs. Will be interesting to see this weeks and next.

Maybe they have a high deposit / equity with long-term job security?

10
up

All contracts for sale signed 4 weeks or more ago
Rear view mirror

11
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Mike
"properties for sale by auction in the week of 9-15 March" that is last week.
Auction sales are on the fall of the hammer and are unconditional.
I think that you will find that these sales were for last week are real time for unconditional and immediate sales being agreed to over the past week- not signed 4 weeks or more ago and rear view mirror as you claim.
Take time to note the auction date in the table.

11
up

The bomb about travel restrictions was dropped by the PM on Saturday and media are now reporting high likelihoods of recession over the last couple of days. One would think a true insight to buyers sentiment would show up in Auction rooms this week onwards. Time will tell.

basil brush
I agree that insight into buyer sentiment is evolving - just as the governments and our understanding of the virus and its economic impact is evolving. Trends in auction results will provide the earliest indicator of the impact of the virus on the market and - as I have previously posted - in this regard are particularly valuable.
Sadly and embarrassingly, Mike's comment and those who are liking it demonstrate that some of those who post comments regarding property on this site don't even understand the very, very basics of real estate.

"Trends in auction results will provide the earliest indicator of the impact of the virus on the market"

Nope. The global financial markets beat the local financially illiterate who read granny herald and then head off to an auction with a head fill of junk by light years..

If global financial markets crash 20% and NZ property market increases 10% has the virus crashed the NZ property market?

So that is your prediction for property, a 10% rise this year? Good luck with that.

Whoosh...(you're living up to your moniker).

It's a question of logic not a prediction.

Someone's out of their depth, buy a life jacket, before your head goes under.
Building a Straw man is not a question of logic.

What was the straw man?

rastus
I suspect you are one of the 8 who supported Mike's demonstrably incorrect post above.

I don't mind ignorance; I mind ignorance when people put themselves up as knowledgeable and I mind ignorance when something is shown to be demonstrably wrong but it is supported.
This thread is really telling as to some posters' understanding and ignorance of real estate.
An auction sale is very, very different to that of a common sale and purchase agreement.
An auction result is on the immediate fall of the hammer and is unconditional - please understand it is an immediate result and the auction sales (i.e. sales made) are reported here by interest.co for auctions (i.e. agreed sale and immediately unconditional) made last week.
The common sale and purchase agreement usually have conditions which can take four or more weeks to fulfill the conditions are usually made by a real estate agent, and once the conditions have been met (i.e. the sale goes unconditional) it is report by the estate agents to be included in the REINZ data the following month. So yes, there is commonly a delay of four weeks and even eight or more for sales and purchase agreements to be included in REINZ data posted on this site - but NOT auction results.
For this reason Mike is wrong; interest.co auction results are a valuable indicator as to market trend whereas REINZ results are delayed (and as Core Logic results are based both on completed sales and three months sales their data may be more reliable but takes considerably longer still to reflect a change).

As I said, I don't mind ignorance, I mind it when people try to act knowledgeable, and I mind it for the so far 8 posters who when told that Mike's post is demonstrably incorrect (i.e. totally wrong, without foundation, erroneous, inaccurate, off-target, misleading, unfounded . . . . ) yet some still support it.
Mike you comment and those that support it show that you and they are total bunnies when it comes to real estate when you do not understanding a very, very basic fact regarding real estate sales. It is a clear reflection of the rubbish that is posted on this site by many.
Mike to save your credibility - for heavens sake, please, please change your post.

I know it's frustrating but give up, it's no point arguing with ignorant people and there are a lot of them, as you pointed out just look at the numerous thumbs up on wrong posts

Touché

Sales won't be hit by people being afraid?
Open homes are being advised to be virtual, by REINZ advice.
Banks lend money
Banks will face HIGHER market costs of funding as international credit crisis explodes due to people in bonds selling en masse for USD.
People's criteria for loans will tighten I am afraid, credit will dry up.
Plus people do not choose to take risk on house purchases when they are worried about their health, job and income.
To argue that low interest rates are some sort of auto nirvana is garbage

One of the key aspect of the current government's stimulation plan is to avoid mass mortgage sells in population centres.

I trust the government will put far more efforts to avoid mass mortgage sell than putting more resources at AKL International Airport Border to stop, deter, record, trace potential COVID-19 infected travellers from AUS, US, UK, and EU....

Govt and bank efforts to shore up the property market will be about as effective as the Feds attempts to keep Wall street pumped- money down drain.
As you say, money better off spent on COVID-19.

So to clarify, are you saying that the Govt is going to look after the banks profits ahead of the peoples health?

Brings a poem to mind:

“Forward, the Light Brigade!”
Was there a man dismayed?
Not though the soldier knew
Someone had blundered.
Theirs not to make reply,
Theirs not to reason why,
Theirs but to do and die.
Into the valley of Death
Rode the six hundred.

Godspeed, brave property buyers.

16
up

Ain't nothing gonna stop those boomers getting their fill of property.

23
up

It could be the end of earth with the last spaceship departing for our new planet colony and there'd still be folks throwing money at an Avondale fixer-upper. "It's got good bones."

Lol

1.Get capital eaten by mandated inflation in a term deposit....or..
2. Buy an improvable rental that gives 5% rental yield with government support for incomes

10
up

How do you get your 5% rental yield if there is an economy crash happening?

If the govt decides to pay everyone's rents, it may (unfortunately) happen.

Govt is not an ATM machine. If it happens (unfortunately), we will have a serious inflation issue.Then what comes up will come down.

People should be negotiating rents **hard**.

You're going to have all the AirBnB stock come onto the market as rental stock in the next couple of months and flood the market.

Term deposit it is then - sounds like a no-brainer
Looks like a terrific time to be a renter, with rents likely to halve

Point #2 comes with "Lose 50-100% or even more of your capital in the next 18 months"... depending on your deposit size.
Edited to reflect your actual expected capital loss. Leverage works both ways after all...

CoreLogic updated their estimate of my Auckland Eastern Bays homes value to 104.3% of RV as at 15/3/20. I think that will be the high water mark for quite some time.

BTW Cheers to RP. Everything else I have is in cash. Very tempted by the current equity prices but I’m not hearing enough pain yet.

Don't go in yet. No business has worked out how this will affect their revenues or their costs yet, or even if they will still be trading in 12 months. Without that information, there is no way to value a company today, so the equity prices today are a fantasy.

11
up

The coronavirus pandemic will bankrupt most of the world's airlines by the end of May, the Centre for Aviation has warned

And this will have no effect on other asset markets?
Our eldest (30) is looking to be a FHBer. She's enamoured with a place wanting $545k. I said, "We'll back you, but I want you to offer $381k". At this stage ( and well done her, at her age, for having the 'courage' to present that offer!) it's "No" but the only offer made so far. So we'll see how it all unfolds. ( NB: Of course, when the RE calls back and asked her for the next offer, it will be for $375k )

nice -- and 325K might do it in 8 weeks time ! Extensive job losses on teh cards -- and many of those will be above average earners -- with serious mortgages - and little if any insurance -- 10 years of up up up -- and lots of people with no experience of down down down - and recession

houses will be sold - as business fold , debts are called in fire sales in many cases -- rentals and air bnb will be flicked very soon -- as people try and hunker own and hold on to their homes -

Hearing that Airbnb homes are now taken off the short term let market (due to cancellations), and being listed on trademe.co.nz for longer term tenants.

Someone mentioned that there are 40,000 AirBnB listings in NZ (now many of these will be spare and single rooms being rented out, not necessarily entire dwellings). Those renting out spare rooms are now experiencing a loss of income.

right on the mark,

many highly leveraged "property entrepreneurs" as they like to call themselves, are only one vacant property away from the house of cards falling down.

lots of jobs already being effected in the construction industry, we are going to see alot of under the table workers disappear, renters return to live with mum and dad, moving in with mates while they get back on their feet.

Do you think that a bank is going to give a mortgage to an airline hostess, a travel agent, a tour bus driver, a car salesman etc at the moment....???

Housing market will take a hit, first it will be a reduced volume being sold then gradually it will be prices

First home buyers take note. This is how you buy and reduce your risk.

Very smart, & very savvy.

To be fair, while house prices have inflated like mad, this increase is nothing in comparison to share market. So the house prices will not drop as quickly and as drastically as share prices. It will be more gradual. But honestly, who really thinks that house prices are likely to increase (on average) over the next 12 months? Not many people is my guess. I do not know the level of house price decrease and the impact on number of houses that come to market for sale. There are so many scenarios that can play out that will impact the severity of the drop, but a drop is what the market expects (and a drop market will have).

Ashley Church

52 sold in the same week last year. So an extra 69 were sold in Auckland this year.

Now, will be interesting to see the effects of Coronavirus on subsequent weeks.

Strewth...just checked 83 Atkinson Rd, Titirangi. Last sold in Oct 2016 for $992,000, around the peak of the market. Seems to have been nicely done up inside and has just sold for $995,000...which is a good price in today's market, slightly above its $960k CV.

Infometrics expect house price falls of between 5 per cent to 10 per cent over the next year.

https://www.stuff.co.nz/national/health/coronavirus/120331038/asb-heat-h...

The sharemarket is crashing, jobs will be lost and some people wont be able to service their massive mortgages.

This is the great reset.

30%+

I finally get the mad purchasing of toilet paper. It is debt specuvestors getting stressed.....

Pointless making any predictions number wise as it is impossible to predict anything going forward.
What we do know is that in any event like this there will be plenty of losers and everyone will be effected.
There is a certainty though that house prices in well priced areas will hold there value far better than overpriced ones.
The ChCh market will hold up nicely and there won’t be any panic selling like the sharemarket !

You need some toilet paper to wipe off what you've just said?

Well, I'm not a farmer but I'm pretty sure bulls don't use toilet paper to wipe off bullshit.

Spoke to a cousin in Sydney this morning. She is in the market as the family home has been sold and she wants a replacement. She is now backing off serious looking as already she has heard of two deals falling over as people are getting nervous they are paying too much when they look at what is happening around them. New Zealand will be exempt from such fear though as we are different.

ChC real estate has been stagnant for a while, without the current issues. There are so many "for lease" signs or "for sale" signs for commercial properties all over the city and I have noted that some of them have been around for more than 18 months! That is before the current situation. ChCH economy was in trouble even before the pandemic problems. Construction on a downturn. Construction workers starting to leave. ChC prospect is actually worse than Auckland, Wellington and even Hamilton.

People can decided to stay put and not sell their houses. sure. But there will be no "market" then.

I'm very familiar with both the AKL and CHCH residential markets and agree with your comments about teh economic activity. That said I think Chch may be less exposed to drastic drops in residential prices given it is a normally functioning property market. i.e. houses are worth a reasonable amount. AKL on the other hand is very different and a comparable property might be 2 or 3 times the value of the same place in Chch. Even if they both drop 20%, in absolute $ terms that might be $200-$300k on an average house in AKL but less than half of that in Chch.

According to TM2, CHCH will hold the value very well..

Buy CHCH realestate....we are renting commercial for way less than you could borrow and purchase. CHCH has overbuilt (excess supply). Add in the impending death of tourism, sports and pubs/cafe revenue in the next 3-6 months, and exporting of all the unemployed work visa people (reduced demand), you would have to be mad to go in now.

12
up

Bond market is indicating a crisis, Stock market is indicating a crisis , all economic forecasts are dismal at best, job losses forthcoming, defaults increasing , and, housing remains " remarkably consistent" as the article has noted. Talk about the greatest dislocation from reality and delusional , irrational exuberance. Laughable at best knowing this will end very badly.

“Expect house prices to fall for the next six months, ASB says - and another economist says its prediction may be too light.”
https://i.stuff.co.nz/national/health/coronavirus/120331038/asb-heat-has...

And what happens if the virus decimates the boomer population...

That would be a lot of houses coming on the market over the next 18 months

The offers to buy at current price levels are likely to evaporate pretty fast. Who is going to buy a $800,000 based solely on a virtual tour?

Then there will only be offers like the one that BW's daughter is making ...

Meanwhile there is an underlying housing shortage in Auckland, and inward immigration that is going to boost underlying demand.

Especially in a risky economic time when you might struggle to get mortgage protection insurance.

Significant when this prediction comes from a Bank - the ones who are always telling us prices will rise. They are only reluctantly stating such so they are on the correct (downward) side of the forecasting. They also now damn well it will be more like 30%.

So you often say banks (and their economists) are completely useless with their predictions… except when their prediction matches yours, then you're very happy quoting them

Someone said to me at lunch (re the comment I made above about a family offer on a property)
"That won't work! People won't sell their house for less than they paid for it. They'll just sit tight"
And maybe that's right ....for 'people', but...
There are going to be sellers in this market who aren't 'people' - banks who have inherited distressed debt. Now they won't tell you which ones they are ( the properties) for obvious reasons, but they'll be out there.
The trick is to bid and find the ones that the banks are looking to unload - they'll probably even give you the mortgage!
But there are, and will be more, properties out there going for 'off-market' reasons at 'off-market' prices....
Good luck all.

With the recent price falls in financial markets, there are margin calls being made. Some may need to sell their real estate.

Heard that some of the very wealthy are taking loans on their art collections.

We have forgotten about how many mortgagee sales can start to appear in a recession...

While I am loving the catastrophe frenzy in the comments, i am not so sure. People have to live somewhere. The average auckland rent is $582. That equates to more than the interest payable on an average auckland home (assuming a 20% deposit).
Some people will no doubt suffer, but i see no reason why anyone would want to see their house at a loss, or why a bank would force them to, when it is less costly to stay put.

Loss of employment or loss of income (due to reduction in hours), took on a large mortgage with a high debt service ratio and inability to maintain mortgage payments.

Look at tourism sector (apparently 400,000 people directly or indirectly employed here), Air New Zealand with potential layoffs, exporters (e.g logging)

Rent...is supposed to be more than the cost of interest payments! There's a whole heap of other costs and risk involved in being a landlord that need compensating for.
There's also the 'opportunity' benefit of selling a $500k place for $350k if the 'next one' you want goes from $1million to $700k. Same % change but falling prices encourage upgraders....and it's the higher-priced properties that are most at risk ( other commitments gone bad etc).

You forgot about the record number of new builds already in the pipeline, and the ones just about to be completed. And the million dollar apartments that have been on the market for 12+ months looking for buyers.
Flow of immigration will stop for an unknown number of months. AirBnB's will be converted to rentals. More rentals for less renters... what do you think is going to happen?

Agreed. Its obvious - basic supply and demand. Any investment is based on assumptions, that people complain about when they don't work out.

How many migrant workers will find themselves out of a job and on the next plane out of here? I imagine work visas are expiring every day, if they're no longer being replaced by new incoming visa holders then what happens?

And if kiwis are out of the job they may take anything they can get. Also the Government is less likely to support temp work visas if we have growing unemployment.

Yeah, I get what you are all saying. If people really want to sell their houses for a loss, I guess no one will be able to talk them out of that.

Re posting as seems not to be on here: this is rear view mirror stuff.
Does Interest have a forecast?
I do, and its on my LinkedIn site

I don't think it would be an unrealistic prediction to have everything selling at the last RV or below it before the end of 2020.

The Church of Ashley, already briefed this morning on Tele, the relief fund will be channeled to reduce debt, aka servicing loan for the Banks. The property/RE production industries already embedded into Kiwi bones, this Covid19 will only be temporary, only 12mths, in between difficulties? - the overall tax payer shall carry the burden. In the end? - only one winner past this Covid19... Banks, more than 60% of their loan book is into RE market, no one shall take away those profit from them... not even a bugs. If going to looks so? then just pass it on to the tax payers.

Ashley has gone full socialist, eh. What a surprise!

The property brick wall is coming. Its like the people that still think this is the flu it takes a while for reality to kick in.

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