Activity remains remarkably consistent in Barfoot & Thompson's auction rooms

Property

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

17th Mar 20, 10:15am by Greg Ninness

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Date	Venue	Sold	Sold Post	Sold Prior	Not Sold	Postponed	Withdrawn	Total	% Sold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%

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

113 Comments

by CourtJester | 17th Mar 20, 10:24am 1584393878

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

by tothepoint - d… | 17th Mar 20, 10:36am 1584394573

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

TTP

by Masher | 17th Mar 20, 10:41am 1584394863

Lets differentiate between your opinion and destiny.

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

by rastus1 | 17th Mar 20, 10:43am 1584394999

ohhhhhhhhhhhh jeeeeeeeeeeeeeeez. Darwin award.

by Crazy Horse | 17th Mar 20, 11:38am 1584398324

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 ?

by Masher | 17th Mar 20, 11:43am 1584398601

Try working in Australia.

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

by CN | 17th Mar 20, 11:49am 1584398944

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

by CourtJester | 17th Mar 20, 11:58am 1584399538

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

by Houseworks | 17th Mar 20, 1:26pm 1584404819

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

by CourtJester | 17th Mar 20, 1:55pm 1584406504

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

by Houseworks | 17th Mar 20, 1:58pm 1584406730

Giving yourself plenty of room

by CourtJester | 17th Mar 20, 2:49pm 1584409748

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?

by CN | 17th Mar 20, 2:37pm 1584409040

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?

by Houseworks | 17th Mar 20, 3:16pm 1584411419

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.

by CN | 17th Mar 20, 3:50pm 1584413420

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"

by Houseworks | 17th Mar 20, 6:30pm 1584423047

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.

by Voiceofreason | 17th Mar 20, 12:12pm 1584400356

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.

by CN | 17th Mar 20, 12:30pm 1584401447

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?

by cmat | 17th Mar 20, 5:49pm 1584420583

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

OMG. Frame this.

by CN | 17th Mar 20, 7:38pm 1584427129

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.

by Due Diligence | 17th Mar 20, 10:54am 1584395685

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

by Masher | 17th Mar 20, 11:14am 1584396873

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.

by Due Diligence | 17th Mar 20, 11:26am 1584397584

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

by CourtJester | 17th Mar 20, 12:02pm 1584399777

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?

by Due Diligence | 17th Mar 20, 12:26pm 1584401172

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.

by CN | 17th Mar 20, 12:46pm 1584402397

"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?

by Due Diligence | 17th Mar 20, 1:27pm 1584404829

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

by CN | 17th Mar 20, 4:39pm 1584416376

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?

by CourtJester | 17th Mar 20, 1:11pm 1584403867

The OCR was already almost nothing.

by Due Diligence | 17th Mar 20, 1:28pm 1584404902

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

by CourtJester | 17th Mar 20, 1:56pm 1584406562

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.

by JimmyJames | 17th Mar 20, 2:14pm 1584407676

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.

by Merrydaze | 17th Mar 20, 3:58pm 1584413883

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.

by company of heroes | 18th Mar 20, 9:51am 1584478261

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.

by Yesyesyes | 17th Mar 20, 2:49pm 1584409790

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.

by mealsonmeals | 17th Mar 20, 11:09am 1584396556

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

by Just Some Advice | 17th Mar 20, 1:56pm 1584406579

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

by mikekirk29 | 17th Mar 20, 10:35am 1584394504

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

by printer8 | 17th Mar 20, 10:52am 1584395575

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.

by Basil brush | 17th Mar 20, 11:00am 1584396044

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.

by printer8 | 17th Mar 20, 11:11am 1584396683

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.

by rastus1 | 17th Mar 20, 11:20am 1584397222

"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..

by HeavyG | 17th Mar 20, 11:32am 1584397957

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

by Mrs The Point | 17th Mar 20, 11:56am 1584399372

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

by HeavyG | 17th Mar 20, 12:14pm 1584400482

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

It's a question of logic not a prediction.

by Mrs The Point | 17th Mar 20, 2:36pm 1584408999

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.

by HeavyG | 17th Mar 20, 4:00pm 1584414006

What was the straw man?

by printer8 | 17th Mar 20, 1:07pm 1584403661

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

by printer8 | 17th Mar 20, 1:51pm 1584406274

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.

by Yvil | 17th Mar 20, 3:16pm 1584411373

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

by MadMax | 17th Mar 20, 5:57pm 1584421040

Touché

by mikekirk29 | 20th Mar 20, 12:06pm 1584659194

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

by xingmowang | 17th Mar 20, 10:40am 1584394841

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....

by rastus1 | 17th Mar 20, 10:47am 1584395279

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.

by Averageman | 17th Mar 20, 11:03am 1584396211

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

by ShoreThing | 17th Mar 20, 10:51am 1584395467

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.

by Brock Landers | 17th Mar 20, 10:51am 1584395506

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

by braindrain | 17th Mar 20, 11:13am 1584396802

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."

by Pacman_46 | 17th Mar 20, 11:24am 1584397490

Lol

by MadMax | 17th Mar 20, 11:06am 1584396409

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

by company of heroes | 17th Mar 20, 11:24am 1584397450

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

by youngdumbandbroke | 17th Mar 20, 11:30am 1584397829

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

by company of heroes | 17th Mar 20, 11:57am 1584399468

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

by MadMax | 17th Mar 20, 2:04pm 1584407080

https://www.interest.co.nz/news/104095/first-phase-govts-covid-19-suppo…

by cmat | 17th Mar 20, 5:55pm 1584420957

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.

by MadMax | 17th Mar 20, 1:54pm 1584406477

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

by CourtJester | 17th Mar 20, 12:16pm 1584400579

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...

by Ex Expat | 17th Mar 20, 11:10am 1584396608

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.

by ShoreThing | 17th Mar 20, 11:14am 1584396888

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.

by bw | 17th Mar 20, 11:15am 1584396907

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 )

by kpnuts | 17th Mar 20, 11:30am 1584397822

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 -

by CN | 17th Mar 20, 12:40pm 1584402029

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.

by Nzdan | 17th Mar 20, 1:45pm 1584405933

In 2017 it was estimated at 19,000.

https://www.infometrics.co.nz/390000-airbnb-guest-nights-auckland-18000…

by theglc | 17th Mar 20, 12:43pm 1584402226

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

by CN | 17th Mar 20, 12:00pm 1584399618

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

Very smart, & very savvy.

by Believer1980 | 17th Mar 20, 11:28am 1584397709

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).

by Basil brush | 17th Mar 20, 1:39pm 1584405577

Ashley Church

by RickStrauss | 17th Mar 20, 11:33am 1584397996

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.

by delboy | 17th Mar 20, 11:34am 1584398082

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-…

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

This is the great reset.

by rastus1 | 17th Mar 20, 12:32pm 1584401572

30%+

by Averageman | 17th Mar 20, 11:36am 1584398218

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

by Chairman Moa | 17th Mar 20, 11:45am 1584398729

for a laugh
https://twitter.com/ABC_COMEDY/status/1238011847279882306

by THE MAN 2 | 17th Mar 20, 12:03pm 1584399816

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 !

by Chairman Moa | 17th Mar 20, 12:05pm 1584399953

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

by CourtJester | 17th Mar 20, 12:18pm 1584400711

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

by gordon | 17th Mar 20, 1:39pm 1584405563

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.

by Believer1980 | 17th Mar 20, 12:18pm 1584400735

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.

by Basil brush | 17th Mar 20, 1:43pm 1584405810

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.

by Chairman Moa | 17th Mar 20, 1:49pm 1584406166

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

by Averageman | 17th Mar 20, 1:40pm 1584405603

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.

by PatrickW | 17th Mar 20, 11:57am 1584399457

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.

by Voiceofreason | 17th Mar 20, 12:24pm 1584401060

“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-ha…

by theglc | 17th Mar 20, 1:03pm 1584403435

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

by CN | 17th Mar 20, 1:11pm 1584403918

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.

by RickStrauss | 18th Mar 20, 10:09am 1584479375

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

by rastus1 | 17th Mar 20, 1:42pm 1584405748

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%.

by Yvil | 17th Mar 20, 3:20pm 1584411601

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

by bw | 17th Mar 20, 12:31pm 1584401477

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.

by CN | 17th Mar 20, 1:03pm 1584403391

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.

by Voiceofreason | 17th Mar 20, 1:09pm 1584403754

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

by CM | 17th Mar 20, 1:03pm 1584403388

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.

by CN | 17th Mar 20, 1:07pm 1584403639

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)

by bw | 17th Mar 20, 1:15pm 1584404142

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).

by CourtJester | 17th Mar 20, 1:27pm 1584404873

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?

by Averageman | 17th Mar 20, 1:43pm 1584405839

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

by Nzdan | 17th Mar 20, 2:02pm 1584406968

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?

by Korki | 17th Mar 20, 3:55pm 1584413731

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.

by CM | 17th Mar 20, 3:45pm 1584413124

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.

by mikekirk29 | 17th Mar 20, 4:33pm 1584416034

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

by Carlos67 | 18th Mar 20, 9:56am 1584478611

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.

by Keen Observer | 17th Mar 20, 8:05pm 1584428742

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.

by RickStrauss | 18th Mar 20, 10:12am 1584479567

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

by Carlos67 | 17th Mar 20, 9:32pm 1584433933

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.