Big variations on the sales rates at Barfoot & Thompson's auctions last week - 75% at on-site auctions, 34% on the North Shore

Big variations on the sales rates at Barfoot & Thompson's auctions last week - 75% at on-site auctions, 34% on the North Shore

The number of properties auctioned by Barfoot & Thompson last week was little changed from previous weeks, although the percentage that sold dropped slightly.

The agency marketed 201 properties for sale by auction in the week from 16 to 22 March, compared to 206 the previous week and 216 the week before that.

Sales were achieved on 97 properties, which gave an overall sales rate of 48%, compared to sales of 58% the previous week and 55% the week before that.

However, there were big variations in the sales rate at the individual auctions.

Three quarters of the properties were sold at the on-site auctions, while the biggest auction of the week was on the North Shore where 50 properties were offered but only a third were sold (see table below for the full break down).

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

The comment stream on this story is now closed.

Barfoot & Thompson Residential Auction Results
16-22 March 2020
Date Venue Sold Sold post Sold prior Not sold Postponed Withdrawn Total % sold
16-22 March On-site 11   4 5     20 75%
17 March Manukau 22   1 19     42 55%
17 March Shortland St 7     3     10 70%
18 March Shortland St 13   3 18   2 36 53%
18 March Pukekohe 1 1 1 3     6 50%
19 March North Shore 12   5 29 1 3 50 34%
19 March Shortland St 3   1 4   1 9 44%
20 March Shortland St 8   4 13   3 28 43%
Total All venues 77 1 19 94 1 9 201 48%

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74 Comments

will they be able to complete on settlement date?.....

One big box comes out and they can move their smaller packing boxes in..

To date, the housing market has held up pretty well - at least compared with the sharemarket.

But a looming recession will almost certainly slow housing activity down. Nonetheless, a hearty bounce-back will likely follow - though that seems some way off.......

TTP

To date, the housing market has held up pretty well - at least compared with the sharemarket.

On a bright note, the Smartshares Property Fund is up 4% this morning. And as much as possible, you should compare like for like, so if I were you, I would be cheering for the Aussie banks.

Last week you were saying rising property prices were a destiny...

Yeah sure, TTP, real estate resides in a parallel universe.
Property clock and everything.

Absolutely delusional.

Brought to you by [insert your preferred real estate lobby here]

18
up

The property market and its many disciples enjoying their last supper.

Lol. SO true. The capacity of humans to self-delude can be really astonishing.

Hope those buyers are enjoying that last taste of bubbly.

end of the cycle

Which one? The super debt cycle or the one they refer to on Newstalk ZB?

Feels like Mayan Calendar cycle atm.

Perhaps in a thousand years a new civilisation will find a crumbled sky-tower covered in native bush and wonder, what happened here?! A property bubble.....a really big property bubble.

They'll call it the remains of a Temple, and they'll be right

Isn't Dalio suggesting this is the short and long debt cycles both expiring at the same time?

Yes, that is basically Dalio's thesis in his latest book. The last end of the long debt cycle was the Depression of the 1930s. What's weird is that he shamed himself a bit by saying "cash is trash" just a few weeks ago about the current market, but exact timing is impossible. Meanwhile Buffett has/had $128 billion in cash to invest.

Yes I was rebalancing my portfolio end of last year and held more stock that my gut told me based on his cash is trash comments. But still sold a reasonable amount of my IVV holding, tracking the S&P 500 and purchased a Gold ETF is USD - based on his advice. Will see how that play works out this year.

Interesting the opposing views - Dalio/Buffett. Looks like Dalio admitted he got it wrong, but wasn't sure how the market would respond to the virus.

Enjoy your input BTW. Some clarity among the chaos.

Was he saying "cash is trash" in the context of buying long term bonds instead?

Long term bond yields have fallen, meaning that bond prices have increased.

The US listed ETF, TLT has increased about 20% since he made that comment (price rose from 136 to 166 currently)

Dalio's short term debt cycle & long term debt cycle

That's exactly what many commenters on here could see. The long term debt cycle for households was reaching its peak after 60 or more years. That was something that the property price optimists didn't know that they didn't know about.

Meanwhile, the property price optimists are busy extrapolating historical property prices for the last 50 years and concluding that property prices double every 10 years.

keep inflating any bubble, and sooner or later it will burst. Housing is no different. The only variable is the nature of the pinprick.

The last hurrah

Golly! Anastasia has a memorable mobile number?! Maybe it's as selective, and she's as real, as many other facts in the industry.....It's all about appearance and believing what you are told, after all....

Looks like Barfoots have cancelled most auctions tomorrow. Yesterday (from memory) they had around 23 properties listed at the Wednesday 10am session. Now just 2 listed.

I wonder if there was a little rush of keen buyers (maybe recently sold) trying to get into a new home before the brown stuff really hit the fan.

10
up

Im astounded!

Maybe buyers are desperate to spend their pre-approved amount before the banks change their minds...

Cant fathom why anyone would buy now unless it was a complete bargain...

The property investors I've been talking to still think they are immune to this. I guess if its people moving between homes who a little to no debt then perhaps it make sense. But no moving companies? How do you plan to shift? And if you're a FHB, how much debt would you want to take on now, or probably the next 12-36 months with the amount of doubt around employment opportunities. Makes no sense.

....and the reducing balance of your Kiwisaver that you were going to call-in for a FHBer deposit?

Yes this is turning into the perfect storm for the property market. I'm waiting to see how long it will take for property investors to move from the ignorance to fear paradigm. They seem to be holding their own at the moment.

"I'm waiting to see how long it will take for property investors to move from the ignorance to fear paradigm."

Moving very quickly for those property investors with property in Queenstown.

It is just a question of time before they panic. They will behave like the crowds now queuing at the supermarkets. It is just human nature - there comes a point where even the most delusional and optimistic views are overwhelmed by fear. Only a nudge is required before the mass movement starts, and once it starts nothing will stop it until the market finds a new balance.

"They will behave like the crowds now queuing at the supermarkets"

That is exactly the behaviour that drove buyers to pay excessive prices for property. It is called fear of missing out (FOMO). That is a typical sign at the top of asset price bubbles. Remember those frenzied bids at property auctions in 2015/2016?
Similar behaviour with
1) internet bubble 2000
2) bitcoin
3) US listed shares of companies in the marijuana business
4) share market just before 1987 crash

So many examples.

FOMO

https://twitter.com/MrBazza/status/1242049698992717824?s=09

Substitute the product that they're panic buying (toilet paper, canned goods, etc) with houses, internet shares in 2000, internet coin offerings such as Bitcoin, tulips, etc ...

i have seen tenants are asking for rent relief from their landlords and many are saying if you cant pay get out, in denial about where we are headed and think they will pick up another tenant that can pay.

It's all a bit insane - I've always found their to be a bit of a dark side to our landlord'ing that's developed in the country - mostly the greed but behind a smiley/friendly appearance of 'we're providing a service for the community'.

Now is your chance landlords to provide a service for your community - are you going to stand up and be true to your word?

"The Government has also said it will look to "extend no-cause terminations" and more details of that will become available in the coming days.
It is understood that will mean people will not be able to be evicted for not paying rent.
Tuffley said landlords would be unlikely to be able to find a new tenant at present, anyway."
https://www.stuff.co.nz/national/health/coronavirus/120495548/live-pm-ja...

We shall see in 3 to 6 months time. End of the road for many housing speculators.

Just a reminder, that is 97 buyers. In a city, with about 500,000 households.

I'm on sone expat groups and one person asked last week if they should complete on a property purchase because with the pandemic coming, she was worried house prices might drop and she would be left in negative equity. Most comments universally supported the purchase and that because of high immigration, the housing market could/would not drop. ZERO awareness that the virus might effect immigration or anything else for that matter.

I tried my best to advise but obviously that was not a popular opinion, because everyone was desperately trying to reassure themselves that their huge mortgage was not going to a problem.

At least at that moment, there were still a lot of utterly deluded buyers. I wonder if they still feel so confident today?

Confirmation bias in full effect.
You see it a lot here from a handful of commenters.

economists are forecasting a drop of at least 20% in Australia housing market but fear not NZ because we are immune to all that and we are 100% duffurent.

https://www.abc.net.au/news/2020-03-24/coronavirus-house-prices-to-fall-...

If the US see's 20-30% unemployment this year, which some a predicting, then we can't be immune to that. I think 20% could be the starting point if we see the same level of unemployment here. And if a number of babyboomers get sick and or die which is a possibility (I pray that isn't the case) but there could be the sale of a number properties/estates.

To things to invest in: funeral business and weight loss

Netflix appears to be holding its own as well..Liquor stores appear to be doing ok as well for now.

Furniture removal company...or storage company? Many will be dumping investment properties, and jobless will be abandoning rentals.

Martin North on his Youtube channel has made his housing predictions based on the unemployment rate
@5.9% = 15% to 20% drop in house prices
@6.8% = 20% to 30% drop
8.75% to 10% = 30% to 45% drop (most likely to happen scenario)
And if unemployment gets above 16% then up to 80% wiped off the price of property over the next 23 to 36 months.

Interesting that so many Airbnb's are now coming on to the longer term rental market all of a sudden, in many countries. Will this end our supposed housing shortage in NZ, at the same time the construction industry heads for trouble? Would like to see an article on here on this developing situation. Forget the auctions, it's over. We'll be in lockdown for the foreseeable future...
Rental market 'flooded' with former Airbnb properties:
https://www.stuff.co.nz/national/health/coronavirus/120510118/rental-mar...

Yip - I wouldn't be surprised if prices start to fall and owners of empty properties get nervous, that they will also list their properties and return to cash. Only 30,000 of those in Auckland aren't there?

The power of loss aversion could well be too much for multiple property owners - seeing the value of their portfolio drop significantly. I think we may see a repeat of the share market, in the property market, but delayed by 3-6 months.

The Greedy Warehouse is keeping there stores open

the government has told the warehouse to close just announced

Probably because people would be silly enough to head out window shopping around the Warehouse, not just shopping for grocery necessities.

I think you are right in your prediction of 3-6 month delay, IO. Banks and governments are basically putting a crutch under everything for four weeks so we won't see many (if any) transactions but you can only do that for so long before you need to stand on your own two legs.

Yeah property market transactions and data take a lot longer to come through. We'll go from pre-lockdown (today) to full lockdown (tomorrow), then to post-lockdown (when?). It'll be months before it all comes out in the wash. For now, pretty much zero will be happening, a complete freeze, followed by a deep recession no doubt. Everything just changed. My guess is that sharemarkets will continue down over time (to quite inexpensive levels), gold will go up (after the initial sell off), and the NZ property bubble just popped.

Agree - and if we get to the post-lockdown stage and another wave of the virus starts which is quite possible, its just going to prolong this for who knows how long - could be 12 months. There will be no confidence in future earnings, so how banks will have any faith in credit creation, I have no idea.

Agreed. As people loose jobs, return home and abandon rental agreements the banks will surely let all the interest only people stop their repayments. Picking it will be like the Asian Financial crisis when all the older people deep in rentals and debt as retirement planning were running around like the end of the world is coming, dumping rentals before the bank forced the sale of the family home in Zone to suppy some/any equity. Who needs that kind of stress, it certainly will not be good for those who need peak immunity to fight of Covid in the coming year.

I completely agree. It will not happen overnight, but it will happen. And the most likely time-frame is 3 to 6 months. Like in all Ponzi schemes, the first to get out of the market will be the ones who suffer the least.

How about prices? It will be interesting to see how the prices reflect current situation. Just read news about airbnb rentals, lots of them are converted to long term rentals.This will make the property investiments less attractive. More investors will likely sell their properties. Lets see how this turns out.

Also a matter of earnings. The whole country is going to take a pay cut this year so I don't see the collective P/E ratio for residential property to continue to go up.

I'm honestly going to miss all the comments here without there being able to be auctions for the next few weeks. Will be interesting to see what happens on the other side of all of this.

Mass mortgage holiday now in effect! PROPERTY PRICES CANNOT GO DOWN!

Mass bailout coming for anyone that has a mortgage? Seems likely. Best bet might be to buy now - the NZ public will carry you through anything.

Mortgage holiday, that means you only get a temporary relieve in payments - The loan is still there and if you lost your job, it will be unlikely you can get another one tomorrow or in a year if we go into severe depression.
But by all means, go and buy one if you can stomach it.

And interest is still being charged (& added to the loan) I believe.

Mortgage and interest holiday.

Are you sure interest is still being accrued? Wether it is or not is a crucial point

Did I hear correctly that Jacinda just cancelled all house auctions ?

Its going to get ugly from here. Sure there is a Mortgage holiday, but as your on holiday, the interest is working 24/7 and gets added to your mortgage. Cannot find a job at the end of this when the government stops bailing you out ? The housing market is going to crash, its simply unavoidable the government cannot keep propping up everyone up to their eyeballs in debt.

Also an interest holiday. You're not responsible for your investment decisions, the working taxpayer picks that up.

Are you sure interest is still being accrued? Wether it is or not is a crucial point

So if a politician in the know (about welfare) has bought a property in the last few days, does that constitute insider trading?

No, it's simple idiocy.

I believe all auctions will be cancelled from tomorrow, ideas of online auctions were floated but I know at least one RE agency which will suspend all auctions until after the lockdown. Sensible I suppose.

pretty hard to imagine there would be any bidders at online auctions under a lockdown.

Jacinda is just a talking head. To believe anything she peddles is to be conned. Too much debt caused the problem & the answer is even more debt. Really? Who'd work when you can get paid for doing nothing. It's a stupid stupid world with the people running it the worst of all.

Harcourts CHCH auctions today, 16 properties, 10 sold (6 above RV, 4 below),. 6 passed in,20 withdrawn

If we would actually account for those that sales actually happened by auction (not sold prior or post) numbers are actually very discouraging for sellers that have to pay for the cost of organizing it anyway. With the provided data sales range from 70% (Shortland St) to 16.7% (Pukekohe) with an average of just over a third 36.6%. Owners should really stay away from auctions.

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