It remains very difficult to pick price trends at auctions because of the relatively low number of properties being offered.
At Barfoot & Thompson's second online auction of the week, held on May 14, eight properties were offered and three sold under the hammer with the others being passed in.
A notable feature of the auction was that three of the houses on offer were brand new.
One of these was a was 4 bedroom/2 bathroom house on two levels with a single garage, on a 209 square metre section in Auckland's North Shore suburb of Hillcrest.
This had received a pre-auction offer of $1.175 million, which had been accepted subject to a better offer being received at auction. But there were no further bids for it and it sold at the pre-auction offer price.
Because this was a brand new home it's Rating Valuation was not yet in the system so it was not possible to do a sales price/Rating Valuation comparison.
The other brand new properties were two townhouses in the same development at Onehunga Heights. Both had three bedrooms and two and half bathrooms over two levels.
The larger of the two on a 278 square metre section received a single bid of $1.1 million and was passed in. The second, which was on a smaller section of 193 square metres, was passed in without receiving any bids.
The second sale of the auction was a traditional, two bedroom, brick home unit with a single garage in Epsom.
There was competitive bidding on this property and it sold under the hammer for $725,000 compared to its Rating Valuation of $680,000.
The final sale of the day was a 100 square metre, three bedroom Lockwood house with a double garage on a 1011 square metre section at Beachlands.
Like the first property of the day it had also received a pre-auction offer ($805,000), which had been accepted subject to a better offer at auction. But there was competitive bidding for this property and it sold under the hammer for $856,000, which was almost bang on its Rating valuation of $860,000.
The remaining properties were all passed in. They included a three bedroom/two bathroom house in Browns Bay that didn't receive any bids, and a two bedroom house on a 1012 square metre section in Glen Eden that was described as having development potential. There was only one bidder for that property. Although the bid was increased several times while the auction was paused for negotiations with the vendor, but the property was passed in with a top bid of $1.05 million.
The other that was passed in was a three bedroom house on a 735 square metre section in Avondale that didn't receive any bids.
Details of all of the properties offered at the auction are available on our Residential Auction Results page.
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65 Comments
This behaviour sums up everything that is wrong with the property market in this country!
"This had received a pre-auction offer...which had been accepted subject to a better offer being received at auction"
What kind of nutcase purchasers agrees to that!
"Here's my offer of $1.175 million. Take it or leave it NOW."
What's with all this 'unless a better offer is received at some contrive auction to make the stats look better' malarky?!
(NB: Oh. I get it now! It was an 'inside job'. Probably "sold" to connections of the vendor, who possibly has more to sell and wanted to establish a floor price or justify financing arrangements, but thought some 'outside' bunny might want to stand up in public and shout "I want to pay more than anyone else thinks it's worth!")
bw
Your comment suggests that you have not been involved in property sales or even bartering.
It is called negotiating brinkmanship. Has happened ever since the market bazars in the times of Noah and the Ark.
The vendor and purchaser are quite happy with the situation each pushing the other; so what is your beef???
The fact you see no problem with what's occurred reinforces my first sentence "This behaviour sums up everything that is wrong with the property market in this country!"
bw
"This behaviour sums up everything that is wrong with the property market in this country!"
What????
The vendor wants to sell at the best (highest) price - what is wrong with that?????
The purchaser wants to buy at the best (lowest) price - what is wrong with that????
Happens each and every day whenever a car is sold and bought. Ever bought a car subject to an AA check - no different, that is a condition of sale.
How a seller and a purchaser arrive at agreement is entirely up to them - absolutely nothing wrong, nor of concern to anybody else who wants to put a value judgement on it.
I find it incredulous that those who spout about property don't have a basic understanding of negotiating let alone that related to property transactions.
I agree, nothing wrong with seeing what the auction has to offer before committing to a sale. I guess if you've been outbid in these circumstances then it might suck?
Yeah, and in this market the purchaser holds all the leverage so should engage in nuclear brinkmanship.
Put and offer in and fully threaten to walk if they take it to auction.
Tell the vendor to either accept it or leave it, no inbetween.
That's brinkmanship.
BW & cmat, Printer8 quite correctly states that your posts clearly show you don't understand auctions
I would see that happen from time to time when living in Sydney a few years ago. Pre-auction offers were almost always for the purpose of "taking the house off the market", i.e. securing the purchase and not having to compete with other potential buyers at auction. Usually took quite a strong offer, and it'd help to do it very early in the marketing campaign. In NZ the practice does not seem common.
There is none so blind as those that cannot see.
b21
See what?
Substantiate your comment rather than a cheap throw away line.
Totally agree with you bw. Though for that property and probably lots more like it, it has dropped considerably in value. According to council records it sold for $1,720,000 in 2016, so not surprising that the vendor wasn't happy with just $1.175 million. And you're right he was probably lucky to get that.
The vendor built four houses out of that 2016 purchase. This is just one of them. Other ones are being sold by negotiation.
https://www.barfoot.co.nz/property/residential/north-shore-city/hillcre…
You'd hope "contributors" would do better research here...
That seems to fit right in with the comments on my first post! It's all a scam designed to set the prices of the remaining properties. This 'first sale' will quietly come back to the market in due course, being sold by the 'new' buyer.
Sharp
Man you are tricky. Its cost the owners 40k in agent fees plus advertising, administration and auctioneer
Which also shows just how massively over bloated the Real Estate Agents fees are here in NZ. In London you can sell a property for 1% commission fee, that includes all marketing costs and other expenses. Oh and they'll drive you to the site and show you around the property.
blowjoy (Kai), Really that just goes to show the complete lack of sales transparency with you real estate agents. Oh and by the way the link you supplied is pointing to completely the wrong property not the same property that just been sold. Or are you despratly trying to sell that one too since you're in competition with other RE agencies which also have it listed.
This is how pre-auction offers work. A purchaser makes one because it brings the auction forwards. I guess doing so potentially excludes bidders who don't have their ducks in a row. There could be other reasons though. I understand that the property goes to auction to stop negotiations between the vendor and only one potential purchaser, and allows anyone to chip in with a bid.
You should probably attend a couple of auctions before having too many opinions about the property market. I'm not defending the process. Nothing about an auction can be defended. But it is commonplace.
"This is how pre-auction offers work."
At the risk of repetition "This behaviour sums up everything that is wrong with the property market in this country!"
bw
You may keep repeating "This behaviour sums up everything that is wrong with the property market in this country!"
But not once have you explained why or substantiated your comment. You keep repeating something that is nothing more than a slogan. :)
I've attended plenty of auctions.
That doesn't mean, in this environment, that you can't challenge the perfect little process that the real estate agent is trying to run.
Why not ruffle their cake walk to auction and take control of the process away from them??
The bidder holds all the cards. Especially if they're a cash buyer.
Why not put a number down and threaten them - issue an ultimatum.
"That number is an offer on the table today and it won't be here on auction day, your choice, take it now or it's gone"
And that....is how it's supposed to work!
I've bought and sold in 4 countries; used Negotiated Sale through brokers and done myself; had successful and unsuccessful auctions; used Open Tender, Sealed Bid and even done my own Conveyancing.
And from what contact I've had with many Real estate Agent in New Zealand - I know more than them!
And I can tell you, this "Offer Accepted subject to going to auction" that is justified as 'normal practice' scrapes the bottom of the barrel in sales technique.
Agreed. Unfortunately in NZ it's been one way traffic for a while and the usual crowd this is "normal".
Whenever I have made an offer I put a 24-48 hour limit on it.
Possibly the agency wants the auction fee, and convince the seller that auction is essential. It's only essential for the agencies to try and pressure seller and buyer.
bw
You are right. Why would someone put an offer which can be used against him to leverage some better offers elsewhere???Take it or leave it.Why allow the Vendor or real estate agent to muck around with you???
Precisely!
An Offer is either accepted or declined. Conditional contracts are struck or not.
Any purchaser who agrees to such a condition as detailed above, needs their head read!
And justifying it as "Oh, this is normal negotiating practice. It's commonplace" just reinforces the depths to which this market has sunk. It actually really believes it's okay!
BW, I for one are your kindred spirit.
bw
Precisely!
Tripping yourself up here.
"Conditional contracts are struck or not." This is a conditional offer which has been struck; the condition is not getting a higher offer at auction.
No different to a vendor and purchaser agreeing to an conditional offer where the purchaser has a property to sell. In such situations a very common condition is that the vendor is free to accept any other offer after giving the purchaser having certain time to go unconditional - all very common.
This is about people having the freedom to come to agreement on whatever conditional agreements they wish. Why shouldn't they have that freedom?.
Whether one thinks the vendor or purchaser was an idiot in this situation is an irrelevant value judgement - one doesn't fully know the situation and each was free to act as they wished.
Agreed - it's why the NZ housing market functions so poorly. Dominated by folk with limited financial acumen, who are easily influenced by agents etc. with the government / reserve bank waiting at the bottom of the cliff with bailouts for anyone who might lose money.
Seriously?
If it is going to Auction it is going to auction!
If Someone puts in an offer then why wouldn’t the vendor still wants to go to Auction?
He has paid for auction costs which will normally be a couple of thousand minimum.
Who is to say that he wouldn’t get more at auction than the offer and that is why they go to auction, otherwise why wouldn’t they just put a price on it or by neg?
If the buyer that puts an offer in not like having the property go to Auction then they can withdraw their offer!
Not sure why people think this is not fair??
Can someone please, please, please explain why the following is not appropriate:
Purchaser: "I really love the house, and offer you $1.175m subject to finance of $x for which I have pre-approval from the bank subject to the bank's due diligence". (The reliance on finance as a condition negates the purchaser being a cash bidder at auction)
Vendor: "No I actually want $1.3m."
Purchaser: "Sorry, that is all I can go to."
Vendor: "Well, I want to go to auction as I heard there may be other interested parties with cash."
Purchaser: "Well the market isn't looking too good at the moment. It is the best I can do, and the best you may get."
Vendor: "Well, to ensure the best price in these uncertain times I am going to auction but if I don't get a better offer, OK then I will accept your offer."
Purchaser: "That's fine."
Vendor: "Great."
Both happily sign the conditional offer.
Note: Similar situation happens commonly when the purchaser has a house to sell and the vendor can accept another offer (usually with a time constraint for the purchaser to go unconditional). I recall that happening even 40 years ago.
So please, please explain why this negotiation is inappropriate and why this is so wrong that it is screwing the market.
And forget the value judgments as what each should have done, and any preconceived ideas as to whether the price is too high.
I'd say that's a negotiation that's heavily in favour of the vendor. As a purchaser, I wouldn't make such an offer as your give away your upside (the possibility of a better price). Better to just to get your finances fully sorted and turn up at the auction ready to bid. You might win the auction at $1.1m and save yourself a few bucks.
hh
You have not identified anything inappropriate.
You have simply made a value judgement as to how well the purchaser has done - that is not related to being inappropriate (wrong, illegal, unprofessional, improper . . .). .
I agree there's nothing illegal or unprofessional going on there.
To me the bigger point is that this poor negotiating strategy is relatively common, which points to something being broken somewhere.
You are appearing to be totally unaware bruce, for someone who comments. Do you know how pre-auction offers work... if accepted the auction is 'brought forward' and other interested parties are advised of that so they can be at the auction and make competing bids. From the vendors point of view, if you have committed buyers then why wait out the auction marketing campaign for the buyers to have negotiated on another property. This scenario happens regularly and not just post-covid
Thanks Housework’s, if the auction is brought forward for a serious buyer that’s a good thing as may catch competition unprepared
From the vendor's point of view, why would you agree to bring it forward?? It takes an incredible amount of effort for people to get ready to bid at auction, which is an unconditional sale. If the person wants to make an offer, then you absolutely need to hold them off for as long as you can and get them to attend that auction. That way you give others a better chance of being able to bid against them ergo best price for vendor.
Yeah, I struggle to see the benefit to the buyer of this arrangement. I wouldn’t accept that condition, and would start bidding from a lower price at auction? Can someone enlighten me as a newby to the property purchase process?
Couldn't agree more bw. I think it's a bit of a shame there isn't more of a 'buyer's agent' norm here. Buyers are pretty much left out in the cold to fend for themselves, fed any bs the seller's agent tells them. I'm sure that's got something to do with the current inflated house price situation. In the US it works really well for the most part; requires proper regulation to be done properly but it helps to have someone genuinely on your side who isn't working for the seller—even though the seller pays the cost. It's not 100% perfect system but a lot better than what we have here.
Buyers haven't been in a position this good for years; it's hard to know the situation for sure on this one, but from the looks of it I would have put a tight timeframe in place for offer acceptance and told them to take it or leave it.
*** Biased Reporting***
3 out of 8 and still not sure where market is going....
Seems that successful residential auction sales have virtually dried up.
I don't get it, whoever made that offer $1.175 million and accept that auction condition, IMO is an ID10T.
I'd rather reject the counteroffer, go to the auction and prepare to bid up to that amount.. who knows at this climate he/she might even get it a lower price.
I would take a wild stab in the dark and say the price trends will be going with "negative growth".
Where is Mike Kirk?
TM2 got him!
Ha, all the real estate vampires getting some hitman to keep smoke screen going
Chairman, doing a couple of things on rentals that needed doing, and weren’t allowed to by our esteemed leader!
Eight lots ~ there isnt enough here for a story.
Wait till July/August for direction of the house market and by October/Novemeber verdict will be out.
Wait and Watch.
PS : Do not rush to buy now - catch a falling knife. Overcome FOMO and get more for your deposit $$$$$ or may end up losing equity/deposit.
How to be a FHB forever:
Like Richard1965 says "wait and watch"… for years, forever, don't make a move "you could catch a falling knife" imagine the picture of all the blood on your hands, truely dreadful. Then 20-30 years later, you can say that you weren't born at the right time or whatever excuse is trendy then
Well to be fair he’s currently correct, have you seen what’s happening economically here and around the world?
Yvil has driven straight off a cliff and because he hasn't hit the ground yet he's concluded he's a bird
Agreed. If you have waiyed like the stupid prices have made a lot of fhb have as they saved, what's another six or so months untill the interest only period is up and the real picture is happening?
Agree not to be a FHB forever but now when price fall is inevitable why not take advantage of the opportunity to get more for the deposit.
Those who feels that price will not fall can go for it but should be prepaded to see their deposit / equity being diluted.
FHB whose jobs or business is not effected by this meltdown should definitely buy but...... Definitely not at HIGH Pre Virus asking.
Thanks for your replies, Albert, Avergeman and Richard.
Firstly you don't know if prices are going to go down, that's your opinion and even more dangerously, it's your conviction.
But where the market is going is not my real point, buying a house, especially your first house, is a huge and therefore very emotional step in life. For many people it's too easy to find reasons why it's not a good time to buy and believe me you can always find a reason not to do something (out of fear). My advice is, when you are comfortable enough to buy your first house without overstreching yourself financially, like Nike says "just do it". Stop reading Interest and talking to your friends (especially the ones who have been sitting on the fence for years) and do it. You are far, far better off spending time looking for the right house than you are guestimating where the market is heading. In 5, 10 , 20 years, all you will know is that you are living in your own house
Surprisingly you have doubts that price will fall and hoping that may also go up - lol
Prices will go down by how much can be argued but not if will go down or up and FHB should buy but why rush (As it is have missed the boom so why nit use the opportunity).
Understand that is a home for FHB but not to forget that it may also be the single biggest investment of their life and if can buy a million dollar for 850000 or even 950000 why not wait as definitely house prices are not going up in a hurry in near future when world is falling apart.
Agree with all who advising wait and watch for now.
Agree one should buy when comfortable but when the stage is set for a fall, no harm in waiting for few more months.
In current situation, never experienced by any living to expect that house price will be immune with world economy taking a hit is not been wise but again to each its own.
Richard, I agree that there's a higher probability that house prices will go down rather than up in the next 6 months, just make sure the "wait and see" attitude doesn't become entrenched in your psyche long-term. I hope you find the perfect house when the time is right for you
Yvil, I am lucky to have a house and do agree with you that wait and see should not be entrenchend in psyche for long term but anyone who has not bought and was in the process to buy now should be more aware of what has happened and is happening and wait for few months (Not ages) and as soon as they get a deal should go for it.
Give few months for vendors also to adjust to new reality and data to roll.
Continuing to regurgitate the same spiel you have been using for a few years really doesn't look good in the current climate. It's really not a fringe outlook that prices will fall over the next year - its pretty much been locked into every economic forecast across the board.
But what makes you look completely out of touch is the idea that first home buyers can "buy your first house without overstretching yourself financially". The reality is that most FHB are purchasing well outside of what would be considered "financially comfortable". The overwhelming majority can't even get a 20% deposit together (i've seen estimates from mortgage brokers of between 50-80% require help from family for the even a modest deposit).
Option to live further away from the city is the new norm after this pandemic. Let’s hope our city dwellers will move to regions in coming years. It’s not just Aussie, and is happening all around the world (US, India, Thailand and South East Asian countries). If this spreads to NZ means our biggest cities Auckland and Wellington will be affected too. Even people works in public service can work remotely, as no longer required to go every day maybe once in week or a month. The memo is issued to all google employees to work from home, and required to attend only meetings once in a month in physical office.
https://mobile.abc.net.au/news/2020-05-15/australians-seek-regional-aff…
https://www.google.co.nz/amp/s/www.latimes.com/business/technology/stor…
Funny how some people on here are fast to predict house price gains and happy to pat themselves on the back when it comes true but when things are looking strongly negative its total denial and a prediction of the trough is suddenly impossible. Lets face it predictably to this point has been pretty easy what happens from this point on is wait and see for the next 6 months at least. You would be mad to buy a house right now.
Agree. Have had conversations with a couple of my friends who are looking. I have said please try to wait until this time next year if you can and reassess. Who knows where we will be by that point, but I don't suspect the market will have gone up.
Know someone who has just put their house on the market. They purchased it for mid 800s 2 years ago. Agent has said they expect to get between 1.2 to 1.3 million for it. They did add some decks around it but few other improvements as it was almost a brand new house. Trademes property valuer values it around 900k-1 million with 4 out of 5 start accuracy . Will be interesting to see what it sells for. Still seem to be a quite a few people out there looking ATM. But many people still have to sell to order to buy. If banks expect prices to drop upto 15%, taking prices back to levels about 2 years ago, I expect many people are waiting to see what happens, and see how secure they are financially.
Anyone know of anyone who has sold any newly listed house since level 3 and 2? Not talking about houses where the deal hadn't yet gone though prior to level 1. But a totally new sale? I see some sellers are getting desperate based on their adverts and headings. I am trying to get a sense of the market, and whether people are seriously considering buying at the moment during this uncertainty, and potetnail price drops predicated by the banks.
Aussie Rules....we is differunt. Drop kick...for sum.
https://www.abc.net.au/news/2020-05-13/coronavirus-commonwealth-bank-ho…
https://www.macrobusiness.com.au/2020/05/flying-circus-house-prices-to-…
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