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Barfoot & Thompson's auction results suggest the Auckland market is remarkably firm for the middle of winter

Barfoot & Thompson's auction results suggest the Auckland market is remarkably firm for the middle of winter

Barfoot & Thompson's auction rooms ended the month of July on the same buoyant note that had prevailed since the beginning of the month.

The real estate agency marketed 107 residential properties for sale by auction and achieved sales on 65 of them, giving an overall sales rate of 61%.

That was down very slightly from the 115 auction properties handled the previous week, which had a sales rate of 63%.

Last week's highest sales rate of 79% was achieved at the Shortland Street auction on July 29, where most of the properties on offer were from central Auckland suburbs such as Parnell, Mt Roskill, Mt Eden, Grey Lynn Hillsborough and Mission Bay.

The sales rate at the on-site auctions was an equally healthy 75%, while the big Manukau auction had a 58% sales rate, and it was 67% at the North Shore auctions.

This suggests the Auckland market remains remarkably buoyant for the middle of winter.

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Barfoot & Thompson Residential Auction Results
27 July - 2 August 2020
Date Venue Sold Sold Post Sold Prior Not Sold Withdrawn Total % Sold
27 Jul-2 Aug On-site 4   2 2   8 75%
28 July Manukau 15     11   26 58%
28 July Shortland St 8     7   15 53%
29 July Whangarei       1   1 0
29 July Shortland St 11 1 3 4   19 79%
29 July Pukekohe 2 1   3   6 50%
30 July North Shore 7   5 5 1 18 67%
30 July Kerikeri       1   1 0
30 July Shortland St 3   1 2   6 67%
31 July Shortland St 1   1 5   7 29%
Total All venues 51 2 12 41 1 107 61%

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46 Comments

"remarkably firm" - Good words

" Remarkably firm" indeed ........ 25 years ago my father was dying of cancer , and his sister and brother-in -law Tony visited him in bed , and Tony commented to me that my father had a " remarkably firm " handshake , suggesting he was still strong .

He died the next day

"Remarkably firm" indeed........ 25 years ago my uncle was dying of cancer, and his sister and brother-in-law Bruce visited him in bed, and Bruce commented to me that my uncle had a "remarkably firm" handshake, suggesting he was still strong.

He went on to double in strength every 7 - 10 years.

Imagine how amazingly well the economy would have done if we hadn’t been struck down with a global pandemic and the immediate shut down of international tourism and 20% of our foreign exchange earnings? Remarkable, simply incredible.

Hmm... the article refers to the R E market which is not the same as the economy. Also if we didn't close lock down and shut the borders, interest rates would not be at 2.5% so housing would probably not be better off.

Um... so what you are saying is the economy is shot, but house prices are booming!? Mutually exclusive aye?

So you are saying when economy is shite, housing market would be in booming.. yah that makes sense!

GHH & CM, no that is not what I'm saying

Just unbelievable, I didn't expect this, in the middle of winter and two months out of an election

@Yvil , I dont believe it , unless these are stressed sellers exiting the market or some other thing at play .

The fact that it is cheaper to have a mortgage than it is to rent may have something to do with it

Do you read the stats I give on market sales trend above 1.4 million? The increase in sales there is galloping. Whilst for those you think are getting mortgages as easily as pre CV19, the numbers are shrinking. Look at BT sales data today: which areas are doing best and worst? nsc best and Manawatu worst. 3 guesses why

The recent RBNZ data confirms that credit is harder to gain but it’s interesting that anecdotal evidence (property and finance Facebook pages) of people with pre-approval prior to covid losing that approval when reapplying and large wait times for pre-approval are a common theme of the threads.

Humm.. Remarkably economically gravity deifying. You wouldn't think there was a global pandemic on, with a lot of people having to receive benefits and mortgage holidays and with a huge section of our tourism industry gone would you.

"The sales rate at the on-site auctions was an equally healthy 75%, while the big Manukau auction had a 58% sales rate, and it was 67% at the North Shore auctions." Oh I wonder who prefers to live there.....?

The foreign buyer ban appears to be much like the ban on UK fox hunting. Its not supposed to happen but there are plenty of toffs on horses with packs of hounds trampling all over the countryside. What could they be doing?

FB
On what evidence do you base that or is it just simply conjecture.
Please support your comment with evidence otherwise it is simply conspiracy theory.

I, for one, would be happy if the Foreign Buyer was banned

There is absolutely no point in banning foreign buyers , if they even are still a thing .

Its foreign buyers who are providing the market with rental stock

Unless they are building from new, I can't see how they are providing the market with anything that wouldn't be there anyway.

Boatman, you missed my post

CJ099
Well if you want me to answer to support your ongoing narrative- most likely a number of recent Chinese and Hong Kong immigrants. Like me and you, but most likely New Zealand citizens or residents.
Also possibly a number of other Kiwis of a variety of ethnic groups who are taking the opportunity of historically low interest rates to trade up to a better home and more desirable suburb.
That answer your open question.

The fall in interest rates is not enough to buy multi million dollar homes is it for most wage earners.

CJ099
Currently great opportunity with historically low interest rates to trade up provided one has job and income security. RBNZ reducing OCR was always going to indirectly stimulate housing.
Or those NZders returning home - certainly a lot of young ones but also professionals in their thirties - after doing their OE and on higher wages saving for their first home (not surprising the RBNZ figures show number of FHB is up).
Also historically very high numbers of recent immigrants - either Asian or Caucasian bringing in funds - over past number of years now settled in and buying a home.
However none of this fits with your conspiracy theory.

P8 You're clearly getting flustered. And no not all those returning can afford a home in Auckland, especially if they haven't secured a employment which is unlikely if they're returning due to the pandemic. I have friends returning from the US and they're regretting having sold up there since they can't afford a place here. It's well known that foreign buyers can use other avenues to buy property here, which REA's like Barfoot have been keen to benefit from.
Stuff article: Real estate agents target Chinese New Year buyer boom. "Barfoot & Thompson director Peter Thompson said his firm had seen Chinese buyer numbers fall since the restrictions, although they still made up 25 per cent of its sales." https://www.stuff.co.nz/life-style/homed/real-estate/118997122/real-esta...

Oh and remember that 25 per cent of sales by Chinese buyers reported by Barfoot in January this year was well before the recent HK events, so is likely to have increased since then by motivated buyers keen to move their capital to a covid-19 virus free safe haven.

CJ099
Not flustered at all - just in disbelief.
No problems with “Chinese” buyers buying at time of Chinese New Year but these are most likely to be “Chinese” NZ residents or citizens. You seem without evidence to be jumping to the conclusions that they are not.
You are also jumping to the conclusion that on reported auction data alone that it is Chinese FB driving the market - even if you were present at the auction, you would not know the residential status of an ethnic Asian buyer.
I see these Chinese immigrant as much as being Kiwis as those Caucasians from Australia, UK, USA and South Africa.
The current positive trend in the Auckland property market prices is exactly consistent with that in most other regions - however, you simply look at the Auckland market and jump to the conclusion that it is FB driven. No, like most regional markets, rather than FB activity which are heavily monitored, it would seem the same drivers are behind this.
You have no rationale or basis for your conclusions and I find them a little troubling.

P8 What is troubling is you're constant ignoring what going on in front of your nose. Bit like how you're always going on about how Trust funds are so secure are yet they used a huge amount for buying property in Auckland and else where. Trust companies are still being used for overseas transactions and money laundering.

And it's hardly a conspiracy when they're being brought up in court is it, and from this recent article about how Trusts can be miss handled that shows just how wrong you are P8.

Article from Otago Daily Times: Gang lawyer's 'perplexing' fall from grace. All centers around dodgy money being held in Trust accounts. Apparently the lawyer advised them to "Keep any cash deposits under $10,000 to avoid raising red flags with the banks, which are obliged to report any transactions above the threshold." https://www.odt.co.nz/news/national/gang-lawyers-perplexing-fall-grace

CJ099
No problems.
Both the increase in prosecutions related to money laundering - especially by gangs - and related lawyers clearly shows that the legislation is working.

P8 that's sad even for you. So you didn't read the part in the article of how the lawyer went to prison for assisting money laundering, since he setup the Trusts and for failing for notifying the authorities. He was sentenced for 2 years 9 months on the 13 money-laundering convictions. No surprises why our Government is making Trusts more transparent, since facilitators can't be trusted to do their part in preventing money laundering.

Was that gig on Chinese buyers in their report in Feb or Jan?

Hi Mike, Are you referring to this Barfoot article: Real estate agents target Chinese New Year buyer boom. If so it was reported in late January this year. https://www.stuff.co.nz/life-style/homed/real-estate/118997122/real-esta...

Quote from article: "Real estate companies are trying to encourage Chinese buyers back into the market as the Year of the Rat begins, using targeted social media campaigns on Chinese language app WeChat, candle lighting events and New Year trade shows." They also mention that they account for 25% of the sales market, which is quite high even then and has probably increased due to recent events.

Here's another interesting twist, look what other property markets have suddenly spiked very recently: LONDON! Why Boris has been very generous with UK visas recently. Forbes article: London’s Prime Property Market Sees Surge In Demand From Hong Kong and Mainland Chinese Buyers.
"Purchasers from Hong Kong and mainland China now account for 15% of its international buyer home sales above $1.2 million and 20% of deals above $12 million across prime central London". https://www.forbes.com/sites/clairecarponen/2020/07/03/londons-prime-pro...

Other factors enticing foreign buyers to London are 1.historically weaker currency 2. prices declining down or stagnant for a wee while 3. predictions of worst recession in 3 centuries = smell of blood in the water

Yes it will be very interesting to see what happens to the Pound once Brexit fully kicks in (Isn't it meant to be around December or have they shifted the date again)?

Thanks for link.
Problem I have with the 25%of their buyers that they admit are Chinese is that Auckland pop of Waitemata and parts of Upper Harbour is at least 28% Chinese, or Asian as census likes to put it. So, if 25% of BT buyers are Chinese , that is not disproportionate.
In fact, due to AML and OBB my perspective is that sales are increasing in those areas of Auckland where most Chinese live, precisely because they are leaving ton and perhaps NZ too. Look at the INZ figures that show Chinese immigration in last 18 months has dropped forma round 10k pa to 4k. Plus CCP is pressuring its diaspora to conform to its messaging recently, and according to the FBO, threatening diaspora in USA by referring to their relatives back home.
BT figures for central Auckland (in contrast to central suburbs increase) was 71% down in July, compared to 2019. Which suggests (as central Auckland is dominated by apartments) that apartments are not selling well at all, mostly because, probably, the shoe box ones are not getting sold to students.

P8 I really don't buy the returning cashed up kiwi line. Do you have data?
What I think is far more likely is more young kiwis jumping in, with the help of the bank of mum and dad for deposits.

First it was FOMO, then FONGO and now possibly FOFO

FOFO? Fear of farting outloud? otherwise you'll need to explain it.

I'm noticing the Caucasian community highly active in the housing market right now. Buying up anything with a bit of grass in a half decent suburb.

Suggestive of a baby boom 2.0 - can't go overseas so pair up, couple of hundred or so K from mum and dad...now bid up a 3 bedroom brick and tile in Sandringham to 1.6m! Nest at all costs!

We are listing my parents home in Hillsborough as they are downsizing to a smaller house. Had an appraisal with three agents and showed them similar house sales results from Oct to now. 2 agents point blank told me to expect that prices will be -5% to -10% lower in Oct when we are hoping to list and actually recommended PBN instead of auction. 3 bedroom 1960s house, CV $1.05m. We have two other agents coming in on Friday so hoping for something more positive

If you want to double your CV (RV) then you need to interest some developers who can attract some external funding. Here's a recent example for you; 6 Reeves Road, Pakuranga, Auckland. RV $1,115,000 (July '17), Sold for: $2,261,000 Thursday, 30th July '20. (Doubled its property value in 3 years)!!!!
3 bed 1 bath fairly basic and tired looking house: Listing link: https://www.barfoot.co.nz/property/residential/manukau-city/pakuranga/ho...

Not sure that's comparing apples with apples unless Tiller's parent's house is THAB zoned, and large (900 sq m).
The THAB zoning will be a big part of the crazy sales price, along with it's size.
But man, that's just stupid pricing for Pakuranga!
I hope the buyer has done their homework - it's a quite narrow site, so will be hard to achieve more than 3 storeys in height.
That neighbouring redevelopment is curious. I don't know how they got consent as it's right up against the boundary of its eastern neighbor and would cast a whole lot of shading. Maybe the developer owns that neighbouring site too.
Pretty ordinary looking!

By the looks of it from the photos most of that block of houses is tagged for redevelopment and yes that is a ridiculous for that part of town. Give it ten to fifteen years and I bet it's turned in to an urban slum, with extreme high density housing that will have then been subdivided internally by the landlords.

It's only speculation, I don't have data, but one wonders if there's a bit of hot Chinese money flying around the Auckland market right now. Not just offshore money, but onshore money - of which there is plenty within the NZ Chinese community.
Maybe a view that you can't go wrong with bricks and mortar, and a view that NZ is a safe haven in these times. So it's seen as a relatively safe bet.
As I say, only speculation. But sometimes speculation has some basis in truth.

Sorry Fritz but looking at prices and sales in Auckland where Chinese are concentrated, and then also looking at numbers of Chinese owing into NZ in last 18 m (down from 10k a year to about 4k a year) it seems to me that lots of Chinese have responded to the AML and OBB by getting out of NZ. On top of that the Chinese authorities are clamping down on their diaspora abroad and may be pressing them to return?

Sorry but its not a normal winter is it??
It is a winter following an autumn season that was cancelled or frozen.
It is perverse to ignore that as a driver of demand.
The June and July increase in sales has made up about 40% of the deficit due to lockdown.
That is not a recovery, it is a partial filling of the deficit.
Inventory and higher end sales dominating has driven median and average price up in selected areas of Auckland. On top of that government sugar highs of up from wage subsidies and QE and interest rate cuts and foreign holiday money being spent here, floated economy last 2 months. In next 3 weeks this is all going to start reversing. So, market is not "buoyant" it is artificially suspended in mid air like the coyote who has run out of road and gone off the cliff. Now starts the drop

Days to the General Election: 19
See Party Policies here. Party Lists here.