71% sales rate at Barfoot & Thompson's latest auctions

Property

Barfoot & Thompson's latest auction results suggest the Auckland market is very buoyant heading into spring

31st Aug 20, 2:26pm by Greg Ninness

There was a sharp jump in sales at Barfoot & Thompson's residential property auctions in Auckland's final week of Level 3 lockdown.

The agency marketed 111 properties for sale by auction in the week of 24-30 August, which was unchanged from the previous week, and achieved sales on 79 of them, giving an overall sales rate of 71% (see table below).

That compares to a sales rate of 58% the previous week.

Last week's high sales rate did not seem to be confined to a single part of the city, with properties in all districts selling well.

All of Barfoot's auctions last week were conducted online according to Level 3 lockdown restrictions and it appears that the latest restrictions did reduce the number of auctions being conducted in Auckland.

However Barfoot's solid clearance rates suggest the Auckland market is continuing in a very buoyant mode and it's likely that auction numbers will pick up again now that the region has moved down to level 2 restrictions and spring has finally arrived.

Details of the individual properties offered and the results achieved are available on our Residential Auction Results page.

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45 Comments

by HeavyG | 31st Aug 20, 2:38pm 1598841480

This is a further sign of the imminent crash of the Auckland market as it shows:....

by realterms | 31st Aug 20, 2:55pm 1598842554

Comment stream to predict, variously, somewhere between a 30% fall and a 30% rise? Oh, and either deflation, or hyperinflation. Really narrows it down, doesn't it.

by Averageman | 31st Aug 20, 3:19pm 1598843986

Agreed. Could go either way, in a big way. Either a loaf of bread is about to triple in value, or the housing market/bank shareholders are bout to have a huge haircut. Have to say each time the RBNZ lowers, extends, tops up etc to a protect bank profits, it looks more and more like retired people's savings are going to be worthless soon. All retired people vote, so it's interesting to watch Winston let his core voting block get crushed.

by EarlyMillenial | 31st Aug 20, 9:27pm 1598866058

Ah, but RBNZ and Winston are painted into a corner here. Slash the rates and retired people's savings go backwards. Let the housing market crash, and retired people's net worth takes a massive hit. RBA did a recent study on how the loss of wealth effect hits the oldest people the hardest.

by Nzdan | 1st Sep 20, 5:41pm 1598938875

Maybe people should stop looking at everything as an "Investment". If older generations saw houses as houses and savings as savings then the decision is quite clear, reward savings. But instead they expect a return on their savings and capital gains on the house.

by stuart786786 | 31st Aug 20, 2:38pm 1598841485

Strong Market

by J.C. | 31st Aug 20, 2:48pm 1598842082

Team of 5 million. We can't be beaten.

by printer8 | 31st Aug 20, 3:55pm 1598846114

J.C.
Great to see you seem to be now finally acknowledging that auction data is showing that the market is holding up in this Covid era.
I recall you dismissing auction data as being a meaningless sample.
To answer your query of me "What did they teach you about statistics in the palace of wisdom from which you were educated?" - seemingly quite a lot. :)
Cheers

by Mrs The Point | 31st Aug 20, 4:59pm 1598849993

New batteries for your self back patter?

by J.C. | 31st Aug 20, 7:08pm 1598857697

"What did they teach you about statistics in the palace of wisdom from which you were educated?"

Warlocks have no need for statistical rigor. I am simply a mere mortal.

by printer8 | 31st Aug 20, 7:40pm 1598859642

Cheers CJ. :)

by richard1965 | 31st Aug 20, 2:55pm 1598842507

Very Strong.

Housing market in NZ - Will it ever slow leave fall.

by CJ099 | 31st Aug 20, 2:49pm 1598842189

It appears that some apartments are making very heavy losses or is this just a typo in the auction results? 1112/2 Beach Road, Auckland City Centre. Rating Value: $760,000 (July '17), Sold for: $73,000.

Or is it to do with the remedial works and the ground lease.

by Greg Ninness | 31st Aug 20, 3:01pm 1598842914

The property is leasehold, whereas rating valuations are done on an "as if freehold" basis. That's because their primary purpose is to apportion rates rather than provide a proxy for market value, so there needs to be consistency in the valuation approach across the market. For that reason you should not pay too much attention to rating valuations in regards to leasehold properties.

by J.C. | 31st Aug 20, 3:25pm 1598844356

by Poppyc | 31st Aug 20, 3:25pm 1598844310

Those apartments also underwent a significant leasehold rent increase in the last 12months or so. Believe it is >20k per year now

by Pragmatist | 31st Aug 20, 3:31pm 1598844676

So you get to pay rates and rent, and body corp.. What a winning combo

by Mrs The Point | 31st Aug 20, 5:03pm 1598850200

The triple crown of leasehold property value destruction.

by RickStrauss | 31st Aug 20, 8:24pm 1598862257

Pay for the pleasure of renting for more than you might otherwise in some cases, perhaps.

by Llama_360 | 1st Sep 20, 9:07am 1598908065

You would think it is a terrible idea but I have seen some apartments on leasehold land sell for prices that would give an investor an ROR of 15% just because those factors put most people off. This was even after the ground rent had just been put up and major remedial work had been completed.

by CJ099 | 31st Aug 20, 4:48pm 1598849335

Thanks Greg, You might want to mention that to Homes.co.nz they have it valued between $740k and $865k?? For 1112/2 Beach Road, Auckland Central. And of course there's no info on what it last sold for the 2 bed apartment. https://homes.co.nz/address/auckland/auckland-central/1112-2-beach-road…

by Averageman | 31st Aug 20, 3:24pm 1598844272

Yep. Leasehold anything is getting wrecked. Be it appartments, Cornwall park, or Greenpark Huts. Have to say the Iwi action on the last one will do damage nationally to the goodwill of Iwi leasehold land.

by Greg Ninness | 31st Aug 20, 3:50pm 1598845834

I don't think the approach taken by iwi to ground rent on that land is much different to ground rent reviews undertaken on non-iwi owned leasehold properties around the city. I think what has changed over the last few years is that the general public is starting (at last) to get a better understanding of how leasehold works and how it can affect property values. Unfortunately I think this has probably come as a great (and unpleasant) surprise to many of the people who bought into new leasehold developments several years ago, and often paid far too much for them.

by RickStrauss | 31st Aug 20, 8:24pm 1598862298

Agree, whenever I've browsed leasehold properties the Iwi leases have always appeared the least dangerously predatory.

by bw | 31st Aug 20, 3:39pm 1598845145

"(RV's) primary purpose is to apportion rates rather than provide a proxy for market value.... For that reason you should not pay too much attention to rating valuations in regards to ~~leasehold~~ properties."
There. Fixed that for you, Greg.
If any property sells over RV "Look how much more valuable it is; it sold for 96.73% over RV!"
But if the RV is above the sales price "Oh, no. There's a reason for that. Just ignore the RV"
A wonderful thing this Real Estate 'market'!

by Greg Ninness | 31st Aug 20, 3:47pm 1598845640

What part of that don't you understand bw? All rating valuations are done on a freehold basis, even those for leasehold properties. So of course RVs for leasehold properties will generally be well above their selling prices. Freehold properties (the vast majority) are a different matter.

by J.C. | 31st Aug 20, 5:31pm 1598851885

I think bw was simply pointing at how people base their perceptions of market value on a value constructed by institutions . Kind of ironic.

by Chairman Moa | 31st Aug 20, 3:44pm 1598845486

interesting read
https://www.stuff.co.nz/life-style/homed/renting/122596822/too-many-dif…

by CourtJester | 31st Aug 20, 5:56pm 1598853415

Hmm I thought most landlords already exited the market due to the insulation regulations...
Oh wait, they didn't. They were just whining like the spoiled babies they are. Same with the recent announcements, lots of whining from landlords but I don't see them exiting the market by the thousands.

by printer8 | 31st Aug 20, 7:01pm 1598857266

CJ
Knowing landlords they probably weren’t bothered whinging . . . surely, just passed the added costs on to tenants? :)

by RickStrauss | 31st Aug 20, 8:28pm 1598862516

In fact, looking at the stats between 2017 and 2019 it looked like rental properties went up in number by about 10k per year. So while there was plenty of hysteria among the Church of Ashley and its disciples, more investors bought in for a slice of their welfare subsidised rental action.

by Pragmatist | 31st Aug 20, 9:20pm 1598865632

So about the same number of increase in rental as it was between 1991 and 2001, in spite of 4x the annual migration.. And are there the same number of landlords? Or area few whales buying everything?

by b21 | 1st Sep 20, 8:25am 1598905517

Mainstream media keep posting ridiculous articles about evil tenants that make landlord's lives impossible while in my experience it is mostly the other way around.

Perhaps a new strategy to justify owners leaving the market to shift the focus on other more important issues causing their investments to be unprofitable?

by mikekirk29 | 31st Aug 20, 3:53pm 1598845999

As they say in Commons in uk:
“I refer the gentleman to comments I made a few moments ago” ie last time market said to be buoyant = last 9 weeks.

by Uncle Bulgaria | 31st Aug 20, 4:38pm 1598848703

AKL market is flat at best.

by Mountie | 31st Aug 20, 5:33pm 1598852023

Have a feeling the Mount market is too. Sotheby's newsletter in my letter box today says 'Days to sell' is now at 47 days for Mt Maunganui.

by mikekirk29 | 31st Aug 20, 5:53pm 1598853209

NZ listings down 2.5% last 7 days
Auckland ditto
May be because selling faster than listings coming on.
Key metric is new listings per day

by Uncle Bulgaria | 31st Aug 20, 8:30pm 1598862620

Really appreciate these hard fact snippets.

by Crazy Horse | 31st Aug 20, 8:19pm 1598861982

I have soooooooooo much confidence in the Auckland residential property market, I'm going "ALL IN" folks ! The banks and RE Agents et al will just love me !! Borrow against my home, as much as the bank with let me, use all my savings and Kiwisaver, as a minimal deposit for each property .....it's just how many properties I can get that is the key !!! so to increase my rental cash flow, as much as possible ! .....I'm on a winner here ....I can feel it in my bones ! ....prices are on the "up and up" and will continue to do so ....everyone wants to live here, interest rates at record lows, great building standards, cashed up expats heading back to AKL in their thousands and the cherry on the cake - ENDLESS CAPITAL GAINS ! .....there it is folks .....financial future SORTED !

by Yvil | 31st Aug 20, 9:45pm 1598867136

Good on you C H, I wish you best if luck

by Crazy Horse | 1st Sep 20, 12:39pm 1598920799

Thank you Yvil .....I have always admired your candor and attitude with all things property.

by EmperorXi | 31st Aug 20, 10:47pm 1598870869

Good one....... when we fall, let's take the damm banks with us or at least a lot of folks thought so until they realized the hard way, the house always wins in AU and NZ (The banks get bailed out, where as the mortgagees have bailiffs sent when they are still owed after selling the asset), bit unfair....... wish it was like the US where the bank shares the loss.

by Crazy Horse | 1st Sep 20, 12:35pm 1598920539

@ EmperorXi ........my comment was said in complete "sarcasm" :) ....however you hit on huge point ....if all this goes "belly up" why should we bail the banks out !! If they can't organize themselves to face what ever comes along with the NZ residential property market, why should the taxpayer have to bail the banks out, while the debt just continues to pile up !! I have experience in the US residential property market and yes, you are correct, both the bank take the financial loss and the owner has their credit rating destroyed ....and that credit rating is everything over there !

by b21 | 1st Sep 20, 8:27am 1598905671

Great one! There should be a different type of font for irony posts.

by company of heroes | 1st Sep 20, 9:31am 1598909515

Good one. Believe it or not, as crazy as it sounds , we are definitely walking toward that direction where everyone will think house is the way to get rich and finance secured. When this happens, it won't end pretty.