Auction sales rate hits 75% compared to 50% at the same time last year

Property

Compared to last year more properties are being auctioned, the sales rate is higher and prices are firmer

5th Sep 20, 9:02am by Greg Ninness

Sales were achieved on exactly three quarters of the properties offered at the auctions monitored by interest.co.nz in the week from 24-30 August.

That compares to a sales rate of 68% the previous week (17-23 August) and 50% in the comparable week of last year (26 August - 1 September 2019).

The only downside in the auction numbers in the last week of August was a slight drop in the total number of properties auctioned, which dipped to 224 from 234 the previous week and 275 the week before that.

However that was still well ahead of the comparable week of last year when just 134 properties were offered at the auctions monitored by interest.co.nz.

The number of properties auctioned in the last week of August may have been crimped by the Level 3 lockdown in Auckland, so it will be interesting to see if auction numbers start climbing again in the next few weeks.with the arrival of spring and the end of the Level 3 restrictions in Auckland.

Prices have also been firming.

Where interest.co.nz was able to match selling prices with the corresponding rating valuations, 87% of sales at the auctions monitored in the last week of August were higher than their corresponding rating valuations, up just slightly from 84% the previous week, but well up from 50% in the matching week of last year.

Details of the individual properties offered at the auctions monitored by interest.co.nz and the results achieved, are available on our Residential Auction Results page.

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133 Comments

by Yvil | 5th Sep 20, 9:26am 1599254795

So more than double the sales compared to the same week last year, 168 in 2020 vs 67 in 2019 =250%. Unbelievable

by mikekirk29 | 5th Sep 20, 12:55pm 1599267302

Not that you are interested but REINZ stats show Feb-July Auckland sales in 2019 were 11,081
In 2030 it was 11,111. Marvellous growth

by Yvil | 5th Sep 20, 2:03pm 1599271398

That's some amazing foresight you have there MK ; )

by b21 | 5th Sep 20, 9:41pm 1599298876

Thanks for sharing the actual data, BTW do not even bother with this guy.

by HeavyG | 5th Sep 20, 10:04pm 1599300261

Crowing about stable sales and prices during a global pandemic must be a bitter pill to swallow for you DGMs.

by mikekirk29 | 7th Sep 20, 9:46am 1599428779

Beware averages: Auckland prices are not stable and neither are its sales.
Sales by area of Auckland vary hugely, especially in period April-July. compared to 2019, and even more so, by price bracket.
See below.
Key metric is : lockdown hole filled (LHF). that is, how much of sales loss in lockdown (cf 2019) has been filled in by gain in June and July?
Answer varies hugely according to type of housing and price, and area.
Papakura the % of lockdown hole filled is NIL. In Albany it is 86%

by printer8 | 6th Sep 20, 10:25am 1599344715

Mike
There is actually some significance in your data (albeit this occasion).
You indicate that the number of REINZ sales is consistent with last year yet number of properties taken to auction and number of sales are both notably higher.
A point that I have made on a number of occasions; the number of properties taken to auction is an indicator or reflection of the market. When the market is strongly either a buyers (falling) or sellers (rising) market and there is a high degree of price competition or uncertainty then auction is a means of establishing the price. Desperation selling vs competitive buying - as well as unique properties- is when price is uncertain and auctions are preferable.
The market is currently clearly a sellers/rising market with rising prices (despite what CJ says) it is not surprising agents are advising this form of marketing despite it having higher fees/costs for the seller - but being offset by competitive buying and the potential higher selling price. Fixed price and negotiating range for example are less preferable in ensuring the best result.
Interpreting this auction data; increased number of properties taken to auction, high sales rates, and - as a price benchmark - the high percentage of properties selling above RV all in combination are indicative of a strong market.
In the coming months, the traditional spring season upswing is likely to offset any immediate negatively of the end of the wage subsidy.

by mikekirk29 | 6th Sep 20, 9:35pm 1599384942

A reasoned analysis.
But I feel economic laws means summer will not be the continuing boom some seem to think it will be
Will share stats on AUckland City apartment sales tomo. They do not support argument re booming sales which only seems to apply to houses over $1.4 million in some parts of the city

by mikekirk29 | 7th Sep 20, 9:58am 1599429483

Hi printer,

I have examined the districts of Auckland closely.
I do this to guide buyers especially.
It is highly revealing.
I have invented a new metric which I am calling "LOCKDOWN HOLE FILLED"
By which I mean what % of lost sale sin April and May lockdown, were made up for by gains in June and July.
Again average is HIGHLY misleading.
Answer in Auckland is 42.5% to end of July.
I show here the % drop and subsequent gain, followed by the % LHF for each area. The variation is huge.
I have the absolute sale figures also. But not included here for brevity sake.

Auckland: loss 53% in April and May. Gain in June and July 22%. LHF 42.5%
Albany Ward: loss 45%. Gain 34%. LHF: 86%
Rodney District: loss 44%. Gain 31%. LHF: 78%
Manukau City: loss 55%. Gain 6%. LHF: 13%
Auckland City: loss 53%. Gain: 29%. LHF: 53%
Auckland City apartments: loss 46%. Gain: 13%. LHF: 35%
NSC: loss 56%. gain 22%. LHF 39%
Papakura: loss 63%. Gain NIL. LHF: 0%

This gives a stark picture of impact of economic hit from CV19, on poorer areas.
Albany and Rodney doing so well for a number of reasons: not least that they are not inner city. Plus they have a lot of stock priced $900-1.1m and that is bracket where sales have expanded most in last 5 months, as lower brackets lost out due to median rise of 11.5% in last 12 months.

Auckland City apartments sale sin $300-400 bracket cf 2019 in May, June, July fell 41%. Bracket $700-1m rose 33%

by Yvil | 5th Sep 20, 9:30am 1599255006

Considering 87% of houses sold above CV vs 50% over the same CV in 2019, it's also very clear prices have gone up, significantly

by blobbles | 5th Sep 20, 9:41am 1599255662

Absolutely they have and with idiots running monetary and fiscal policy, they will continue to go up.

by J.C. | 5th Sep 20, 10:32am 1599258774

Considering 87% of houses sold above CV vs 50% over the same CV in 2019, it's also very clear prices have gone up, significantly

No. It's not clear at all that prices are going up and the statistical rationale you give doesn't support the claim in any way. It might have some weight in the banter around the water cooler, but that's about it.

by MadMax | 5th Sep 20, 10:45am 1599259554

Correction : IYHO as a MikeKirk groupie, prices have not firmed

by mikekirk29 | 5th Sep 20, 1:06pm 1599267981

Nice to see I am causing such irritation and identified as leading the unimpressed

by printer8 | 5th Sep 20, 10:50am 1599259837

JC
Your comments are becoming to sound simply like denial.
For the past three months or so auctions data is consistently showing stronger prices compared to that last year. How big a sample do you need?
The auction results can in no way show that prices are either flat or falling. For you to deduce otherwise needs a very strong bias in interpretation of the data to say so.

by J.C. | 5th Sep 20, 11:12am 1599261142

Your comments are becoming to sound simply like denial.

Chances are that the study of statistics is not a passion of yours. Confirmation or denial on my part is irrelevant as I'm not making claims that the data proves anything. If you're going to lay down a stastistical based case for the movement of house prices, your data shoud support the premise that you're not wrong. Rattling off a few numbers and saying 'prices are higher than the same time last year' has as much gravatis as listening to the stragglers at the bar of your local bowling club talk about the future of communism in China.

by printer8 | 5th Sep 20, 11:16am 1599261397

J.C.
The onus on you. Please provide data to back your assertion of falling - or flat - market other than a glib reference to statistical data.
P.S. While not a major, I do have statistics papers in my degree.

by J.C. | 5th Sep 20, 12:00pm 1599264029

Meh. I didn't 'assert' anything nor did I make any claims about 'house prices clearly going up.' Nothing for me to prove.

Furthermore, hard to imagine you've studied statistics if the concept of the null hypotheiss is alien to you. It doesn't really get more fundamental.

by Yvil | 5th Sep 20, 11:28am 1599262116

J. C. "No. It's not clear at all that prices are going up"

I don't understand why this is not clear to you, in 2020 37% more house have sold above the same CV as in 2019 (87% - 50%). For example if the CV is 500k (and it hasn't changed since last year) it means that 37 houses out of 100 that were selling under 500k last year, are now selling over 500k. That IS an increase in price. Your desperation and denial of the fact that the RE market has been very strong over the last couple of month is becoming tiresome

by printer8 | 5th Sep 20, 11:42am 1599262943

Yvil
It seems that J.C. is the reincarnation of the Black Knight. :)
https://www.youtube.com/watch?v=ZmInkxbvlCs

by Yvil | 5th Sep 20, 2:12pm 1599271947

Hahaha, thanks for the video, made my day, sooo good in the context of this thread,

by printer8 | 5th Sep 20, 5:04pm 1599282283

Yvil
You really do have to admire the Black Knight's commitment and determination despite defending the indefensible and not acknowledging the reality. :)

by J.C. | 5th Sep 20, 5:10pm 1599282625

You really do have to admire the Black Knight's commitment and determination despite defending the indefensible and not acknowledging the reality. :)

Not so. I defend the right for anyone to engage in water cooler banter.

by printer8 | 6th Sep 20, 10:35am 1599345347

JC
There was a hint of admiration in it - take it and savour it.:)

by J.C. | 5th Sep 20, 12:04pm 1599264282

I don't understand why this is not clear to you, in 2020 37% more house have sold above the same CV as in 2019 (87% - 50%). .......................

So what? That's really no different than intercepting 100-odd pokies players over two different weekends where the win rate was 15% vs 5%, then claiming "more pokies players are successful this week over last week and more money can be made from the machines."

It's sloppy, lazy thinking and has nothing to do with statistics.

by tothepoint - d… | 5th Sep 20, 12:31pm 1599265908

Sorry J.C. - but you’re not too convincing.....

Like others here, I’m not persuaded that black is white and night is day.

Better luck next time.

TTP

by Te Kooti | 5th Sep 20, 12:28pm 1599265706

JC you are losing credibility. We have a baseline which is the RV, we have the same month to remove seasonal variance and we have an increase in sales. If 74% more houses were sold above CV in 2020 than in 2019, that is statistically significant and almost certainly indicates higher prices which, by the way, is supported by anecdotal evidence of individual sales results.

Dark times for DGM's.

by J.C. | 5th Sep 20, 1:19pm 1599268780

Nonsense. You can calculate the statistical significance of means and medians over different sample sets if you have large enough sample sizes. However, you'r also basing the assumption that your samples are representative of the wider market.

Statistically, you're just pissing in the wind.

by mikekirk29 | 5th Sep 20, 1:10pm 1599268238

Repeat after me: price rise is not a market
A market consists of buyers , sellers and prices
Price is increased by banks lending more and lower rates. Prices are rising more recently . They fell 2017-2020, by about 3% acc to REINZ median. Nothing really worth being excited about.

by J.C. | 5th Sep 20, 1:28pm 1599269294

Repeat after me: price rise is not a market

No, but a quantative index or prices on an exchange can measure the direction of price changes withinin a market.

Comparing price changes between two different sample sets is all very well, but it doesn't represent a measure of a wider market. There is actually a strong correlation between clearance rates in the Sydney auction market and house price changes (positive correlation). However, to understand this correlation, I think the RBA uses a 3-week rolling average to ensure that the samples are robust before testing the relationship.

I have no issue with people building data-based arguments. It should be encouraged. But strapping narratives to flimsy data sets and with no statistical method should be called for what it is: Nonsense.

by mikekirk29 | 5th Sep 20, 2:35pm 1599273302

Sorry JC but my comment re "repeat after me" was not (as so often) placed where I wanted it, and was not aimed at you.

by Te Kooti | 5th Sep 20, 2:37pm 1599273429

If you want me to run T tests and Central Limit Theorems, you've lost the plot. and clutching at straws.

by J.C. | 5th Sep 20, 4:09pm 1599278976

If you want me to run T tests and Central Limit Theorems, you've lost the plot. and clutching at straws.

You cannot 'run a central limit theorem.' But if your samples are not representative of the housing stock at an aggregate level, then this further supports the that you cannot claim that 'prices are increasing' at a wider level. Be honest with yourself. Making inferences on the auction data based on flimsy application of statistics is little more than water cooler posturing.

by Te Kooti | 5th Sep 20, 8:27pm 1599294458

You will know that the CLT allows us to draw conclusions from a non-normally distributed sample to the wider population, 100 samples was the minimum from memory. Your posts are captious and any reasonable person would consider that data and conclude that, on the balance of probability, prices had moved higher.

by J.C. | 5th Sep 20, 9:19pm 1599297594

You will know that the CLT allows us to draw conclusions from a non-normally distributed sample to the wider population, 100 samples was the minimum from memory

Depends on what you want. For ex, assuming a population of 20,000 and you want a margin of error of 5% with a confidence level of 95%, then a minimum sample size would be 377.

Now, assume your housing stock consists of roughly 100,000 houses (population size): 1/3 white, 1/3 blue, and 1/3 red (dumbing this down for simplicity). Your sample of auction results returns a 75% clearance rate on 250 houses. The first thing you want to ask yourself is about whether or not the median or average sales price of 186 sales is representative. Were they all sales of blue houses? If yes, So not representative. What about 50% white / 50% blue? Well yes, I can now draw inferences on 66% of the population, but my sample size is 100. So what margin of error do I have?

by Te Kooti | 7th Sep 20, 10:23am 1599431012

JC, you obviously have more than a cursory understanding of statistics. For the purposes of general commentary I would argue that land (Often >50% of the RV in central locations) is actually quite homogeneous and can be reliably valued per sq/m. I am comfortable drawing general conclusions based on available information.

by b21 | 5th Sep 20, 9:45pm 1599299128

They are actually going down, -5% in Acuckland since peak according CoreLogic's data.

by Fritz | 5th Sep 20, 10:51am 1599259906

That's not what the HPI is saying.

by printer8 | 5th Sep 20, 11:13am 1599261188

Fritz
REINZ HPI is saying so.

by Fritz | 5th Sep 20, 11:45am 1599263112

The HPI is showing a rise of 1.6% over the past 3 months, that does not support your / Yvil's argument of a very strong and rising market. It has risen a meagre 3.9% over 5 years (for Auckland).
Of course the September / October figures may show a significant lift, but until we get those we don't know.

by printer8 | 5th Sep 20, 11:58am 1599263901

Fritz
REINZ Report 14 August
1 month 1.6%
3 Months 1.6%
1 Year 9.2%
A REINZ HPI rise of 1.6% in a month or 9.2% annual is by most people's view reasonably strong. However, clearly not "reasonably strong" by your measure.
(I note you cherry picked the 1.6% three month figure as to best support your view.)
https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2020/July/R… Page 6

by Fritz | 5th Sep 20, 12:08pm 1599264506

F$%# off. I did NOT cherry pick. We are mainly talking about the market now / in recent times, that's why I mentioned that...
You really are showing your vested interests.

by Yvil | 5th Sep 20, 2:15pm 1599272130

Fritz you are cherry picking indeed because this article is about B&T sales and my comment is about these sales. You then go find another measure to support your point = cherry picking.

by Fritz | 5th Sep 20, 2:36pm 1599273388

You said prices have gone up significantly. So I think it's very relevant to quote REINZ's HPI which suggests that isn't true. At least for now.

by JimmyJames | 5th Sep 20, 11:49am 1599263386

Let's hope prices go up significantly Yvil. What a wonderful realisation that it's actually economic destruction that causes true wealth creation.

by Yvil | 5th Sep 20, 2:17pm 1599272255

Why do you hope that prices will keep rising? I have certainly not made any such comment, I have simply acknowledged that the RE market has recently been very strong

by Fritz | 5th Sep 20, 2:52pm 1599274331

You really don't have a sarcasm radar do you

by RealAgent | 5th Sep 20, 10:07am 1599257247

buy buy buy, we're running out of space to build, demand is up, and prices are going to skyrocket further, you will miss out, buy buy buy, wahoo we are all going to be rich!

by JimboJones | 5th Sep 20, 10:08am 1599257324

Well if our housing market is a bubble it’s a bloody strong one (although the RBNZ does its best to keep it inflated). I’m picking it won’t pop until the baby boomers start to sell up - say in 10 years time. That won’t be pretty; without boomer demand I can’t see who will be sustaining these prices.
I’m the mean time, surely at some point this has to result in consumer inflation?

by Bugger | 5th Sep 20, 7:58pm 1599292738

Strong immigration may help.

by b21 | 5th Sep 20, 9:55pm 1599299722

Which does not exist.

by nigelh | 7th Sep 20, 9:09am 1599426574

for now. Wait till the covids becomes less of a handbrake and the next govt opens the taps. Doesn't matter which one. One may 50,00 another 40,000

by RickStrauss | 7th Sep 20, 9:34am 1599428042

Indeed, National have already communicated their economic plan in previous weeks and months: selling land off to foreign ownership and importing as many people as possible.

Nothing much to offer the younger generations.

The current government has not fixed the issues, but National only offers a fire to their frying pan.

No wonder neither major party has been willing to enact the electoral commissions's recommendations of a 3% threshold and STV.

by MadMax | 5th Sep 20, 10:13am 1599257633

*Rubs hands*
Here we go...
Top of the morn' to you Mike :)
(& your groupies, I guess)

by CourtJester | 5th Sep 20, 10:58am 1599260304

Seriously, what's your problem with Mike's detailed stats?

by MadMax | 5th Sep 20, 11:26am 1599261969

Seriously, and maybe I'm on the wrong side of the "divide", but as an investor, its all noise and no sense.
If you have a bearish or negative point of view, you can drill into any data and make that suit your narrative.
I've def been born slightly half glass fullish(can't help that), so its I feel it's important to consider bearish points of view
BUT, it's very easy to pitch fear, negativity, paranoia and suspicion(human evolution has evolved on it). Broken clocks are right twice a day.
This is a site to help people make wise financial decisions and I don't feel MK is doing that IMHO.
Def think he's a great guy and all though, and he means very well. Very hard to top the Chaston's, Tibshraeny's, and Ninness's though
This all just IMPO

by CourtJester | 5th Sep 20, 11:33am 1599262427

I fail to see how getting access to more data would prevent people from making wise financial decisions. Focus on the data, but do the analysis yourself.
I also have to add that what incites fear, negativity and paranoia in most people my age (low 30s) is the constant mantra of "buy now or get left behind!". By nature I always question dogmas, and when people have extraordinary claims such as "house prices double every 7-10 years", I like to see more data to be able to decide for myself what to believe. Because no one can predict the future, it's all your own choice what you believe in. Data aids your decision, and if someone finds more data confusing, then they can just ignore such posts. Many people here are interested in the finer breakdown of sales stats.

by J.C. | 5th Sep 20, 12:09pm 1599264580

I fail to see how getting access to more data would prevent people from making wise financial decisions. Focus on the data, but do the analysis yourself.

Fundamentally, you're correct. In reality, you're wrong. You can have warehouses of data, but if you have no idea of how to use it or what to do with it, it's worthless. Furthermore, most people are lazy thinkers and would prefer to read Granny Herald and listen to their peers to support their decision making.

by mikekirk29 | 5th Sep 20, 1:17pm 1599268642

Thanks CJ

by al123 | 5th Sep 20, 12:52pm 1599267125

Every time someone describes the prospect of house prices dropping- or even not rising - as 'negative' that reads like a big old f*** you to those who don't yet own a house. But great to know that you think its wonderful that most younger people will continue to pay massive amounts of rent, and continue to have the prospect of having a stable home and a decent retirement get pushed further and further out of reach. What great news right? So long as your investments do well.

by Yvil | 5th Sep 20, 2:36pm 1599273406

Al, I can fully understand how rising house prices upsets you, since you don't own one but I'm also sure MadMax doesn't take any pleasure from FHB having a harder time. Likewise, if house prices were dropping, you would be happy but it wouldn't mean you take pleasure in home owners losing equity.

by JimmyJames | 5th Sep 20, 3:44pm 1599277441

As an investor MadMax has ensured that FHB are having a harder time. This is his offering to the world.

by MadMax | 5th Sep 20, 7:46pm 1599291975

I was a FHB at one stage.

Investors improve life for everyone, that's why you're typing on a keyboard instead of throwing rocks at mammoths(so to speak)

As a teenager and through my twenties, I worked very hard as a builders labourer on numerous building sites, building countless houses.
Saved hard and invested wisely, definitely had some good and bad fortune. Now I can help others and still help building and renovating houses and improving land use. It has most certainly not been easy for me, although am extremely lucky and grateful to be born in a good century in a fantastic part of the world.
Raised kids, contribute to my community, look after my family. Contribute to investor forums :)

As an almost millenial, theres still a lot more I can offer in my lifetime, but I'm doing my best and hope to get there over time

by JimmyJames | 6th Sep 20, 4:37pm 1599367072

That's comical. You're not investing in transformative change for humanity. You're just extracting the life blood of other people to pay down debt you created. You're a tax on their time. That may be smart but don't kid yourself that your actions are born out of benevolence or that you're enhancing other peoples lives. You're just a drain on the hopes of other people. Happy investing!. :).

by MadMax | 6th Sep 20, 5:37pm 1599370640

Thanks for pointing out my failings Ghandi.
What do you recommend I do besides building houses for people to live in? Sell them at a discount to cost?
And what do you do with your life thats so benevolent, when you're not doing the keyboard warrior thing?

by Yvil | 7th Sep 20, 9:08am 1599426494

Cry me a river

by Albert2020 | 5th Sep 20, 1:11pm 1599268286

I and I am sure many other commentators disagree. His data is granular and analysis is on point. He also has the distinct advantage of being in the field.

by mikekirk29 | 5th Sep 20, 1:16pm 1599268572

Reasonable comment
But not all readers are investors
And it is not necessarily in investors interest for prices to go up all time
If prices fall, bargains can be obtained
Prices rise good for capital gain but yield and income stream is what I thought investors were primarily interested in. Yield not aided by price rises if you are mortgaged unless rates keep falling. Which comes to an end eventually

by mikekirk29 | 5th Sep 20, 1:44pm 1599270288

I pitch facts and analysis and theory based on facts. Not fear. Not paranoia. Most (except Printer) who argue against my theories seem to have to resort to name calling. Bit lazy that

by Te Kooti | 5th Sep 20, 2:45pm 1599273957

I haven't read any comments calling you names, which could be paranoia?

by Albert2020 | 5th Sep 20, 3:14pm 1599275674

Certainly been a number of comments recently implying that his views are left field and is the leader of the so called DGM club.

by taimaiakka0 | 5th Sep 20, 10:14am 1599257671

Whatever anyone might feel but cannot deny that Housing Market is Very Strong and going from strength to strength.

Infact it has never been as strong before as Now.

Felt that housing market may lose it strength once various stimulus and subsidies end but seeing the momentum have doubts. Keeping track of in Manukau area and Houses that were earlier going near around 900s are now going for million plus and much more.

Very Strong Market as supported by reserve bank and government knowing very well that only economy in NZ is housing so more proactive support and promition than other business.

by stuart786786 | 5th Sep 20, 11:00am 1599260400

One should remember that last year market had started to pick from September / October.

Market was down between November 2018 to September 2019 so will be interesting to see comparison from October onwards.

This does not deny the fact that as of now are witnessing strong boom in housing market not only in NZ but in most developed countries.

by mikekirk29 | 5th Sep 20, 12:27pm 1599265633

Indeed. If you do look at rolling 12m sales the variation is 5% or fewer sales pa around the 23000 mark in last 3 years. Meaning that when there is surge it dissipated in later months and like wise with drops. But that narrative fact is not catchy enough

by CourtJester | 5th Sep 20, 11:10am 1599261036

The housing market in NZ is like a sick patient pumped full of drugs and hooked to a ventilator. Calling it strong is very misleading. Without the insane amounts of stimulus it has received from the doctors (RBNZ & govt), it would have died already.

by Yvil | 5th Sep 20, 11:32am 1599262348

Would have, could have, should have… CJ you will be much better off dealing with what actually is, rather than what you think would, could or should, be

by CourtJester | 5th Sep 20, 11:34am 1599262498

My comment addresses "what actually is".

by RickStrauss | 7th Sep 20, 9:37am 1599428223

Morals, ethics, intergenerational legacies, these things matter not. It's all about how we can profit and if it takes wealth transfers from the poor to rich then that's a sacrifice those born at the right time to profit are prepared to make. None of those time wasters who fought for better for more in society!

by tothepoint - d… | 5th Sep 20, 4:45pm 1599281108

A major concern must be the elderly: they now receive bugger-all return from their term deposits.

Also in jeopardy are first-home buyers who have diminished hope of getting a footing on the housing ladder.

I suggest everyone here show some compassion for the above two groups.

Not worried about the DGM: there was never any hope for them anyway.

TTP

by Nzdan | 5th Sep 20, 3:04pm 1599275042

At least the elderly should be mortgage free, with a gold mine in capital gains awaiting them. If they aren't then they've made their bed and should lie in it.

by Fritz | 5th Sep 20, 3:13pm 1599275593

It's nice that you seem concerned for these two groups. So what do you think could be done to address those concerns? If you were prime minister TTP what would you do?

by tothepoint - d… | 5th Sep 20, 4:29pm 1599280175

Hi Fritz,

First thing I’d do is give local authorities a good slapping. They’ve long been a hindrance to everyone - in particular, ripping people off with fees for building consents and resource consents. Plus, they’re slow and inefficient. A shocking case of exploitation by a statutory monopoly.

TTP

by mikekirk29 | 5th Sep 20, 1:47pm 1599270442

Er no. I studied Manukau sales in detail yesterday. They fell 54% in lockdown and only rose 6% in June and July. Prices are up 13.5% in last year if that is what you are solely interested in. Simple really price rise and sales drop

by EmperorXi | 6th Sep 20, 10:52pm 1599389578

Isn't this sort of rationale the cause of a Bubble to burst ?

by CJ099 | 5th Sep 20, 10:44am 1599259494

Mean while in Australia now that they're in recession. News article: "When homes earn more than jobs: How we lost control of Australian house prices and how to get it back".

Quote: "Real home prices across Australia have climbed 150 per cent since 2000, while real wages have climbed by less than a third. Sydney and Melbourne rank among the most expensive cities in the world. Australia-wide, home ownership levels have fallen from 70 per cent to 65 per cent in the past 20 years and home equity levels have fallen from 80 per cent to 75 per cent. Younger workers have been completely priced out of the major cities". https://www.abc.net.au/news/2020-08-18/house-prices-how-we-lost-control…

by MadMax | 5th Sep 20, 10:54am 1599260062

Nice CJ, is well worth considering and a ponder.
Academically at least NZ and Oz housing markets are hitched together.

by J.C. | 5th Sep 20, 12:43pm 1599266615

Academically at least NZ and Oz housing markets are hitched together.

Not 'academically'. The correct adverb is 'financially'. This is one big credit bubble 'hitched' to the Aussie banks' ability to lend money into existence at a rate that is far greater than individuals and households ability and capacity to generate income.

by Seve | 5th Sep 20, 6:30pm 1599287411

Ive lived in a number of states in Australia and now live in NZ ,when i compare the cost of houses and the cost of living with the exception of Sydney and Melbourne metro and many arguing that rents have fallen in these areas ,NZ is far more expensive,Ive lost count of the number of Kiwis who said to me in NZ i lived from hand to mouth :but, in Oz i actually saved money and lived a better life.
I fear more for this country.

by iconoclast | 5th Sep 20, 12:24pm 1599265462

All the sales last year and this year - The base line CV is fixed at July 2017

What isn't revealed is the margin that selling prices exceeded the July 2017 CV

It is possible that the (average) margin above CV for the 2019 50% was greater than the (average) margin above CV for the 2020 84%

by mikekirk29 | 5th Sep 20, 12:22pm 1599265378

Sorry but this indicates v little of significance
Tempting to say: so what?
Sales are up in winter and we’re down in Autumn lockdown. What a shock. BT says sales up 42% in August yoy but does not say that since Feb the rise is 0.004%. Auctions are liked by Agents and people cashed up. So?

by Davo36 | 5th Sep 20, 4:19pm 1599279581

I guess you can pick the time window to show what you want Mike?

by mikekirk29 | 6th Sep 20, 7:15pm 1599376507

As all can
But I look at multiple time frames

by mikekirk29 | 5th Sep 20, 1:04pm 1599267861

Is it only yesterday that interest co no cited REINZ as stating prices for current Auckland sales are 5% above 2017CV. Yet here we are today with the hoopla re auction sales over CV. Number sample size and comparability seem ignored depending on pre existing stance. Yes prices are rising. And we know why: current shortage of good stuff for sale plus people after safe havens when stocks are ridiculous valuation and set to crash. Sales are NOT rising except month cf winter of 2019, which was weak anyway. Spurts of increased sales interspace with drops and it evens out at 22500 to 23500 pa since mid 2017. However that compares to 30000 in 2013 and why do you think sales are so far down compared to 2013? Cannot be price exceeding rationality driven by constant rbnz goosing via interest rate cuts? Prices rise because too few decent properties for those wanting to buy plus banks can lend more every time rates are cut”. This game ends when no more can be cut

by BadRobot | 5th Sep 20, 2:08pm 1599271705

You say "stocks are ridiculous valuation and set to crash" - according to what metric. If you use Stock market capitalisation, percent of GDP NZ is 52% whereas the world average is 83%. You could argue that the NZ stock market is undervalued compared to the rest of the world. It is called the Buffett indicator (by comparison the US is 179%).

https://www.theglobaleconomy.com/New-Zealand/stock_market_capitalizatio….

Edit: Added link

by mikekirk29 | 5th Sep 20, 2:40pm 1599273605

There are plenty of folk who officially "cannot" buy due to OBB, who do so via corporates and they are looking at safe havens.
Metric which tells you world markets are over-valued is PE ratio generally.
But any market like S and P 500 or nasdaq or DJIA up as much as they are since March, is at odds with reality for the 80% who own no shares.
The vacations are based on Fed socialism and leveraged share sell out capacity. An obscene joke.
Just take a look at Tesla in last year, re Wolf Richter column. No profits just loans or credits from government (common theme) and its share price quintupled in a year before dropping 25% this week. Farcical.

by BadRobot | 5th Sep 20, 2:52pm 1599274378

But the PE ratio is for individual company's not the whole market. While yes some company's are insane, others are less so and some are a steal - the trick is knowing which company's. Additionally you are using the US - the US is not the world (but don't tell the Americans).

by Fritz | 5th Sep 20, 3:16pm 1599275807

Does anyone have any anecdotes on who is at the auctions? I have been told that it's always a bit suspicious when young people of Asian ethnicity (with foreign accents) are bidding on high value properties. Apparently it's often a sign that they are the 'front' for an offshore interest.

by Davo36 | 5th Sep 20, 4:22pm 1599279743

Shame on you Fritz, repeat after me "All Asian looking people bidding at auctions are NZ residents or citizens. They have worked hard and saved their money over many years. Overseas Asian buyers make up 3% of all transactions."

Say this into the mirror 20 times each morning until you believe it.

by Poppyc | 5th Sep 20, 6:01pm 1599285690

Agent said to me today they are talking down their clients expectations. They think they are sitting on gold because of Chinese buyers recently buying bigger lots in the area to subdivide for townhouses. But you need the right land for that...

by mikekirk29 | 7th Sep 20, 10:03am 1599429803

In respect to this, see my long reply to Printer above.
Look at Albany gains in June and July compared to loss in Aril and May,
For whole of Auckland he % made up is 42.5%
In Albany it is 86%.
Albany has an ethnic mix of about 40% Chinese.
In S. Auckland it is below 10%. Papakura and Manukau have recovered least.
Also, sales gains are 7 times higher in $1.5m and above bracket compared to under $900k.
I think this goes some way to helping with your auction question

by Averageman | 5th Sep 20, 1:22pm 1599268966

Seems the worst place to be is cash in the bank or in non appreciating assets. Not much noise on other investments like art or classic cars. They are going up as well.

Non asset holders and the retired savers are getting screwed. Wonder how they will vote.

by J.C. | 5th Sep 20, 1:35pm 1599269753

Seems the worst place to be is cash in the bank or in non appreciating assets

Incorrect. While cash in the bank 'appears' to be the worst place to be, it enables choice and freedom. For ex, let's say you wanted to go all in on Bitcoin after a market correction. If you don't have fiat to buy, there's very little you can do. Cash gives people the opportunity to capitalize quickly. Basically, cash in the bank means you have removed yourself from the shackles of living paycheck to paycheck.

by CourtJester | 5th Sep 20, 10:16pm 1599301018

I have a smallish portfolio of collectible card games (sealed products only). There has been a significant boom going on for the past 3 months or so, with certain items' prices going up by 100-200% over a matter of weeks. The normal long term average increase used to be 7-10% p.a.

by JimboJones | 6th Sep 20, 6:37pm 1599374279

I imagine that seemed like the worst place to be before any crash. It is starting to feel like that magic moment when everyone thinks they can’t lose and need to pile in before they miss out...

by mikekirk29 | 5th Sep 20, 1:46pm 1599270384

Question: total auctioned by BT in 2019 v 2020 in first 8m of year?

by Davo36 | 5th Sep 20, 4:23pm 1599279838

Please stop using confusing abbreviations? If you want to say Barfoot and Thompson, spell it out. And to me '8m' always looks like 8 minutes. Please stick the extra 5 characters on the end so you make more sense.

by Albert2020 | 5th Sep 20, 6:27pm 1599287277

You obviously understood the text so what are you bleating on about?

by Yvil | 5th Sep 20, 2:02pm 1599271343

The refusal by some to accept the figures from the above article is unbelievable, if it stated "much fewer houses for auction and a significantly lower clearance rate + a lot less houses achieving sale prices above CV", then I would say "the RE market is clearly getting weaker". Being entrenched in one's position and refusing to accept the above figures is really unhelpful for making sound decisions

by J.C. | 5th Sep 20, 2:14pm 1599272098

"much fewer houses for auction and a significantly lower clearance rate + a lot less houses achieving sale prices above CV",

The only thing that can be 'proven' is that the CR is higher at a 'statistically significant level' for last weekend compared to the corresponding weekend last year.

by BadRobot | 5th Sep 20, 2:17pm 1599272227

The article isn't really saying very much - it says a certain number of houses were sold , that a majority were above GV (but not by how much - could only be by $1 - which is still above GV). Both camps seem to be desperate (and I use that word purposefully) to "prove" their favoured viewpoint. I believe this is the result of the uncertainty that is currently washing over the world.

by J.C. | 5th Sep 20, 3:27pm 1599276477

The article isn't really saying very much - it says a certain number of houses were sold , that a majority were above GV (but not by how much - could only be by $1 - which is still above GV)

Furthermore, GV is a construct and not a benchmark for market value.

by Fritz | 5th Sep 20, 4:13pm 1599279238

Some people, like P8 and Yvil (same person), don't seem to understand that.
Which is a bit worrying for a property guy.

by Yvil | 5th Sep 20, 4:42pm 1599280921

Guess who's made more $ millions "not understanding that"?

by Fritz | 5th Sep 20, 5:42pm 1599284540

You are one cheesy and tasteless dude.

by Yvil | 5th Sep 20, 7:41pm 1599291695

You forgot to mention filthy rich. ; )

by BadRobot | 6th Sep 20, 12:30pm 1599352250

If you are so rich what does it matter what happens to house prices or is it that all your "wealth" is in housing. Just saying.....

by Yvil | 6th Sep 20, 2:33pm 1599359596

BR, I'm just playing with Fritz, at his own game

by al123 | 5th Sep 20, 5:49pm 1599284947

Yvil, practically every one of my friends parents have made at least a million on their properties. Not because they are all geniuses, but because they were born at the right time. They were able to buy houses as soon as they were at the right stage of life, and they benefited from 40 years of policies which boosted asset prices. Making money on property in that kind of environment has a lot to do with luck and very little to do with financial smarts.

by b21 | 5th Sep 20, 10:04pm 1599300297

Exactly, and this is why we need a redistributive policy to compensate for the new generations.

by mikekirk29 | 7th Sep 20, 10:05am 1599429914

Segment market. If not all you get is meaningless and misleading averages and medians.
Market at top end is steaming ahead. Lower down it is dropping
Poor areas and apartments esp inlayer brackets dropping
Big houses in periphery selling well.

by stuart786786 | 5th Sep 20, 2:21pm 1599272480

Listen to one doomer

https://youtu.be/OBUh4zIuQco

What an extreme view.

by CJ099 | 6th Sep 20, 9:04am 1599339869

That's not a proper Youtube link so of course it's dodgy. I never click on that kind of stuff far too risky (Make sure you run your virus checker).

by CourtJester | 6th Sep 20, 11:08am 1599347304

Youtu.be links are legit, the domain is managed by Google.

by Tillers | 5th Sep 20, 2:31pm 1599273102

Interest rates are down and expected to fall further. People are able to borrow more with the lower rate, drop in servicing levels and the temporary halt on the LVRs. How are people surprised that house prices are rising? It’s the perfect conditions for it...as long as you don’t lose your job. Even then I can see next year when unemployment rises the RBNZ taking over those loans of people who can’t afford to pay their mortgage just to stave off an asset sell off

by Nzdan | 5th Sep 20, 3:12pm 1599275549

I'd rather see loan forgiveness and in the process the houses being handed over to complete Government ownership. Rent back to the occupants at 30% to 40% of pay. Avoids the asset sell off. Replenishes housing NZ stock.

by J.C. | 5th Sep 20, 5:08pm 1599282525

Not long ago, the RBA was about to advise the govt to shut down the property market. They believed that a 'crash' of 10-15% would be enough to devastate the economy.

https://www.abc.net.au/news/2020-06-18/reserve-bank-considered-asking-f…

by Davo36 | 5th Sep 20, 4:25pm 1599279934

Good news, the housing market goes up. Bad news, the housing market goes up. Doesn't make a lot of sense.

by b21 | 5th Sep 20, 10:12pm 1599300728

It can't never be good news when a first necessity asset goes up in price, specially in times of raising unemployment and crisis, luckily reality shows weakening prices regardless the activity in auctions.

by CJ099 | 6th Sep 20, 9:07am 1599340024

Yes it's such a false economy.

by Kate | 5th Sep 20, 10:13pm 1599300813

Wouldn't that be expected given the valuations are a year older now?

by printer8 | 6th Sep 20, 6:27pm 1599373661

Kate
Only if the market has seen house prices increase in that year.
Cheers

by iconoclast | 6th Sep 20, 5:02pm 1599368539

In the space of a week - Another ¼ acre section gone
The inventory of these properties is diminishing
Last Week 11 Hayr Road Three Kings sold for $2,900,000 land value only at $2377 per square metre

This week 18 Arthur Street Ellerslie sold for $3,813,000 land value only at $3140 per square metre
It will be bulldozed - might try selling it for removal - unlikely
This week a six-bedroom on a 1214 sqm section in the central Auckland suburb of Ellerslie sold for $3.813 million – nearly $1 million above the 2017 CV
https://www.oneroof.co.nz/news/38376

by house hunter | 6th Sep 20, 6:09pm 1599372576

Thought for the day: the 5 year bright line test was only introduced in March 2018. Therefore, all things being equal, we'd expect sales volumes to continue decreasing until March 2023.