Barfoot & Thompson's auction rooms remain in buoyant mode at the start of spring

Property

Overall sales rate of 68% at Barfoot & Thompson's latest auctions

15th Sep 20, 9:35am by Greg Ninness

Activity in Barfoot & Thompson's auction rooms has continued on a steady footing for the start of the spring selling season.

The agency marketed 98 properties for sale by auction in the week from 7-13 September, up from 88 the previous week.

Of those, sales were achieved on 67, giving an overall sales rate of 68%, barely changed from the 66% sales rate the previous week.

Those numbers suggest the market is continuing in its recent buoyant mode, although we are yet to see a substantial lift in auction numbers as the market sparks up with spring weather.

At Barfoot's major auctions where at least 10 properties were offered, the sales rates ranged from 57% at the Manukau auction to 85% at the Shortland St auction on September 11, where most of the properties on offer were from west Auckland (see table below).

However, sales in all districts of Auckland appear to be benefiting from the generally buoyant conditions.

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

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49 Comments

by stuart786786 | 15th Sep 20, 10:03am 1600120983

Housing Market is too strong.

See the results - most houses that are been sold in Auction are going much much above the RV by 20% - 30%. Market is crazy.

Any fall in interest rate is offset by the rising house price and is good for investors/speculators than FHB. To pay slightly higher interest on 850000 house is better than paying slightly lower interest on same house for 1050000 - infact the weekly mortage will be higher even though the interest rate is low and also will have more / higher debt.

By the time consequence of panademic are felt, house prices would have reached to heights that even slight fall will not benefit FHB.

by richard1965 | 15th Sep 20, 10:09am 1600121374

It seems market is totally distorted but is it OR is this the new norm - Falling Economy /GDP and rising asset class be it stock or housing supported by reserve banks and government - promoting Debt and punishing savings.

by CapitalNone | 15th Sep 20, 11:04am 1600124689

Aren't we lucky to have our reserve bank juice the housing market! I'm sure all those recently unemployed, or with lower wages will be thankful to be saved with the higher cost of housing

by RickStrauss | 15th Sep 20, 12:08pm 1600128538

They will surely be thankful to NZ's Reverse Robin Hood.

by CapitalNone | 15th Sep 20, 1:26pm 1600133214

Duplicate

by taimaiakka0 | 15th Sep 20, 10:18am 1600121926

With FHB it is no more rational or fundamental but FOMO at play.

Similarly in stock market it is first time retail investors who are going all out and till now have been lucky and many experts including likes of Warren Buffet have been watching all this from sideline.

In both stock and housing first timers are streching and going beyond and if the markets continue the way it is now that is up is good or may see bloodbath on the street

by Apex Andy | 15th Sep 20, 10:16am 1600121771

Surely nobody believes anything the real estate industry reports anymore. They release the data that suits the moment.

by alittle | 15th Sep 20, 10:37am 1600123034

Auction data of houses sold in auction cannot be manipulated and does reflect extremely hot housing prices, which would have been unheard of before the lockdown in such a short time.

Housing market is not not just steady but very high. Expectation were that will fall by 10% or 20% or may be 30% but opposite has happend and have gone up by 10% to 30%+ and still rising.

Question now is not when will it fall but when will the rise stop.

For now Housing Market = Technology stock which are touching all time high despite economy been badly hit with shut downs world over.

by Greg Ninness | 15th Sep 20, 10:28am 1600122503

You should have confidence in Barfoot's auction results Andy because their auctions are streamed live over the internet and anyone can watch them. They would soon be caught out if they were fudging the numbers. It's the same with most auctions now.

by printer8 | 15th Sep 20, 11:07am 1600124829

Spoiler Greg. :)
Makings of another conspiracy theory there.

by Nzdan | 15th Sep 20, 11:32am 1600126363

They normally just double count apartment sales.

by company of heroes | 15th Sep 20, 3:23pm 1600140221

Havent they already got caught in Hamilton?

https://www.interest.co.nz/property/106981/total-fines-real-estate-pric…

by Chairman Moa | 15th Sep 20, 10:17am 1600121857

People are buying houses on government job seekers support?

by alittle | 15th Sep 20, 10:38am 1600123118

Agree but whatever the reason, for now market is very hot with no sign of slowing.

What might happen in future no one knows even the reserve bank who are printing money and even experts or government as all are experimenting with only one goal that come what may housing and stock market should not fall and whatever stimulus to other businesses is also actually to support housing and stock market.

by Chairman Moa | 15th Sep 20, 10:43am 1600123400

NZ will get caught in this drift. Their govt will discourage or making it harder for their people to buy more houses aboard. This was posted a day ago.
https://www.abc.net.au/news/2020-09-13/chinese-investment-in-australia-…

by richard1965 | 15th Sep 20, 10:49am 1600123742

In China they always find a way to play around to get what they want. Before a policy or law is introduced their loopholes are also created to beat the system.

by Chairman Moa | 15th Sep 20, 10:56am 1600124206

They have ability to cripple small economy like NZ, just to show who's the boss.

by stuart786786 | 15th Sep 20, 11:21am 1600125702

Agree that China cannot be trusted as they believe in dictaing, specially now when are going all out with economy war, biological war and traditional war for land and sea.

by mikekirk29 | 15th Sep 20, 11:57am 1600127834

If you study the trend of sales from 2006 to date, you find that market has a 56. month cycle.
It takes about 4.5 years from peak to trough and vice versa, in sales terms.The current "surge" has only been in place for 3 months. Surges last 5 months max before declining and reversion to the mean.
Last 3m has not risen to level of 2015, for same 3 month period.
Also, this is a ramped up finance induced rise, not demographically driven.
Demographic push (max number of people age 40-47) occurred in 2013-18.
Next one acc to stats NZ , is not due until 2023.
So, once the folk who want to move up scale by borrowing more and paying less interest than they did at lower loan level, have had their fill and sugar hit wears off, stagnation will set in again, from end of October.
Sales in Dec 17 to July 18 excluding April and May (6m) were 15,093 (to resemble lockdown restriction)
In Dec 18 to July 19: 9,935 (excl April and May) ie the fall off was 34%
In Dec 19 to July 20, excl April and May, the sales total was 12,771, or a rise of 28.5%

The 2014-15 surge was driven by pop rise
In 2019-20 there is no pop rise. Figs for returning kiwis are all over the place, with little certainty re source and validity. Also, it is age of increase that matters, not just raw numbers.

Proper boom will not occur until demography supports it and Stats NZ says that will not be til April 2023 at earliest. This is a false dawn I am afraid. Sorry.

Plus, at moment no one has looked at what happened in 2007-09, for comparison.
At the time of GFC, all this support was not given to bottom 50% of earners, as it is now and also their was not $18b in mortgage holidays.
This is a period of extend and pretend and the ratchet adjustment will be and is being, delayed, as many acknowledge.

HPI in GFC fell from 1873 in December 2007 to 1338 in April 2009 and sales fell (8m block) from 23,860 to 11,332, or over 50%.

So far we are in the tea party phase.

Sales boosted from 11, 332 (8m block) to 16,458 by end of November 2009 but this did not last and fell back to 12,543 in Aug 10 - March 11.

The current 56 month cycle started in April 2017 and so far has not produced an 8m sales block above 15,790.
That figure is what was achieved in April 2011 to November 2011.

At present everyone thinks it is a miracle but they have not sufficiently examined the historical record.
I have spend a few hours this week doing just that.

by CourtJester | 15th Sep 20, 1:04pm 1600131862

One has to be cautious when looking for cycles. It's not impossible that there is indeed a cyclical behaviour of 'the market'. The problem is however, that people who can affect the market may also be keeping an eye on such patterns.
Say, if people found out that there was a 10 year cycle in stock prices, the more people knew about it the more likely this cycle would be distorted. If most people thought that stock prices would fall 20% by the end of 2021, would they wait until the end of 2021 to sell? Or would they sell a few months earlier, just to be safe, thus distorting the cycle?
If the RBNZ noticed that a pattern was emerging that's considered an early indicator of a crash, would they just sit on their hands or change the rules of the game to prevent the crash?

by mikekirk29 | 15th Sep 20, 1:34pm 1600133675

My point of researching sales since 1995 is to see underlying cycle which is v clear.
Sales have upswing and downswing and it is regular.
Even episodic economic ups and downs do not measure up to demographics.
Plus land of Auckland is limited in supply.
Price of land continues to rise and cost of borrowing continues to fall.
You get less land every few years, for same price. Inflation.
What happens when they cannot cut rates any more?
This is question no one in MSM wants to vocalise. Because they know the answer. Stagnation returns and easy money gravy train ends

by CourtJester | 15th Sep 20, 1:46pm 1600134406

"What happens when they cannot cut rates any more?" - I'm afraid they'll come up with novel ways to keep kicking the can down the road. Low rates have been the norm for 10 years now. How long will negative rates be the norm for? 10-20 years? Forever? The word 'debt' is becoming meaningless in front of our eyes.

by Shoreman | 15th Sep 20, 1:58pm 1600135128

M29 of course there is a cycle ( speakingof Auckland ), new upcycle 2020 starting right on que. 9 year cycle been following it for 40 years. Previous cycles started 2011, 2002, 1993.

by Anzac888 | 15th Sep 20, 12:40pm 1600130414

HoHum! 68% Clearance rate of one (1) REA. Doesn't mean that it represents the total market. How many properties are sold in a year? Run data (All sales) since 2000 and compare, evaluate and analyse. I'm sick of reading puff pieces about real estate much like the tsunami of returning Kiwi's returning home and purchasing property in large numbers.

by Greg Ninness | 15th Sep 20, 1:03pm 1600131822

You may enjoy the article on the latest migration trends we ran yesterday Anzac. It puts the number of returning kiwis into some perspective. You may also find our nationwide weekly wrap of auction results useful. The next one will be out later this week.

by Chairman Moa | 15th Sep 20, 1:08pm 1600132125

There are a number of Facebook pages for kiwis living aboard, especially for kiwis in Australia. At arrival of Covid, there was a number of kiwis returned home to shelter this pandemic. Now, I notice they are looking at returning, judging by the post asking for hints and tips.

by CourtJester | 15th Sep 20, 1:07pm 1600132067

Some people are getting upset every time auction results are posted here. I'm glad stats are being posted - and consider the analysis of said stats to be my own duty. My advice to everyone who's sick of reading narratives instead of stats is to just ignore the title and look at the numbers instead.

by Just a farmer | 15th Sep 20, 12:50pm 1600131043

Meanwhile REINZ release that dairy farm prices have crashed 29% in the last year and it doesn’t even rate a mention here.
Who cares that the productive economy is being decimated, we can just keep selling houses to each other at ever increasing prices so everything will be fine!

by Fritz | 15th Sep 20, 1:06pm 1600131972

Someone was raving on here the other day about how well the rural sector was doing...

by Shoreman | 15th Sep 20, 1:33pm 1600133625

Fritz - The rural sector is doing well outside of wool, dairy payout is good, dairy land prices are currently dropping expectations are for a 10-15% drop who knows look at the previous house drop statements. NZ terms of trade are at a record mostly on rural productivity .Get your facts straight, perhaps Interest.co.nz could do a article on this. Outside of dairy farms record land prices are being had especially on viticulture, horticulture .

by Fritz | 15th Sep 20, 3:05pm 1600139105

Do you know better than 'Just a Farmer'???

by Shoreman | 15th Sep 20, 3:18pm 1600139938

Fritz - Probably I'm involved in Dairy,Kiwifruit and Forestry what are your credentials ? Other than just wild non factual statements ?

by Fritz | 15th Sep 20, 5:45pm 1600148751

Fine.
That means I can comment on housing in cities and you can't then. Because I am an urban designer with an economics degree, live in a city, and own a house in a city.
Agree?
By the way, non-factual? Dairy land prices are way down. Obviously that's just one part of the rural sector, but still...
Oh oops, I can't have an opinion 'outside my expertise'

by MadMax | 15th Sep 20, 5:55pm 1600149312

Settle Cecil...

by Fritz | 15th Sep 20, 7:42pm 1600155755

Sure Ttp
Paid your find yet?

by Shoreman | 15th Sep 20, 3:20pm 1600140040

Fritz - Probably I'm involved in Dairy,Kiwifruit and Forestry what are your credentials ? Other than just wild non factual statements ?

by youngdumbandbroke | 15th Sep 20, 1:41pm 1600134087

That's because the rural sector is busy producing a tangible product, not asset flipping.

by Greg Ninness | 15th Sep 20, 1:16pm 1600132598

Hi Just a farmer. We usually cover the REINZ's monthly rural report. You can read our article on last month's report here. We'll be covering this month's report as usual when its out in a week or so.

Cheers.

by puketepapa | 15th Sep 20, 4:53pm 1600145611

Yep, and meanwhile the URBAN creeks and beaches continue in their polluted unswimable states, no worries

by Shoreman | 15th Sep 20, 3:15pm 1600139729

Puketepapa - That's a old predictable statement are you connected at all with the rural sector. Farming has been very active in spending money on mitigation of farm waste for several decades. Fonterra for example has environmental standards and active plans that their farmers need to adhere. You probably live in a city and of course never contribute to any pollution right ! Yeah right ! Have a Tui !

by puketepapa | 15th Sep 20, 5:45pm 1600148748

Should I have put the word URBAN in capitals instead of lowercase ??? There, fixed
Auckland METRO beaches and creeks are polluted
Have been for 50 years. Nothing done
Beaches get closed every summer due to human effluent
Wellington had a serious sewerage discharge into Wellington Harbour 2019
Maybe they should get Fonterra to run the Councils

by mikekirk29 | 15th Sep 20, 1:30pm 1600133450

Peak of 8m block sales was in 2003, at 27,873 for April to November period. (pcm = 3484)
In last 40 months up to July 2020, pcm sales running at 1845.
The 64 month block fo sales we are in now most resembles that of 2006-11, when average pcm was 1937.
Every 64 month block of time, sales go up or down between 33% and 62%
We are in down phase. So, I see no reason to expect sales to exceed 1937 pcm
The last up phase was of course Dec 11 to March 17, when pcm average was 2,397

Last 3m (June, July, August) only averaging 2480
In 2006 the 3m average was 2757
In 2015 it was 2873.

3m does not make a summer, nor a cycle

Yes, some might regard all this as highly arcane and not relevant but it is a LOT more representative than a week's auction sales.

Cycle is driven by demographics and land availability.
Only short term cycle of a few months is driven by rate cuts.

by Fritz | 15th Sep 20, 1:39pm 1600133953

by b21 | 15th Sep 20, 1:42pm 1600134166

It would be really interesting to know the exact proportion of homes taken to auction these days compared to previous years, it give the impression that the clearance rates are just a result of agents and owners just going to auction if they are sure they will sell.

by printer8 | 15th Sep 20, 4:29pm 1600144163

b21
"Auctions were used in 16.1% of all sales across the country in August, with 1,232 properties selling under the hammer – up from 10.6% at the same time last year, when 650 properties were sold via auction. This was the highest percentage of auctions for the month of August in 4 years." REINZ Monthly Report for August 2020 published 11 September, page 8.

Auction activity is up as it is more commonly so in a changing market - either up or down - when there is a degree of price uncertainty/greater competition/greater desperation. It is not surprising that currently given the increasing prices that the number of auctions are up.
Although limited due to number and likely range of properties, auction data is the best current real time reflection of what is happening. The increase in both the number of properties and percentage both selling and well above RV are currently good indicators (not use of "indicators") of what is currently happening and strong REINZ data next month should not be a surprise.

by Crazy Horse | 15th Sep 20, 1:45pm 1600134356

Anyone know what's happening up in Northland ie Bay of Islands, Kerikeri etc ?
Just had a look at the auction results on this site and nearly all passed in ?
Cheers CH

by b21 | 15th Sep 20, 2:11pm 1600135915

I have counted the use of the "buoyant" adjective in this article 3 times, including the link in the front page.

Obviously the writer is free to express an opinion in the means of using the wording he prefers, in my opinion for what may seem "buoyant" for some is actually pushing the future of many to the bottom by means of debt being issued irresponsibly by the banking system and supported by the RBNZ.

Every narrative has its keywords built with an interest in mind, it is up to us not just readers but also journalists to apply some critical thought.

by Colmolo | 15th Sep 20, 5:15pm 1600146918

I have met many real estate agents recently and alot of then are from lucrative background such a law and medicine. A real estate agent I met in the weekend use to be a medical Dr in NZ but became a real estate agent because it was more lucrative. That seems crazy to me. Maybe I should become an agent also it seems to be a gold rush.

by Te Kooti | 15th Sep 20, 4:32pm 1600144328

Why not, you can write the Urus off against income tax. I might even become an agent as well. Employ some millennial's to door knock boomers and clip that ticket. What about a buyers agent, I can help you for 1%....