Barfoot & Thompson's auction rooms finish the year on a high note

Barfoot & Thompson's auction rooms finish the year on a high note

Activity in Barfoot & Thompson's auction rooms is remaining elevated almost right up until Christmas Day this year, with the agency handling 316 residential auction properties last week (12-18 December) and about another 90 properties due to be auctioned on Tuesday 22 December.

There will then be the usual Christmas break until auctions recommence on January 19.

Of the 316 properties marketed for auction last week, sales were achieved on 176, giving an overall sales rate of 56%, little changed from the previous few weeks.

The highest number of properties offered were in Auckland's central suburbs, which provided 90 auctions.

Sales rates ranged from 25% for the Northland properties auctioned to 62% for the Manukau properties (see table below for the full breakdown).

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

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47 Comments

She may fall off her foils next year when LVR + DTI? kick in.

Aren't the banks already honoring the LVR anyway?
And will be interesting what DTI level the RBNZ impose if they do. Our bank told me they don't want to loan us much more even though we are only at 4.2x gross income and have >60% equity so I think the bank's are already fairly conservative.

Us too... bank strung us along for weeks asking for various paperwork on the property we were buying and for bits of info about our finances/income. Even though we needed only 10 percent of the property value and we've banked with them for years and years. Luckily we had a second tier lender lined up who gave us 50 percent with minimal hassle.

Went through the loan topup process recently. The amount of questions they ask is significant, all a rules based form filling exercise. Quite annoying really, our equity is so high that there is almost no chance of the bank ever losing out, that should be all they need to know! The process and advisors' time must be a significant cost to the bank.
The advisor kept saying "as a responsible lender we need to know...". I don't need a responsible lender to help me make decisions!

JJ... I could buy a handful of rentals freehold tomorrow, but in the interests of financial responsibility, am choosing not to, despite making a killing on Akld property in the past (1986 - 2015). Be careful what you wish for. There are good reasons why they are balking at approving your loan. You may not feel you need a responsible lender but may well be very grateful you had one in a few years. They obviously have their reasons.

Going through it as well for a car purchase, rather than digging into our savings. What a nightmare. The bank has disabled the online application process, I've made several 1 hour + phone calls each time with different information being given. "Oh you can apply over the phone" "just apply online" "we can arrange for a branch appointment in 4 weeks time" etc etc. Ended up contacting our mortgage broker, hardly worth his time but makes it easier for us.

Did you tackle and shove those FHB out of the way to secure that property Fly High?

Nope only infestors... I came out top of the maul and scored the seven pointer (thats enough puns now). A group of three housies, so no interest to any fhb

JJones... quite possibly you will look back at this as a blessing in disguise. Who knows.

Unwritten: RE NZ in hibernation = 20 Auckland new listings at 11am for today.
2 weeks ago it was 140 by 11am.
Auckland total listings of Houses and townhouses today 4445, down from just over 6000 at peak.
Yes this is normal for xmas.
Auction sales relate to conditions when they were launched, 4 weeks ago.
Interest not offering any prospectus on what market will or might do when it re-opens about January 12th.
Reality is that the mania is likely over as RB and some banks like ANZ have removed stimulus for investors.
Meanwhile, the economic surge of massive QE and wage subsidy and mortgage subsidy is about to wear off at same time as no tourist income pulls GDP down. Conditions re sales and prices will be returning to something nearer normal by mid February.

How is your prediction of 25% drop by this Christmas tracking?

Mike is not credible, last year it was 40 percent drop starting April 2020

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Credible forecasting? Who on this subject is left standing with what they thought and said in April? No established and well paid commentators, bank, RB or finance minister in fact. When did we see YOU forecasting anything.

Forecasts of doom get praises and cheers which then encourages the same

25% drop in what? I take it you mean sales in Auckland?
Being wrong in that respect, I am in good company: RB, ANZ, numerous economists, Kiwibank, Westpac several times, all forecast dire sales and falls in prices and then revised their forecasts when economy was out-performing.
When you make a forecast you might get some more kudos for being "right" or liable for being wrong.
The forecast in 2019 and earlier in 2020 was for Auckland prices to fall to $670k median.
I have repeatedly stated that this is not now going to happen and any sensible commentator knows why: RB and Mr Robertson adopting Fed policy of nothing must allow asset holders to lose money. ie abolition of the "free" market.

Hi Mike,

Given your forecasting track-record, you’re best to put your tail between your legs and shuffle off........

That’s what Retired-Poppy did - rather than face continuing humiliation.

Merry Christmas,

TTP

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What happened to "hardhit2"? Did he also get done for price fixing?

My kid is in your city of chch at the moment. He is impressed with the rebuild, so I told him to check out the property prices.

To those who only read what media tells you, try looking at what Auckland CBD one and two bedroom apartments are actually selling for! Supply and demand does work over time. There is a major drop in price both to purchase or rent, as there are no tourists and minimal overseas students. I actually just brought a 2 bedroom apartment good quality, no leaky building issues, freehold land, for 40% less than government valuation for my daughter at University. So covid has crashed some things, not that mainstream media is admitting to it.

Which complex. What was the BC fee ?

B727.. my stab in the dark. 25% chance of 25%+ drop in Akld by Christmas 2021. Wish I could be more positive but with the end of the completely artificial economy in sight anything could happen.

Karl, I wish. But I honestly believe, housing is too big to fail in NZ. Any government would do anything to keep the good times rolling and rolling.... even if it means crashing the economy.

Mikekirk29 if you look at what's selling, the mania is well and kicking. I'm continuously surprised at how much homes are selling for - some auction campaigns only 2 weeks now.

Hi Greg, great stuff this year. Any chance we can get more info next year for Christchurch? We're "interest"ed here too, I note auction results haven't been updated since the 9th Oct is any more info due to be posted?
Merry Christmas

Hi Whynot. We have been unable to source auction results from Canterbury for the last couple of months but hope to be able to resume doing so at some stage next year. Unfortunatley I can't give you a date for that at the moment. Cheers.

Tax equity release when someone uses the equity in an existing property to buy another. Really simple Jacinda just get it done. A bright line tax is pointless because investors are not selling existing property.. just "releasing the equity" which gives them more buying power every time the market goes up.

A bit of a self feeding ponzi. Would be quicker to just have property owners collude with the banks and Core Logic to continually revalue the assets upwards by a pre-determined amount, have a whole lot of interest only mortgages backed only by equity. Cash deposits are for chumps.

Nzdan.. Remember earlier this year when the powers that be (the guilty) decided all the new QEs would be delayed for a year simply because the new figures would not have suited the narrative that they wanted and accurate valuations may have triggered actions that would have been contrary to their agenda? Really is feeling like a rigged game now.

NZ and Auckland house prices and sales to continue rising til infinity and eternity, despite state of work economy and world debt and indeed most over-priced housing in Auckland on Earth (maybe excepting HK but their valuations have cratered in last year). This is the meme that most writers on here are signing up to. Same as what they all said in EU and USA in 2002-07, which was THE biggest bubble that could never burst. Just keep on borrowing, nothing can go wrong.

"most over-priced housing in Auckland on Earth" - I think that is difficult to compare. For example how much does a 4 bedroom detached home on 600m2 of land cost near central London? It probably doesn't even exist!

"most over-priced housing in Auckland on Earth" - I think that is difficult to compare. For example how much does a 4 bedroom detached home on 600m2 of land cost near central London? It probably doesn't even exist!

Auckland is not London though and New Zealand is not UK. New Zealand's housing is highly unaffordable, especially Auckland is in the top 10 most unaffordable cities in the world and New Zealand's economy size is way smaller than other countries. The bubble is there for sure and it's pretty close to burst.
https://www.bloomberg.com/news/articles/2020-01-20/hong-kong-homes-remai...

No Auckland is not London, this is my point: it is hard to compare, hard to say which is expensive, hard to say which is a bubble.

JJ.. I would be comparing house price to income rather city to city comparisons.

That article doesn't show Auckland in the top 10 most unaffordable cities in the world. It shows it in the top 10 out of the sample of cities studied, which was made up of only 8 countries of the World. Countries listed in the report referred to in that article were: Australia, Canada, Hong Kong, Ireland, New Zealand, Singapore, United Kingdom, United States.

Those countries are pretty much most unaffordable countries in the world any way. Can you think of any other most unaffordable countries with the similar political system?

I note that you've added in, "with a similar political system", which wasn't mentioned earlier in the comment thread. Excluding that, the most obvious example is China where price-to-income ratios reach over 40. And at a city level, try some Asian cities like Manila, Jakarta, Colombo, Mumbai. South American cities like Sao Paulo, Buenos Aires, Santiago de Chile. Even European cities like Paris, Milan, Barcelona, Munich.

There is a reason that the article is only comparing those countries, I figured out that those countries shares similar political system, also those countries are developed country. It's not smart to compare housing affordability with countries have different political system. It's free market economy vs non free market economy. There are differences. Also your "China where price-to-income ratios reach over 40" statement is misleading. You didn't provide any evidence to back up that claim.

"Workers Flocking to China’s Tech Hub Can’t Afford to Buy Homes"
https://www.bloomberg.com/news/features/2020-12-20/workers-flocking-to-c...
"...The average two-bedroom unit now sells for about (US)$900,000, in a city with per capita income of just (US)$20,000. With the cost of an apartment equal to 43.5 times a resident’s average annual salary, Shenzhen’s housing affordability is only a notch better than Hong Kong, the worst among 80 megacities, according to E-House (China) Enterprise Holdings Ltd..."

Yes it may be valid to compare NZ to similar countries - I understand your point on that. But phrases like "Auckland is in the top 10 most unaffordable cities in the world" and "most over-priced housing in Auckland on Earth" are simply wrong. On a worldwide basis Auckland is not in the top 10 for highest nominal house prices nor for house price to earnings.

Article in Bloomberg yesterday showed house price-to-income ratio of 46.3 in Hong Kong and 43.5 in Shenzhen. That's much higher than Auckland. Outside of China, Singapore came in at 20.9.

Last 12m sales in Auckland (total sales) to end of November: 36,046 or 3004 pcm
Equivalent to November 2016? = 38,788 or 3232 pcm
Equivalent end of November 13? = 44,133 or 3678 pcm
9 year average pcm for 2012-2020? = 300,362 or 2781 pcm

Stock has risen at least 13% since 2013 in Auckland. Pop up 200k also minimum.
HPI according to REINZ for Auckland up 6% since 2016 (last 5 years)
Sorry for not getting excited.
12m sales to November 2020 are 22.8% below the same 12m ending in 2007
Home owning democracy its not.
Yes 5m sales to end of November 2020 are far higher but this is due to a temporary mania driven , as all know, by financial goosing by RB. It is not sustainable and not representative of a cycle.

For those interested only in last 5m of mania:

2020, 5m to end of November, total Auckland sales: 19,371 (up 31% on 2019 same period)
2019: 14,757
2015: 19,545
2007: 16,122
2004: 20,490

A cycle would look at at least 3-5 years sales and average them.
Yes, it depends on what you select, hence the variety of dates given above.
I did not see anyone wetting their pants when sales and prices went no-where 2016-late 2019.
Perspective is not cherry picking, it is rational analysis

Hopefully less auction room competition after Christmas and news years as people are away at the beach or overseas holidays.......oh wait..

Beaches are full though. Spent the Sunday in Tawharanui, I've never seen this many cars and people there. 100+ cars parked, easily.

Ah, but I’m in Taupo and it’s dead... maybe it’ll kick off after Christmas. All accomodation providers have vacancies... even some of the baches around ours are empty.

Seeing alot of this type of mania:
Old bungalo on the north shore
CV $990k & sold for $1.625 million at auction
https://harcourts.co.nz/Property/934875/TK36827/55-Rawene-road
The open home was lined with FHBs and parents- no doubt they were all highly disappointed

That was a good price. Sold for 587k in 2006. The sales record is quite interesting as we can see it dropped in value in 2000 having sold for 345k in 1997 and then 312k in 2000. A drop of almost 10%. I remember that period as a rare time when Auckland house prices dropped. I rented at that time having sold in 1997 and felt quite chuffed about it however it didn't last long and I had to jump back into the property market after 2000 with some haste which I recall was quite stressful. Always best to just ride out a property downturn or use that time to buy at a good price. Don't dilly dally, a downturn is an opportunity to buy as was 2018 as we can see now.