sign up log in
Want to go ad-free? Find out how, here.

Massive annual increase in both the number of properties auctioned and the sales rates achieved in January

Massive annual increase in both the number of properties auctioned and the sales rates achieved in January

Auction room activity started 2021 with a hiss and a roar, with auction numbers and sales rates both up substantially compared to January last year.

Auctions were particularly strong in Auckland where interest.co.nz monitored 214 auctions in January, up from just 76 in January last year.

Not only were more properties brought to auction, but more of them were sold, with the sales rate climbing to 77% last month compared to 61% a year earlier.

The numbers also suggest that rating valuations have become a lot less relevant to selling prices.

In January last year only 50% of the sales at the Auckland auctions monitored by interest.co.nz achieved prices above the properties' rating valuations, but in January this year 96% of selling prices were above their rating valuations.

Auction activity was also up sharply in the Bay of Plenty, where interest.co.nz monitored 40 auctions in January compared to 32 in January last year.

But the sales rate in the Bay of Plenty showed even more impressive growth, rising to 88% compared to just 50% a year ago.

Prices also look firmer, with 97% of the properties sold achieving prices above their rating valuations, compared to just 47% a year ago.

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

The comment stream on this story is now closed.

  • You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, go to our email sign up page, scroll down to option 6 to select the Property Newsletter, enter your email address and hit the Sign Me Up button.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

34 Comments

All very unsurprising.

TTP

Up
0

But reinforces the evidence as to what is happening.
There is still a lot of money parked in banks deposits that is looking for a home.
KeithW

Up
0

Bank deposits are growing not shrinking

Reserve Bank statistics show household deposits have grown at their fastest rate in four years while, the amount owed on houses just had its biggest monthly rise in 13 years | interest.co.nz
https://www.interest.co.nz/personal-finance/107301/reserve-bank-statist…

Up
0

On the other side of a house purchase with mortgage is a vendor with a bank account. Money isn't "tied up" in housing.

Up
0

Yes, one of the fascinating things about money systems is that credit creation in one part of the system leads in short order to new deposits elsewhere in the system. This is part of the reason why bubbles can continue to grow for a long time.
KeithW

Up
0

And it gets fascinating when the new debt (a new mortgage to finance a property purchase) is used to discharge an existing mortgage. ie: it doesn't get fully recycled.
eg: Mortgage created for $1 million to finance a $1,200,000 place. That $1.2mio gets paid to the vendor who repays an existing mortgage of, say, $800,000. One million in new debt is created and only $400,000 residual if left for the vendor to use.
When debt stops being created and fully used, we have a problem WHEN the price of the assets underlying the debt stalls or, (shock horror!) falls..
That's why we have QE; Unconventional Tools spewing debt into the System. Because if an individual won't, or can't, take more debt on themselves, it will be done for them in the name of 'their' Public Debt.

Up
0

So you could say that our savings rate is increasing too.... two birds, one stoned

Up
0

At some stage, current owners/vendors are going to take the money off the table and leave the new players too it.
It makes sense that at even 0% they'd be happy to do that. They've run the risk; made their return and can now stand back and watch the game from the security of distance.
As I've long suggested, the lower rates go, the more people will save, for all sorts of rational reasons.

Up
0

Went to the auction rooms on North Shore Auckland on Thursday night - 12/12 properties sold and everything was mad. One house valued at 1-1.05m sold for 1.45m and all the agents were laughing and saying is there gold there or something? Just mad and I dread to think how much additional FOMO causes FOMO based off that.

Up
0

Yes I went there too. The most surprising thing was the quality of houses sold at auctions.
Usually better conditioned houses used to be sold at auctions. but not any more.

Up
0

In discussions with a RE agent last week who said the Christchurch market is just crazy too. A house built in 2018 and sold soon after completion for $1.2m just sold again at auction for $2.2m. That's one million dollars in just 2 years.

Up
0

Act leader David Seymour has lambasted the Government for what he is describing as a laundry list of failures, including overseeing the greatest transfer of wealth in New Zealand's history....the average wage for a worker is $55,000 but in 2020, the average house price went up more than twice that, by $121,000, from $628,000 to $749,000....(Labour has) just overseen the greatest transfer of wealth from those who work to those who own in the history of our country."... Speaking to reporters, Ardern said the Government was looking into how it could ...(blah,blah,blah)

Seymour is on the side of politics I'd normally lean towards, and having given Labour; the Party of the People, a go last time; in the idiotic belief they'd actually achieve something tangible for the country, I might have to give him a go next time. That's IF he doesn't muck it up in the meantime. Then, will I get to be disappointed again? It's worth the risk.

Up
0

The deputy leader of Act wrote a stupid article for the Herald, about how people liked to blame immigration for high house prices when really it was only lack of supply. She lost me at that point.

Up
0

Do we get worried we will run out of cars when population increases? Do we get worried that food, electricity, or bowling alleys will become scarce?

The market is busted. Supply is the issue.

Up
0

Why can’t people understand that it is the serviceability that determines if something is expensive or not, not the nominal price to income. In that regard it’s actually become more affordable to buy a home certainly before this latest surge begun.

Up
0

Yes, but there is also the risk of interest rate rises (and unemployment).
Perhaps people committing to a 30 year mortgage only care about this year?

Up
0

Already voted for ACT for the first time last election, saw right through Labour and simply couldn't vote for them and National was a shambles.

Up
0

Excellent results!

Up
0

Obnoxious RE trying to turn Wellington into little Auckland, how pathetic https://www.trademe.co.nz/a/property/residential/sale/wellington/wellin…

Up
0

Ha! "Enquiries over $1,295,000". I fold.

Up
0

What price would you expect Rob I think if it was actually in Ponsonby Auckland the price would be 2 or 3 mill

Up
0

I folded, so I don't need to reveal my hand.
But I will anyway - $400k. In other words, my price expectations are multiples out of whack with any NZ market, because I think we are headed for hyper inflation and rate rises.

Up
0

Adern does not have a f******n clue. There are kiwis sleeping in cars, garages and caravan parks and over 20,000 waiting for a state house. What does she do? - decide to restart the refugee programme. So thanks to the down and out NZers who have been leapfrogged on the right to half decent housing. Your sacrifice is much appreciated and although Adern may get the international accolades your contribution is not forgotten.

Up
0

When even rubbish starts going at premium indicates that market is in danger territory so short term speculators specially first timers have to be cautious ( people who have speculated number of time and have made print in most occasions can afford to take a hit). Also FHB should be fine if have not borrowed beyond.....as are in long term.

2021 will be interesting year to see asset valuation / ponzi as what is happening now happened in 2016.

Up
0

Haha too funny... that RE agent used to work in the prime ministers office!

Up
0

Kachinga must have tipped her off

Up
0

If you intend to buy a median priced house in 3 years time with a 10% deposit, you should be saving $31,398.95 per year (incl. price inflation) for the deposits.

It's actually perfectly doable to purchase a house based on the average household income of $102,613 (June 2019, Stats NZ) especially if you include your KiwiSaver as part of your downpayment.

If only everybody start working on it, home ownership is absolutely achievable- unless you want it now, or work is too hard.

Up
0

What do you do for a living, CWBW?

Up
0

Professional agitator probably.

Up
0

I am guessing he is a real estate agent who maybe works part-time at the comedy club down the road.
Average household wage of 100K less 20K tax, less 25K rent, less 15K food. less 30K house deposit leaves 10K.
So that is $200 a week left for car and petrol, clothes, entertainment, holidays, kiwi saver, insurances, electricity, internet, water, coffees and a monthly subscription to flat earthers magazine.

Up
0

The amount needed to set aside per year depends on the time frame people choose to buy a house with the 10% deposits excluding Kiwisaver:

5 yrs - 22K,
8 yrs - 17K,
10 yrs - 16K.

People who wants to buy a house but can't give up on their smashed avocados, entertainment, holidays and coffees deserves a lifetime subscription to their flat earth magazines.

I'd seen for myself the multitudes that bought their houses based on median household income throughout the years- now tell it to them that it's impossible.

I'm not a RE agent, I have better work than them and they worked well for me.

Up
0

CWBW... I thought your post was looking at $31K PA over 3 years. I will read more carefully in future. If we take the time frame out to 5 or 10 years as per your second post (and prices go up as fast as you are predicting) then the potential FHB would be back to square one ie they would need to save another 100K to get the 10% deposit which would then be $200K.
As the poster below says, it is doable but today people without help from parents have to sacrifice absolutely everything that costs for a few years. The calc also excludes anyone with kids, anyone single not earning 100K + and anyone with existing debt. Very very tough these days.
Just bought a new $1200 coffee maker yesterday and the Mrs will be out in the garden digging holes for the avo trees come winter. Can't shake my Auckland roots. And I am glad you do not need to sell your soul to the devil by selling houses.

Up
0

If you rent in a flatting situation like my partner and I did while living in Auckland, your rent is likely closer to 17k. $280 a week for food seems very high too. It's do-able, we saved about 25k a year on below the average income level. Took 2 years to get into the market with KiwiSaver.

Up
0

NZ dirty little secret, that even IRD is chicken out to chase it - as govt & rbnz will put them in sitting position:
https://www.stuff.co.nz/business/opinion-analysis/300223000/property-in…

Up
0