Auckland's housing market may have peaked early this year

Property

Auckland housing market may have already passed its summer peak

13th Mar 21, 6:27am by Greg Ninness

Auckland's housing market may have peaked early this year.

March is traditionally the busiest month of the year for residential property sales, but auction room activity monitored by interest.co.nz suggests the Auckland market may have peaked in February this year.

Interest.co.nz monitored 1137 residential auctions in Auckland during February, which was up 55% compared to the equivalent four week period (February 3 - March 1) of 2020.

However auction numbers have been dropping back in March.

In the first week (1-7) of March, interest.co.nz monitored 307 residential auctions in Auckland, down from 389 in the last week of February.

And the number of auctions monitored in the first week of March this year was up just 10% compared to the equivalent week of last year.

That's an indication that residential property sales numbers in Auckland may have peaked early this year.

The most likely reason for an early peak to the summer selling season would be buyers rushing to complete financing and sales arrangements before the re-introduction of loan-to-value ratio (LVR) restrictions on new mortgage lending, which took effect on March 1.

Auckland going into Level 2/3 COVID-19 restrictions in the first two weeks of March may also have affected the market.

However although the Auckland market may have peaked in February, it remains very buoyant.

Auction room activity remains ahead of last year's peak and prices are through the roof.

The auction sales rate is also higher than it was a year ago.

At the Auckland auctions monitored by interest.co.nz from 1-7 March the sales rate was 70%.

In the equivalent week of last year the sales rate was 58%.

Details of all of the 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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45 Comments

by Brock Landers | 13th Mar 21, 6:50am 1615571442

Did it peak on February 18th?

by Rex Pat | 13th Mar 21, 6:57am 1615571858

It would be good to have things slowdown. One of the difficulties in a fast moving market is changing properties. One wrong move could be expensive if you mistime the sale or purchase.

by Nifty1 | 13th Mar 21, 7:52am 1615575138

Interesting seeing articles in media recently claiming the market has 'reached the peak' and 'cooling'. Are these statements/headlines not misleading if 'prices continue to go through the roof' and 'auction activity remains very buoyant'?

by mikekirk29 | 13th Mar 21, 8:29am 1615577372

Peaked as in had max sales rate, max sales increase cf year earlier and max price increase on same comparison. Increases no longer exponential
Just as predicted!

by Nifty1 | 13th Mar 21, 8:48am 1615578482

Increases no longer exponential!? The national median house price rose $50,000 in February, Auckland median up by $100,000 for the month... https://www.interest.co.nz/property/109462/national-median-house-price-…

by printer8 | 13th Mar 21, 11:57pm 1615633020

mike, mike, mike . . .
Yesterday in reaction to startling REINZ results you were saying your Feb 18 prediction was referring to the stock market and not the housing.
You're worse than a shifting, twisting dodgey car salesman. :)

by b21 | 14th Mar 21, 8:26am 1615663582

"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."

by printer8 | 14th Mar 21, 9:43am 1615668221

b21, for second occasion, you need to lighten up

Mike makes all of these dubious claims based on pseudo-mathematical analysis and the alignment of the stars - yes the alignment of the stars - which are invariably well off the mark. So if he is going to continually post seemingly authoritive claims he needs to accept a bit of light-hearted ribbing when consistently well of the mark.
Some Mike predictions last year:
- Median price in Auckland to begin declining in March 2020 and to fall to $670k by end of 2021.
- That means approx April 18th for when housing market will freeze over.
- This will mean 25% drop in house price medians by end of 2021
- Expect 25% fewer sales in last 5 months of the year, than in 2019.
- Prices will fall 12-15% by end of 2020
- Real action (i.e. burst) will not be evident til wage subsidy phase 1 expires in mid June
- I expect that Auckland sales will be 35% below the equivalent month of 2017, until Xmas

by mikekirk29 | 15th Mar 21, 8:51am 1615751505

Yes quite true.
But you fail to mention that this is PRECISELY what the banks and economists were forecasting also.
And at time, no one disputed them.
Then came huge fiscal and monetary stimulus, which you and everyone else, could not and did not forecast.
SO please stop being so pious in your condescensions

by mikekirk29 | 15th Mar 21, 8:53am 1615751611

Planets are not stars by the way.
Where is your mathematical analysis by the way, that is so academic , compared to my "pseudo" facts?

by mikekirk29 | 15th Mar 21, 8:49am 1615751370

Pay attention Printer.
Stock market forecast to drop in October.
Housing market forecast to SLOW as in turn, from 18th February.
This morning (15th March) I see listings on RE NZ for Auckland are 1.88% ahead of 13th February.
March supposed to be a go ahead month?
Rodney listings are down 11%
Hibiscus Coast are identical to 13th February and of its 300 in top 6 suburbs, 106 of them are not yet built.
This market is already slowing.

by stuart786786 | 13th Mar 21, 7:41am 1615574504

Peaked...do you mean

Afer 20% to 40% Rise in 2020 and further 10% in just one month....it will be single digit growth each month from now on

After 1.1 median house price it will fall from here on

AND

GOVERNMENT NOW DOES NOT HAVE TO DO ANYTHING AS PROBLEM SOLVED

by Averageman | 13th Mar 21, 7:48am 1615574917

Let's be clear, banks are actually making efforts to finally inject some sanity into their lending practices. They are trying to save the deluded "leverage up interest only is risk free" crowd from themselves.

Looking forward to Govts attempt to tap the brakes next week.

by JRSNZ | 13th Mar 21, 8:03am 1615575823

This is true. Banks are refusing to lend against properties with building report issues when the borrower is high LVR. This is, of course, common sense but the property rejection rates are markedly higher in my experience.

by karl seastrand | 13th Mar 21, 9:23am 1615580581

Averageman....Banks do not give a shit about all the deluded, leveraged up investors. They are trying to save themselves. Unsure how relevant it is but Aust banking stocks have firmed since they have become more responsible in their lending. If the new bank capital requirements are extended again it will be an absolute disgrace. They really have got their moneys worth out of John Key haven't they.

by PonziKiwi | 13th Mar 21, 7:56am 1615575395

Nope

House prices can only go up or the economy collapses..

by Audaxes | 13th Mar 21, 8:10am 1615576226

We might have an example to scrutinise over coming months - London Home Prices Tumble As Return To Peak Values Five Years Away
Notably, the headline implies greater values are just over the horizon - hence onward and upward with a minor delay.

by taimaiakka0 | 13th Mar 21, 8:06am 1615575969

'The most likely reason for an early peak to the summer selling season would be buyers rushing to complete financing and sales arrangements before the re-introduction of loan-to-value ratio (LVR) restrictions on new mortgage lending, which took effect on March 1.'

Does it not imply that government gave opportunity to ramp up as much as possible before 1st March - against the very purpose that LVR was introduced in first place - your thought on it - Mr Greg Ninness

by Dale Smith | 13th Mar 21, 8:28am 1615577328

Yes, they layered another demand issue on top of the traditional yearly peak in house sales demand. This had a multiplier effect greater than the individual effects, as the numbers show.

by mikekirk29 | 13th Mar 21, 8:27am 1615577239

Interesting

by richard1965 | 13th Mar 21, 8:29am 1615577399

https://www.rnz.co.nz/news/business/438204/asb-figures-home-buyer-senti…

Everyone is talking about housing ponzi extreme except Jacinda Arden and this is the same person who was shouting from rooftop in each and every platform about the crisis to get votes - %@$&$# ( cannot swear so..)

She has totaly lost it and her face / body language reflects the same.

by Beanie | 13th Mar 21, 8:57am 1615579043

Back when she was shouting "housing crisis" she probably believed Labour could fix the problem. Now that the problem has steadily gotten worse and now is in runaway mode I imagine she will have the same emotions as the captain of the Titanic as it hit the iceberg.

Everyone knows she doesn't have the required economic skills herself to give the answer, but the situation is currently out of control and she is the boss and so needs to replace those who are not doing their job.

by PandaMonium | 13th Mar 21, 10:07am 1615583240

Well they probably didn't teach her in communications degree what to do when she is not-so-popular all of a sudden? Her solution seems to be to go into hiding, lot less interviews, no unpleasant questions from journalists. She might do Woman's Weekly from time to time. Simply she goes Joe Biden on us.
My guess is she will lay low from now on then quit her post just before next election (John Key style) and move on to her dream job in the UN.

by Rex Pat | 13th Mar 21, 11:13am 1615587221

I wouldn’t bet against that outcome.

by richard1965 | 13th Mar 21, 2:24pm 1615598689

If she does not quit herself... No worries people will show her the door.

Her downfall has started.

Imagine run by PM who has no mind of her own and depends on advice that too is fine but she should know of the advise given which one to opt and for that need leadership quality BUT her when asked - resoonse is waiting for advice... waiting till eternity.

by alittle | 13th Mar 21, 8:41am 1615578091

Auckland housing market may have already passed its summer peak

Is this some sort of a Joke..... Ater 30%,to 50% rise since Jacnda Arden and het Great Team came to power just a few months with full majority and now has she commented on the issue

Average Kiwi is more interested to know her thoughts after her mission accomplished and not about marriage venue as highlighted yesterday in media.

by Miguel | 14th Mar 21, 8:32pm 1615707134

A lot of what went on last month was a rush to get in before the LVR changes. It is just another reason it was so baffling that the RBNZ could instantly push through the removal of LVRs but they (for some reason) needed 6 months warning to remove them.

It pulled forward a lot of demand, and moved a hot market into a frenzied one. But Adrian Orr will will no doubt refuse to take any accountability for what he's done.

by Let me be Frank | 13th Mar 21, 9:29am 1615580974

https://www.stats.govt.nz/topics/property

by Pusheen | 13th Mar 21, 10:59am 1615586397

Heard that before, a silent concerning voices from the Banks camp. Reality is, when housing market is the only economic parameter in NZ that constitute 'stability' then every authoritative measures will do to maintain it's course. Any regulatory means? will be long delayed=more time=$ to be gained,.. study, committee, proposals.

by stuart786786 | 13th Mar 21, 11:13am 1615587235

As per Landlord only solution to housing crisis is Supply .....how vested bias interest result in mental paralysis

https://www.landlords.co.nz/article/976513264/housing-crisis-needs-buil…

by karl seastrand | 13th Mar 21, 11:50am 1615589408

stu... we all knew how biased Landlords Inc and One Roof are, now we can add Leonard Hong to the list of people to completely disregard. I actually read his whole twisted 58 page report when it came out. It included such garbage as because we would already have a housing shortage without any immigration, therefore immigration is not a factor and should be ignored. Really? How about if we cannot build enough houses for kiwis without factoring immigration then to allow mass migration to magnify the problem would be foolhardy. People like Leonard Hong (Landlords Inc and One Roof) and the way they twists things are a huge part of the problem.

by kiwikeith | 13th Mar 21, 4:43pm 1615606985

Yeah that was a shocker. A guy with a name like Hong saying mass immigration is not the root of the housing crisis.

by Malarkey | 13th Mar 21, 4:48pm 1615607330

But is it? How many non-immigrants do you know who aren't all in on residential property investment? Take out the immigrant section and you'll find NZ houses are still laughably over-valued, since anyone who can get a mortgage is buying without regard for price:value. Because, as everyone knows, you can't lose with property, and therefore no price is too high. Mate.

by kiwikeith | 14th Mar 21, 2:09pm 1615684171

Ok well tell the 500 thousand net migrants that have entered NZ over the last decade that there has been an administrative mistake - their right to remain in NZ has been cancelled and they have to return to their home countries. You would find houses selling for less than 100k in Auckland under that scenario.

by Malarkey | 14th Mar 21, 3:04pm 1615687462

Or you would find a bunch of ecstatic non-immigrant Kiwis celebrating this wonderful new opportunity to borrow millions for more houses, because houses aren't ever overpriced, since you can't lose with houses.

by karl seastrand | 14th Mar 21, 7:43pm 1615704205

KK..I presume you are joking. I have stressed before that I believe we need to treat any NZer that already has PR or citizenship as equals. However, with the temporary visa holders on the pathway to residency I believe we should send almost all of them polite dear John letters telling them that we have had no option but to alter our immigration regulations due to situational changes and politely advise them that a pathway to residency for them no longer exists.

by kiwikeith | 15th Mar 21, 9:28am 1615753707

Of course I am not seriously suggesting we tell people who have been granted citizenship to go home. It was just an extreme illustration for those who refuse to accept that the current housing crisis has been caused by successive mass immigration policies.

by Rosenstein | 13th Mar 21, 11:31am 1615588304

What? A Peak? Does Orr know? Cut the OCR! Now! No wait and see, no commissions, no investigations. Just do it. We're only half way up Olympus. I want to taste the ambrosia.

by AJ123 | 13th Mar 21, 3:24pm 1615602283

Greg is 110% right, you people are not reading article carefully. He said Quote "passed its summer peak", winter peak is coming soon. And yes Labour know media management (by floating these articles) so that people feel relieved.
Whatever is purchased at 1mil will never be sold again at 800K. Next median price in AKL will be 1.5mil and it will be there before JA leave (2023) "HAPPY BIDDING".

by Malarkey | 13th Mar 21, 4:44pm 1615607065

Most NZ politicians own residential investment property. Politicians aren't known for putting country ahead of themselves. Nothing will change until either:

1) Politicians divest themselves of their property portfolios;
2) NZ's property-based economy finally begins to implode;
3) both those things.

by Independent_Observer | 14th Mar 21, 8:45am 1615664753

Perhaps politicians should be forced to live in government residences, sell their homes and put their assets in blind trusts (all of them). Knowing that they need to buy a house at the end of their political term might actually see them set wise policy around the housing market - instead this weak self interested stance (both JK and now JA).

Same for all RBNZ staff.

by Malarkey | 14th Mar 21, 3:05pm 1615687536

Good idea. Won't ever happen. Even Helen Clarke owned something like 14 houses.

by John2 | 13th Mar 21, 10:47pm 1615628827

Does anyone one how many are on deferred mortgage defaults ?

by John2 | 13th Mar 21, 10:45pm 1615628713

by Pusheen | 14th Mar 21, 3:08pm 1615687712

Interesting stats here, as where to all the stimulus went to in NZ:
https://www.stuff.co.nz/business/opinion-analysis/300251702/where-did-t…