Auction room activity remains busy as peak summer selling season nears end

Property

Overall sales rate of 61% at the Auckland auctions - 77% in the Bay of Plenty

3rd Apr 21, 6:21am by Greg Ninness

Real estate auction rooms in Auckland and the Bay of Plenty remain busy as the summer selling season draws to an end.

In Auckland, interest.co.nz monitored 374 residential auctions over the week of 20-26 March, up slightly from 361 the previous week and well up from 274 the week before that.

Sales rates have also been respectable, with 227 auction sales in the week of 20-26 of March, giving a sales rate of 61%, unchanged from the previous week but down slightly from the 72% achieved in the week of 6-12 March.

However it may only be a slight exaggeration to say that properties have been flying out the door at the Bay of Plenty auctions, where the sales rate was 77% in the week of 20-26 March, 87% in the week of 13-19 March and 75% in the week of 6-12 March.

March is usually the busiest month of the year for residential property sales. But unfortunately we can't make comparisons with March last year because the country was in Level 4 lockdown in the latter part of March and auction activity ground to a halt.

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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28 Comments

by bw | 3rd Apr 21, 7:53am 1617389582

I had a chat to a multi-property owner yesterday, who told me that he'd bought his last property before the new restrictions came in. Proud of himself, he was, that he'd beaten the rule changes that wouldn't catch him now.
You could see the wheels slowly turning in his head when I replied: "But it's not you they were trying to catch. It's the people who may want to buy your properties in the future"

by richard1965 | 3rd Apr 21, 8:04am 1617390255

Still waiting to act on DTI and Interest Only Loan.

What is Jacinda and Orr waiting for ...Month of February to repeat with a jump of $100000 in one month before acting or if both can spell out what is the median target that both Jacinda and Orr has set before taking action.

Real Shame for both the....(swear words not allowed but can fill in and that too the choicest that you can think off).

Auction = Evil. Time to look into it

https://www.nzherald.co.nz/nz/auckland-investment-home-buyer-says-aucti…

by Passerby | 3rd Apr 21, 9:13am 1617394385

I saw JA, GR or AO quickly drop LVR requirements, drop the OCR, bring in QE, take away many restrictions all at once when they “thought” that the property prices will go down. Just thought without any actual evidence.

The prices just rocketed to the sky. Now they want to see what impact each restrictions may or may not make, take their own sweet time, wait for months and months of data or are they buying time for themselves and their friends?

Remember these lot said there is no magic bullet and they needed a multi prong approach? Well now is the time.

March - restrictions on claiming losses
April - remove interest only loans
May - increase LVR to 40% for investors
June - deposit for property investors must be cash and not equity gained on other properties. Like you know FHB need 20% cash saved up? Just like that.
July - DTI ratio implemented for property.

Then you restore some balance to the society.
I am a property owner and I want the prices across NZ to fall.

by bw | 3rd Apr 21, 8:51am 1617393113

Most of us on here understand how ferociously 'they' are going to fight any real change to the property market here. They have too much to lose, personally, and their credibility on the subject.
A good example being:
"Helen Clark and Sir John Key weigh in on Government’s housing package....it’s a “complex issue”"
When we see that all sides of politics are really just one, we are reminded of how hard the battle for change is going to be.
https://www.tvnz.co.nz/one-news/new-zealand/helen-clark-and-sir-john-ke…

by stuart786786 | 3rd Apr 21, 9:03am 1617393806

Bw, why do you distinguish between Helen Clark, John Key or Jacinda Arden.....are they not all politicians.

A time will come and is coming when politician will be a swear word, if not already is.

by Bugger | 3rd Apr 21, 9:20am 1617394847

The thing that will change pro property politics, is when a new generation come into political power. A new political face that represents a generation that hasn’t benefited. And will not just be isolated to NZ. It’ll be wave of change. Climate change and sustainable economies will be the forefront of issues.

by Essen | 3rd Apr 21, 10:53am 1617400412

Key calls low interest rates as the fuel to the fire. I tend to agree. If we look at the “hiatus” in residential property - approx. 2017 to 2019 - based on my on the ground experience and anecdotal stories I am confident that things only started heating up again when the OCR was dropped in August 2019 (unnecessarily, IMO) and last years reductions but especially the LVR changes were napalm. I don’t think enough is said of the Reserve Bank’s role and that they knew and wanted this to happen.

by Albert2020 | 3rd Apr 21, 11:33am 1617402808

Interest rates rose over the early 2000 period when Clarke was in power and house inflation was higher than last national government

by Essen | 3rd Apr 21, 12:22pm 1617405760

At that time the key driver would have been immigration and population growth. The drivers are not always the same. I think the 2014-2015 boom was probably also insufficient supply to meet population growth from returning Kiwis + immigrants.

by taimaiakka0 | 3rd Apr 21, 12:01pm 1617404469

Agree but to protect nevative effect oflow interest rare, rbnz and vovdrnment should have immexiately stopped interest only loan which is mostly used for speculative activity.

But no action and thinking.... Playing with time as no real intent.

by alittle | 3rd Apr 21, 8:58am 1617393530

Passerby, have repeated myself that the reason Jacinda or Mr Orr is not acting on Interest Only Loan is because though it is not a silver bullet but next best measures / nearest to being a silver bullet which if stoped will stop source of cheap and easy fund to speculators for future speculation AND though as per Jacinda, this is exactly what she wants - target speculative demand BUT in reality, do not want to control speculators as it is only them who can help to support and promote FOMO - like the achievement in February ($100000 rise in Just one month).

Democracy is tilted and the only way for this bureaucrats and politicians ( new world rulers) to understand is when average Kiwi ( new world peasent) take to street and drag them out of their house and...........

by karl seastrand | 3rd Apr 21, 10:14am 1617398073

Passerby...
August, introduce new (and very high) sin tax for unoccupied homes and Air B n Bs in urban areas.
September, halt all non essential immigration (including temporary visa holders) until we have an excess of supply of housing (5 000+ houses on the rental market for 30+ days still without a tenant).
October, set up a new department in the IRD to oversee property related tax (bright line payments, tax declarations submitted by investors etc)
November, pass law requiring that all (property) sale and purchase agreements include a legal declaration that the property is not being purchased on behalf of another person or entity and if it is discovered that it was the property will be forfeited (and placed into the Govt housing system).
December, celebrate Xmas as the first time that marginalized Kiwis can enjoy the holiday feeling they have a real chance at being part of an inclusive society where they can live a reasonable type of life and know that the people of NZ have banded together to protect them from having to pay 40% of income for rent or saving a $150K deposit for a home.
January, Welcome property investors to the real world where they pay their fair share of tax, their lobby groups are not paid undue attention by politicians and where, when their actions have a destructive nature on the fabric of NZ society, such actions are strongly legislated against.

by Carlos67 | 3rd Apr 21, 12:12pm 1617405142

Yep and just when you thought prices were going to fall it turns out we are selling all our timber to China. With the cost of everything else still rising, including huge increases in freight costs due to Covid, new build prices will just keep on increasing. The next thing on the horizon is rising interest rates so again the house prices are essentially going up. I don't see an end to it. The problem has never been addressed, they kept on kicking the can down the road and this is the final result.

by karl seastrand | 3rd Apr 21, 12:41pm 1617406884

Carlos67...IMO it is all linked to income and the ability to borrow. With house price to income ratio at over 10 (in Auckland), investors finally having to pay their fair share of tax, interest rates on the rise probably next year and interest only loans on borrowed time I view the risk of a long and serious downturn as high to very high. Time will tell.

by Nzdan | 3rd Apr 21, 4:49pm 1617421765

Particularly with lending to investors. July to December 2020 there were just under 8000 investors who borrowed at higher than 70% LVR.

I assume the banks will be going through their loan books with a fine tooth comb.

by Labourvoternomore | 3rd Apr 21, 8:56am 1617393396

Passerby
I totally agree with your comments

by Bugger | 3rd Apr 21, 9:09am 1617394154

I’m starting to think interest rates are a bit to low?

by Passerby | 3rd Apr 21, 9:28am 1617395309

Totally agree, the prime reason for all this but unfortunately rise in OCR is tied to inflation. House price rise is not a factor in calculating inflation.

As I mentioned in Jenee’s article yesterday, we are living so tight and spending all our money and paying it to our mortgage like others my age. If we are not going to our local cafes, not buying clothes, not going to restaurants and not spending money on these businesses, they don’t get enough to sustain and survive and you start seeing these businesses close up, we hit recession.

The only way to stop this horrible cycle is to bring some sense of normalcy by not letting people only pour and horde money into property. Then there is money going around the economy, people prosper, inflation goes up and so does OCR.

In saying all that, there was no actual recession when they cut the OCR so I guess there doesn’t need to be an actual inflation for them to start raising it.

by Bugger | 3rd Apr 21, 10:21am 1617398499

Having the FED aka RBNZ measure inflation is a kin to the mafia writing a report on crime.

by dago | 3rd Apr 21, 9:23am 1617395016

https://www.barfoot.co.nz/auctions-live/latest-results Bruce Mason alot passed in compared to early March

by Passerby | 3rd Apr 21, 9:33am 1617395598

Hurts to see what they go for though, 53A Ruawai Road CV of 900k went for $1.5mil ($1,485,000). Very sad and very unsustainable.

by taimaiakka0 | 3rd Apr 21, 10:07am 1617397665

Sad and unsustanable for you and many FHB but for Queen and her Knights, it is a sense of achievement, fullfillment, satisfactionthat are onright track with their action or inaction.

by dago | 3rd Apr 21, 10:33am 1617399231

Agreed. I see a few that passed in are now sitting in trademe with an asking price. This sort of detail is far more interesting than broad sweeping comparisons over one year

by Bugger | 3rd Apr 21, 10:45am 1617399959

Ireland 2.0 coming to New Zealand very soon. There will be pain.

by bookworm69 | 6th Apr 21, 10:20am 1617661228

Yes, but that valuation was from 2017 and a new CV was due last year but didn't happen. So that's 4 years of house price increases.

by AJ123 | 3rd Apr 21, 10:02am 1617397347

JA and GR don't want to go price down. The rules introduced have no immediate impact so the prices are still go skyrocket.
Here is the question, National said if they come to power they will revert the laws bring by Labor & many property investors are waiting for National to come to power.
If not National or Labor can have spine to handle this crisis who do? We don't have option.

The only thing which can bring correctness to market is full blown recession or disaster. It will be horrible and you have to wait for couple of decades for it to happen.

Sorry, Average Kiwis are left with no choice, they are thrown under the bus by there selected law makers.

by taimaiakka0 | 3rd Apr 21, 12:05pm 1617404736

Agree.

So the other alternative is to pull elected people out of their home to street and set an example if pre elections promises are not acted upon.

Maybe medivale type punishment to elected represetative is the way to move in future.

by Pusheen | 5th Apr 21, 1:22am 1617542524

Both Govt & RBNZ are committed for upwards trajectory of housing price, it's very crystal clear message recently from them. NZ cannot afford to have this phantom affordability issue to become destabilise, So they must signalling to the 'market' about this.. again, phantom confidence.. relying on the 'hope'.
BUT sadly they both missed out that soon NZ will be littered with prolonged of industrial actions by those deemed essential workers, teacher, police, doctor, nurse, pharmacist, etc etc - to cope with higher cost of living. Watch this joke news, turn into real action soon:
https://www.msn.com/en-nz/news/national/thats-awkward-nurses-say-dhb-pa…