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Activity has remained firm in real estate auction rooms over winter but it could be tested in the next few weeks

Activity has remained firm in real estate auction rooms over winter but it could be tested in the next few weeks

Residential auction activity remained firm at the beginning of July, with sales achieved on two thirds of the properties that were offered at the auction's monitored by interest.co.nz.

In the week of July 3-9, interest.co.nz monitored the auction of 270 residential properties and sales were achieved on 177 of them, giving an overall sales rate of 66%.

That suggests the market remains significantly more buoyant than it was at the same time last year, when the number of properties being taken to auction was at a similar level to this year but less than half (46%) were selling on the day.

Last week's two thirds sales rate was no fluke.

In the previous week (26 June - 2 July) the sales rate was almost three quarters (73%) and it has now been above 60% for five consecutive weeks.

The last time it was below 60% was the week of 29 May - 4 June, when it was 56%.

However the next few weeks may be a bit more testing for the market, with activity often being quieter during school holiday periods.

And in the last few days most of the major banks have started raising their fixed term mortgage rates, with the Reserve Bank widely expected to start raising the OCR as soon as August.

The auction rooms may provide an early indication of how the market reacts to these changes.

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

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30 Comments

Market is very strong and hiuse prices are touching and firming at all time high.

As long as government and rbnz decides in favour of housing ponzi, nothing can be done to control it.

Like John Key earlier who said that housing crisis is a good crisis, Jacinda Arden too has confirmed her support to ponzi by giving personal assurance that under her house ponzi will not stop.

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The market is extremely exposed to interest rate hikes and far from able to provide what it is meant to do, which is a means of accommodation for the country's population, so I would argue it is an extremely weak market yet a very good platform for speculation based on the current tax system.

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Interest rate hike from very very low rates by 0.25% will not have much impact.

Despiite media hype do not think that rbnz will raise rates next month though should start as have to start comming out of emergency mode but will Mr Orr.... have doubts.

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We're in for a soft-landing - much akin to the previous soft-landing of 2017/18.

People will fight hard to hold their property assets in the face of rising interest rates. A tight labour market (near full-employment) is on their side.

NZ's profile on the world stage continues to rise - for the best of reasons. We're a shining star. Property has excellent long-term prospects.

Enjoy the weekend!

TTP

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As long as the property assets don't start becoming void of tenants as "fully employed" first home buyers continue to enter the market, coupled with a lack of migration to fill the void and record home building taking place.

Will we have a glut of empty new builds, or will these new builds be purchased by FHB resulting in a glut of rental properties?

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> NZ's profile on the world stage continues to rise - for the best of reasons.

I have trouble understanding why. We have the highest rate of youth suicide in the OECD, highest rate of homelessness in the OECD. Bloomberg rates our property market as the bubbliest in the world. Our marketing weasels sell ourselves to the world as clean and green yet we, 0.06% of the worlds population emit 0.3% of the total GHG.

What exactly makes us a shining star?

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"What exactly makes us a shining star?"

Certainly not you, Lowercase Capitalist, or your terminally pessimistic DGM mates.

TTP

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Is pointing out the very real issues in this country doom and gloom now? How are we going to fix anything if we just pretend New Zealand is all sunshine and roses.

Not sure you needed to make your reply personal.

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As a card carrying DGM I'm pretty well versed in what doesn't.

Once again, what exactly makes us a shining star?

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See my post above, Lowercase Capitalist.

TTP

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Is there going to be panic from the public that we've perhaps hit the peak and a flood of properties come to the market spring/summer? What are property investors thinking with the interest deductibility changes & higher interest rates kicking in? Is the squeeze going to force some to sell? Stock has been so low, keeping an eye on this.

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To me it's all about the longer term. Like most investments if you leave it there for a number of years it generally grows in value.

I believe this government will make it harder and harder for investors. Good time to buy before any additional restrictions come in without much notice.

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Nifty
“What are property investors thinking”?
While posters are critical of Tony Alexander, his seperate surveys of investors and REA indicate that there is not a flood of investors unloading and low level of listings tend to support that.
Yes, there were a number of investors claiming they were out at the time of the Government’s 23 March announcements, however a shift in responses over the months since indicate that is likely to have been a spit the dummy reaction.
At the time I posted I didn’t see investors unloading - those who have bought over the last few years would be considering the brightline test cost and those who have had rentals for sometime would be looking at current good returns on initial investment and lack of current alternatives.
No doubt there will be some investors rationalising their portfolio given the changes and that the signs of the property party with considerable capital gains are over - which is a normal investment strategy and is supported by both investors and REA survey comments.

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Printer8
I'm sure alot of investors haven't felt the squeeze yet. Increasing rates will be the start & then after a chat with the accountant they'll find they're not getting a return after tax deductibility rules kick in. If property prices stall or drop what will they do?

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As TTP states above, they will "fight hard" for what is rightly theirs.

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Agreed. Will take a rates increase back to long term average for speculators to sweat which will take years unless there is a massive global shock. Something like a lot of the debt in play needing to be written off.

Yield will become more important than it is now. In that time more supply is coming at a rush while immigration remains at squat. Investors will hold on thinking every step backwards on paper unrealised capital gain is the end of the world.

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This will change demography of NZ, people with 2 or more kids (teens), with one or no property should start thinking of leaving NZ.
As you don't want them (kids) to be buried under big mortgages or delayed them to start their family, with no great opportunities around & average lifestyle with huge inflation in compare to your neighbor (Aus).
What Cindy & stubborn/incompetent governor has done to country is irreversible.

The damage done in one year can sometimes take ten or twenty years to repair. Chinua Achebe

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Houses prices are the similar to NZ if you want to live in places where there's work or good job.

https://www.news.com.au/finance/real-estate/selling/ugly-duckling-cotta…

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Jaw boning the housing market is akin to playing with fire. Of course banks doesn't really care about economy wide crash. History taught them the government will bail them out, and with the recent policy change, depositors money will the safety fund for a bail in.

House values are relative. Instead of being bogged by the idea house prices are increasing in a manner out of pace, they should consider if it was their earning power that's lagging behind or that the instrument for that transaction (ie. money) is depreciating.

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Indeed. We the customer will bail out the banks with out hard earned deposits before the government gets involved. Our bail in rules are absolutely clear on that point. This explains it quite well. https://youtu.be/y5Y1ukHbtjQ

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If Orr doesn't move OCR up before selling season kicks in, does that mean supporting the housing market is more important than the economy and average consumer?

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I think Orr will be forced to closely follow Fed rates to avoid a surging NZD (hurting exports) or capital flight. Housing market and consumers will have to take their chances based on what goes on in the US.
Everything is so geared now it barely matters what the NZ Govt thinks or wants.

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As a term depositor, Tim Depositor reveals his biases!

TTP

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I fail to understand, are there really so many people in this country who do not have a house and need a house? And how many of them can afford the million dollar houses? Every new build in Auckland or Waikato is in the million dollar range.
I can't think why people would want to go under high debt? Is it for profits later? Will there be profits for all? Where will the money come from?

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House prices won't crash unless you raise the interest rates dramatically, from currently 2.5% to 8-10%. That is the only way to smash the market back down and force house owners to sell (who are currently holding on big mortgages).

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