Residential property auctions had an overall success rate of 40% in the first half of February but there were big regional variations.
Interest.co.nz monitored almost 600 residential property auctions over the two weeks from January 31 to February 13, at locations from Lumsden in the Deep South to Cable Bay in the Far North.
Auction activity continues to be dominated by the Auckland market, which accounted for more than half of the auctions monitored.
That's not only because Auckland is the country's largest real estate market, but also because selling by auction has traditionally been more prevalent in Auckland than in many other parts of the country.
However while the Auckland auction rooms were busy and getting busier, that wasn't matched by the number of properties selling under the hammer and the overall sales rate at the Auckland auctions monitored by interest.co.nz in the first two weeks of February was just 30%.
Only properties in the Waikato had a lower auction sales rate at 29%.
The market appeared to be most buoyant in Canterbury where the overall auction sales rate was 67%.
Sales rates in other regions where auction numbers were sufficiently high to give meaningful data were Bay of Plenty 55%, Central Otago/Lakes 53% and Northland 52%.
The overall sales rate for all of New Zealand excluding Auckland was 57%.
However even in areas where the sales rate is above 50% that is generally down from where it was during the buying frenzy prevalent in parts of the market for much of last year. So it will be interesting to see how those sales rates hold up over the next few weeks.
You can see the results for all of the individual properties offered at auctions monitored by interest.co.nz on our Residential Auction Results page.
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116 Comments
The auction rates are low but people are still paying big bucks for the properties.
Seems like people have a lot of money they want to spend and invest in immovable asset. This defies all logic.
May be we need more resources looking into money laundering side of it. I see so many examples of money laundering in housing market all around. I guess we need better surveillance but can't expect that from this government of hugs and showman/woman ship. ( Netflix government)
Performative caring.
Agree that prices are still holding though slightly soft. Vndors are still getting lower end of their expectation ( which is also too high) compare to higher end ( which is a premium on top of premium).
Besides many listing in January have been on high appraisal by real estate agent that too makes a difference as vendors had agreed to sell at premium and will be a while before house price gives way.
If the market stabilize, which is only possible if RBNZ and Government intervene, which they may as Jacinda has been very vocal that she does not want house price growth to stop but if left to fundamental than will give way and if this process of fall continues over a period of time, will see meaningful fall in future, matching the auction success rate.
Affordability : Can judge from below.
A million dollar house ( which is minimum in most part of NZ) with 20% deposit will need to borrow $800000. On maximum 30 years, earlier when interest rate was 3% or below, mortage was appox $775 per week and now when it is appox 4.5% is appox $935 per week and if it touches 5% or above will be $1000 per week and on top of that one has to pay appox $100 per week for insurance and rates.
Even if a family buys and pay $900 To $1100 per week, will struggle not for luxury but other necessity and will have to compromise for years to come.
AND
God forbids if interest rates touches 6% ............( Confident that interest rates will never touch 6% to avoid disaster unless outside forces forces Mr Orr and Jacinda to act but than will have to throw lollies to retain power).
While I agree with what you've said about affordability, it's interesting to see you and lots of commenters here on interest are putting hopes on Mr Orr and Jacinda to save down trend housing market by limiting interest rates within certain range. The level of trust that you put in Orr and Jacinda is remarkable. But the world has changed and is still changing, it's not the same as before, try to keep the old way of thinking or doing things, we will eventually be left behind.
This is not hope but know from their past track record - their action and their words reflects their intent to support and promote.
In NZ, politicians of all breed has created a beast that cannot be touched.
So is not hope but knowing our Politicians.
"their action and their words reflects their intent to support and promote" I wouldn't say that based on their previous actions. Their interest rate deductibility tax reform and changes to brightline test are clearly not supporting housing price to go up. However, Jacinda did say that she would like to see housing price increase small amount each year. To me, their intention is not to support house price but is to actually control housing price. We all know what will happen if the government and central bank want to control the market, do we?
Half baked policies ...
"We all know what will happen if the government and central bank want to control the market, do we?"
If you believe that Government and central bank do not control and manipulate, you are mistaken.
Not everywhere- I monitor the hutt valley system - most houses are selling well below their QV valuations - 100K-200K underneath in many cases- as a result the valuations given in Dec have dropped between 20-30K in Feb.
Corelogic, QV and REINZ data all show that the Hutt valley market prices peaked in Nov and have been falling ever since.
That said with 13 weeks SOH currently on the market - 554 properties currently for sale (the most since 2009) - hutt valley buyers have plenty of choice at every price point and as a result its rapidly becoming a buyers market.
Always appreciate your Hutt valley update, ikimpaul.
Wellington city is sitting on 820 listings, which is well above average from my observations. It'll be interesting to see whether this holds into Winter.
thanks Northman - I'm not sure what Wellington listings peaked at in 2009. Hutt Valley had a peak of 700 listings in early 2010.
that said Wellington city has averaged around 650 listings in the last 4 years with lows of 400 early 2021 and mid 2020 - so they are roughly 30% up on the long term average.
Wait for sometime as the property contagion from mainland is about to reach here. I could be wrong but one of the reason for current slowdown here is the downturn in their market. Lot of things are unraveling there and it might take few more months for its full impact to be visible here.
Fear of keeping the money in the bank to be inflated away is a much more straightforward and plausible explanation than the imaginary money laundering ...
Ummm... I'm sure you're aware that when there's no house price growth, your money in the house is also being inflated away.
Exactly. But I guess most people have no conception that house prices might fall, let alone stall.
Because the narrative has been a one way street
HM
"I guess most people have no conception that house prices might fall"
Those people that have owned property a little longer than the two years than you have understand that.
I have previously posted I purchased an investment property in 2006 to see the RV fall below what I paid for it in 2009. However, I received the same rent and in 2016 sold it for considerable capital gain. Falls in house prices were widely understood both in the GFC and in Auckland in 2017.
What people such as you have no conception of is that property whether a home or investment is long term . . . short or even medium term fluctuations are irrelevant. If a home, go outside and look, it is the same home; if a rental same rental income.
The concept that you can't get your head around is the same as KiwiSaver growth funds . . . . it is about long term and short term fluctuations are irrelevant as 2020 proved to many.
We were talking about whether property is a good hedge right NOW (ie. Contemplating buying now rather than leaving money in the bank) against inflation. Obviously, in the past it has been.
Assuming intense inflation is with us for only the next couple of years, and assuming house prices fall or perhaps are flat/ only slightly rising, then a house purchase NOW is not necessarily a good hedge against inflation is it?
And if inflation is more severe and longer lasting than I think it will be, then interest rates are likely to be higher, and for longer, which in all likelihood means house price gains will be minimal or any.
Your turn.
You make a few pretty serious assumptions here , notably "Assuming intense inflation is with us for only the next couple of years..".
I am not convinced on that particular one ; I see a lot desire ( even enthusiasm perhaps ..) for ongoing inflation on political level.
Yes it is an assumption and that's why I stated so.
A number of economists think this is an inflationary blip in an otherwise deflationary bigger picture.
So, let's assume it's not, and that serious inflation is around for quite a few years...all things being equal, interest rates will be high won't they? And therefore all things being equal housing demand will be more subdued and therefore house price inflation as well.
You do realise that the last time we had serious inflation in NZ, back in the '70s, that *real* house prices went backwards quite a lot?
I do not claim to have a crystal ball but the scenario I consider to be fairly likely is a long period of financial repression ( nominal interest rates may go high .. does not mean real interest rates will ).
60s and 70s were quite a different time economically ; does not mean it cannot repeat of course .
I still don't buy, at all, buying property now as being a good hedge against inflation.
If inflation is going to be as bad as you suggest it might be, and last as long as you suggest it might, perhaps term deposits will become more attractive again. Obviously still not great at all in real terms.
Or, here's a novel idea...perhaps people could live a bit more within their means and become a little less obsessed with growing wealth?
"
If inflation is going to be as bad as you suggest it might be, and last as long as you suggest it might, perhaps term deposits will become more attractive again. Obviously still not great at all in real terms.
"
No . I specifically said "negative real interest rates"
"
Or, here's a novel idea...perhaps people could live a bit more within their means and become a little less obsessed with growing wealth?
"
I like the idea very much - but I think we both know it is not going to happen.
Maybe it will *have* to happen...
Me? I don't see the reality, at all, of lots of people *being able to* jump in to (or *wanting* to) investing in property if mortgage rates are 6-8% or more (that's what they will need to be in your scenario of high and long lasting inflation), prices remain sky high, yields are miserable etc etc.
No one wins with high and prolonged inflation, and no investment class - including property - does, that's for sure.
Living within your means is how you grow wealth - nothing builds up if there's no surplus.
if inflation goes at the current level for say 3-4 years, grocery shopping is going to become very unaffordable for a lot of people. It already is...
Current inflation levels for extended time would be a major.
Liar.
Burn him.
You are correct in the sense that there is no investment completely safe from inflation . Many think that cash is the least safe place ; I tend to agree.
Time will tell.
NGK
"May be we need more resources looking into money laundering side of it. I see so many examples of money laundering in housing market all around. I guess we need better surveillance . . . "
What evidence do you see of money laundering? You seem unaware of reporting requirements of banks, real estate companies, and lawyers who face considerable penalties if they facilitate property transactions involving money laundering . . let alone some oversight by Inland Revenue of property transactions.
So, please detail the so many examples of money laundering that you can confirm which the lawyers, bank staff and real estate agents involved in facilitating the buying and selling of properties involved seemingly can't see.
To me, yet again is seemingly you shooting your mouth off with no basis from one who has seemingly no experience in buying and selling property.
He has no evidence ; it is just that his theory of the universe does not match the observed facts ; therefore he needs to invent "ether".
Don't bother asking a question to NGK, he never answers.
couples with average salary, immigrants from foreign country. First home for the value of 1.4mn new home. Built buy a immigrant builder / developer. Yeah nothing wrong there. Right.
This is a social open forum. Privacy comes first smart folks. Yvil, the smartest
NGK
Stop digging that hole deeper for yourself.
The lawyer, bank and, if involved, the real estate agent are each going to have to account for where the money comes from and any hint of money laundering is required to be reported.
In buying a home or investment property, the bank and lawyer usually require you to complete a document with a significant number of pages regarding source of funds.
And please do not assume that migrants are poor - try looking at the capital required for a business migrant seeking a visa.
Not sure if my emotions are too laugh or too feel pity. You certainly are too young to be on forum to understand how things really work.
You are Probably one of this social media generation with read and believe but no practical knowledge. Never know how banks work with money or what estate agents have to report or what does a lawyer do. One simple hint to you. They are all paid by the vendor and have vested interests. They have loop holes and laws to protect them if get implicated. Or they can happily pay the fine if caught because they made enough money anyway.
Only independent will be the government auditers if there are enough.
You are so naive.
Hence I do not like to reply.
So now you say practical experience is good but just the other day you made fun of me when I said it's good to listen to people with experience...
I see by your own admission you are too weak to reply to any questions
"
couples with average salary, immigrants from foreign country. First home for the value of 1.4mn new home. Built buy a immigrant builder / developer. Yeah nothing wrong there. Right.
"
So what exactly is wrong here in your view ?
( *other than your resentment of their getting ahead of you financially ).
Lots of laughs. It's not resentment.
Its the logic. Which bank gives mortgage of 1.4mn to an average wage earning couple.
And if they put more than 60% of their own savings into it, then where did that come from and whether that did come into the country really?
I do pity this generation of social media. Talk heavy but no logic.
You know it's a lot better to first look at data and then to come to a conclusion, rather than having a pre-conceived idea and then make things up to try to justify your made-up belief.
Kid
Seems pretty good really. Still a lot of confidence in property. Probably because it's a great hedge against inflation and waiting rarely works out.
I have been thinking about selling my sister's unit which I own. She has some health problems and has been staying with me over Covid and looks like she could be staying with me permanently. The unit has now been unoccupied for over two years. I have been slowly doing it up (progress has been slow because I am cash poor with only super and a modest share portfolio to keep me going and I have been renovating myself where possible.)
Now my headache is that if I sell would I want to stick the proceeds in my ANZ bank. What with ANZ recently abruptly rocketing up their deposit interest rates (not a good sign in my book) and ANZ Australia not doing nearly as well as ASBs and BNZs respective parent's banks in Australia, I am thinking it may be safer sitting on an empty home unit than putting the proceeds of a sale in a bank; that is any bank. Having just renovated the property with a minimum of expense and a lot of hard work I wouldn't rent it out because I had a rented out house trashed years ago and I know from others how little wear and tear and minor damage it takes for a rented house to pay for itself. In the last couple of weeks or so we have seen real data that shows property is on a downward trajectory which will mean houses will have to be in pristine condition to sell at all, let alone at a lower price.
I figure that now things will soon be back to normal regarding house prices, and thus no fast-buck capital gain, and tenants having the main power in the letting contract, I would not be wanting to rent out a property unless the rent was over $1000 a week to cover all wear and tear and accidental damage. It would not be worth the hassle.
It's a hard one. I am keeping my properties for as long as possible as I regret selling one back in 2017. Cash in the bank is no fun. Shares are less fun.
However if I needed money for quality of life I would sell.
Be sure to let the insurance company know your place is empty and you are renovating.
Yes that's why I insure with AA. I switched to them years ago when I was renovating the townhouse I live in. I was with State but they would only insure the property for 6-months if not occupied, nor would any other insurer I approached. I'm a slow renovator...it took me 9 months.
The only extra condition AA applied was a doubling of the excess (it's $1000 for a burglary) and deadbolts on the main doors and padbolts on the inside of ranch-sliders.
I found out something about property investment in recent years I wish I had known about when young and green. If you are too scared, too unknowledgeable, too busy, or just too lazy to handle aspects of property investment, then pay someone else to do those bits. You will still do far better than those who don't invest in property!
That's right, OPM & OPT, it's never too late to lean though
You will still do far better than those who don't invest in property.
Not buying it.
IMHO you'd have to be mad to keep a property empty for any length of time in this market. Even if prices go nowhere the real value is currently falling by around 6% p.a. due to inflation, throw in rising interest rates and a 50% gain could quite easily become a 33% loss for a round trip nil return.
A cooling off in the housing market is timely and has been fully anticipated.
But there'll be a gradual venting of pressure as we move into a buyers market - culminating in a soft-landing.
First-home buyers will continue to seek a home.
Investors will continue ranking housing as an investment of choice - quite possibly the best longer term investment……
The cycle will repeat.
TTP
What's your definition of a soft landing? House price drops of up to 5%?
Repeat what cycle, another doubling of price in 4-7 years?
Price to income levels around a factor of 20?
I'm happy to consider that I need more BEAR in me. But I'm genuinely interested in where this money/debt will come from.
Ie :
- We all double our income in the next 7 years (Not happening)
- We take on more household debt? as % of GPD (already high)
- Banks lower rates and go full stimulus for another 5 years?
- the money in the system already is enough to keep pumping prices further?
Genuine questions... Personally I'm nicely hedged both ways.
Along with lower sales rate did anyone notice the lower quality of paper and printouts recently being provided during open homes? It seems that industry has noticed the change on the ground and have started saving money on their end. Even the numbers of photographs sometimes are insufficient and there are no measurements on the floor plan. Not sure why the vendors haven't picked it up and are still opting for Auctions.
Humans have tendency to fall for nice words and promises made to them of greater gains. The greed is one of the basic instincts of human nature. To have more to feel happy and satisfied.
We try to accumulate more and more during our life time and not think about spending it but when we realize we have enough and should spend, then its too late because the path to grave is closer at that time.
Hot money is coming out of Auckland and into other regions and that includes your nearest town.
The regions has a lot of catch up to do in prices relative to Auckland- work from home will be the future protocol for those who are not bound on site.
The first 2 weeks of February are usually the time where vendors and buyers re-calibrate their prices for the new year- we are now past that. What will be the selling price will not under-deviate far from the vendors' reserve along the average volume; however, the same cannot be said so on the upside- there's still room for upward valuation.
Serious buyers will have to make up their minds quick as the momentum builds into March; opportunities are only real for the prepared minds,
Be quick!
Every month the prices drop there is even more room.
Be quick to offload.
Dreams are free.
🤡🤡
People can't afford Auckland, they're out...if they can get out.
If people can't afford Auckland or Wellington, then Palmerston North is a positive choice. There are some magnificent homes, particularly in the leafy suburb of Hokowhitu, where the rich live.
Palmy is the city of opportunity: plenty of education/employment opportunities, great community facilities and relaxed lifestyle.
BUT here's the big drawcard........ with Transmission Gully likely to open in just a few more decades, the road trip to Wellington will become significantly quicker.
TTP
Ahh yes. Palmerston North. Population 88,700. House prices on par with Brisbane. Some very good cow tipping to be had.
This is satire right?
First Palmy is just another completely average medium sized NZ town with little to offer anyone under 40. And secondly, a faster road trip to Wellington, a completely average large NZ city. What a selling point.
NZ really does love itself too much.
Despite its bad rep, Palmy’s a growing town I heard. It has distribution centres for Foodstuffs & Countdown that cover the lower North Island. KiwiRail is building its regional hub there. It has army/air force bases nearby. Plenty of farming going as well. One of the largest scientific research hubs & Massey University are there as well. it probably has reasonably good employment opportunities for young people. And a million dollar buys you a nice house with a sizable yard in Palmy.
Too much price fixing down in Palmerston North, I've heard it said.
opportunities are only real for the prepared minds
...who happen to have a spare million dollars (or two) just lying around
Some regions most defiantly have room to still increase. Tauranga is one example where the services like Fibre Broadband make it possible to work from home like your just another suburb of Auckland.
Isn't Tauranga Boomer HQ? I'll pass.
Yes its somewhat full of successful boomers and Gen X like myself who got the hell out of Auckland for the better weather, space to breathe from the traffic and put a few toys in the garage. I guess if your not in that category your gonna hate it down here, the constant roar of Harley Davidsons can be a bit much for for the poor Millennials sensitive ears.
Hey. Hey. Us Millennials grew up with 90s music. We can handle obnoxious sounds.
Though I wonder if us millennials would be able to handle the sounds of Boomers complaining that their Korma is too spicy.
Love a good hot Indian curry but cannot find a really good Indian restaurant down here. Had one for a while and then it went downhill fast. Got a decent Thai sorted but not an Indian. If anyone has a current recommendation I'm all ears.
The India in Tuakau is amazing but you would have to come to Waikato.
Good job trying to sound condescending without knowing the difference between your and you're. Better luck next time.
You're an idiot ? Fixed it for you. I see at least five spelling or grammar mistakes on here every day, not worth commenting on bro.
When I have been in Hamilton by the Sea the traffic has been pretty damn bad.
Imagine you're an IT worker on your computer with the beach view right in front of you.
Even San Francisco couldn't match the value for you get in Tauranga- for the same price you'll only get a low end apartment over there at best.
Or just remote from Australia and live somewhere with a beach right in front of you.
Sharks and jellyfishes love those who are into bytes.
No beaches is better than unswimmable waters.
Meanwhile in Tauranga...
https://www.nzherald.co.nz/nz/fatal-waihi-beach-shark-attack-victim-nam…
That's Waihi not Papamoa, still its just as bad in Auckland your getting shredded by the property sharks.
Papamoa or Waihi makes no difference to a hungry shark. Plenty of well-aged meat floating around.
Only fools go swimming near the Auckland property sharks. The water is much better on the Gold Coast.
Why are you still here saying the same thing for 2 years?
Perhaps you mean it'll better if the whole NZ move to Aussie and you can have the whole country exclusively to yourself.
Would you pay any attention to the answer?
He can love it for the first 18 months (and no doubt bore everyone shitless with how so many things are better there, such a good choice, I'm a genius etc) then gradually get disenchanted, go on interest.com.au and moan how their government is even more buggered than ours.
Dreams are free.
I think you would generally get a higher class , more wholesome person in Papamoa.
Way ahead of you on that one...
San Fran has energy, culture, diversity and action.
Tauranga lacks all.of those things. Really boring place.
But each to their own.
Having been to San Francisco a few times now. I don't think I could be paid to live there. Some pretty awful social issues on the streets. Everywhere.
Still, between that and Tauranga... 🤔
Yes I have been there a few times and yes that is true, their homeless issues make Auckland's look trivial...
Ah yes, the dilemma facing every remote worker: Tauranga or San Francisco.
Easy choice: Tauranga
(If you're fully remote and those are the only two options. Why? You'll save an extra $50-$100K per year.)
https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=New+Z…
If you could go anywhere, then Buenos Aires would be a good choice. Half the costs again and a lot more fun.
Tauranga is great if you like sitting in Traffic. It can take a couple of hours to get from Welcome Bay to Mt Maunganui on a bad day. Or you could live in Papamoa stuck between a Tsunami and State Highway 2. I think I will stay in the lovely Waikato and enjoy our wild west coast.
If you don't work you can avoid the rush hour but at least down here it is still only a "rush hour". Auckland no longer has a rush hour, the motorways are stuffed now all day long and even in the weekends it was as bad if not worse than the week days. Waikato too far away from the beach for me and it has several other issues you notice on a drive through.
Each to their own. I've not noticed many issues on my drives, perhaps it is because I am travelling so quickly with the absence of Traffic! I'm 20 mins from West Coast beaches and about an hour from Firth of Thames. There is better value to be had outside the major cities. We have wireless broadband from a local company and it is fast enough for all our work and home needs.
850/500 UFB here in rural Hawkes Bay. Working from my home office looking out over the paddocks, 27.4 degrees and sunshine. Beach not too far away. Ain't life sweet.
Maraetotara?
Bit north of there, but not too far off.
My region is awfully defiant.
I watched the Bayleys Havelock North auctions last week. Five properties on offer, 3 of them lifestyle/rural, which all outperformed price guides. One house in Havelock North passed in despite the money on offer being very good for the location, while the last house (in the Havelock North dress circle) passed in without a bid. So could have been 80% success if the Havelock North vendor hadn't been greedy.
Meanwhile in Napier, the only property offered sold, but for only $50K above its April 2021 selling price. From the photos it doesn't look like anything was done to the property in the interim, so the vendor probably got out even.
Auctions aren't a big thing in Hawkes Bay, but I'll be watching the next round on 25/02 with interest, as there's at least 4 "motivated" vendors. From what I'm seeing lifestyle properties are still very sought after, while urban properties may have peaked. too early to say for sure though.
@CWBW Man ! .......what's in that Koolaid you are drinking ? ....I can imagine you at a BBQ, where you talk so much crap, there is a huge queue at the bathroom of people that have had to excuse themselves to get away !
You got it the other way round- I don't go to BBQs.
Those who are interested in making money comes to me.
And yes, there's a queue.
Good one ! Ya got me .....you are a master of the written arts :)
"And yes, there's a queue."
Is it a far queue?
He doesn't come out of his basement and the only visitors are paid to be there.
He he. That was funny:-). Sitting outside in the TAURANGA sun working. Life's good.
Yeah just been outside doing a bit of work in the garden, nice down here for sure. Slight haze out to as far as you can see to the Kaimai ranges. Bit hot out there back inside for a bit of a laugh.
I plan to be bidding on the auction for this Kohimarama property next week, budget of about $4.5M
Any insightful wisdom out there?
https://www.trademe.co.nz/a/property/residential/sale/listing/345587513…
Very nice house but you certainly pay through the nose for the postal address. Make a list of pro's and con's. Top of my list was two neighbours only, privacy and an expansive view which is pretty hard to get in the burbs. Doesn't stack up for me but I don't have 4.5 Million to spend anyway but still managed to find my dream home in the $800's.
Buy an equivalent place in coastal Queensland for around 1.5M then spend the leftover 3.0M on a lifetime of hookers and blow. :p
Good value in Queensland but I'm almost 50 now, too many ties in Auckland, family, friends, business etc. holidays in Queensland are enough
Nice enough by the looks. However..
Too far from the beach though in my opinion, not a 'quick' walk.
Not even a single garage? Come on.
For 4.5 million? A definite pass.
Much prefer something out Coatesville for that price. Far more bang for buck.
Good luck with the auction brother.
Well spotted, with 283sq/m you kind of assumed it had at least a double garage. Is that so you can leave the Ferrari in the driveway to show off to the neighbours all day long ? Its kind of an area that's a bit on the pretentious side. I would be wanting a quad garage and a fully air conditioned Gym for that price.
Yeah we live much closer to the beach now but pool and full section is what you pay for, room to put in a double/triple garage
Cheers
Fair. If you have the coin for that house I'm sure you can put in a garage.
Sorry if I came across negative, I was assuming you were looking for negative points which you may not have thought about. Positives are pretty obvious!
I live about 3km away from that property. It’s too far away from the water to be worth 4.5m
Its a beautiful home and if you think it’s worth that money, that’s the only thing that matters. Good luck at the auction. You might get a discount. (You’ll notice I never said bargain)
Property Price website says its been loaded onto Trade Me at $5m. The agent will have listed it at that to get some interest, and from what I've seen lately with auctions the reserves tend to be higher than the TM loading price. As such expect reserve to be north of $5m...
Nice area though - great for families, and a proper sized plot. The only thing I don't like about Kohi and St Heliers is how much you have to back track to get on SH1.
Interesting video - the lawns certainly need some irrigation and the agent fronting it looks like Magda off There's Something About Mary.
Yes it might go north of $5M but not by me
I expect the reserve will be early $4's, the owners live overseas and have another home in Auckland so are selling at top of the market.
Lawns are all very green now and much nicer to live nearer the beach than the motorway
The more significant issue for property owners or buyers (both home and investors) is not any likely fall in property prices, but rather a most likely increase in mortgage interest rates for those that hold mortgages.
Property is long term; short term fluctuations in the market are irrelevant. It is likely that there is going to be some fall in house prices (both RBNZ and banks expect this); however, for home owners it will be the same home and for investors, past experiences indicates that rents are not adversely affected.
However the ability to service an increase in mortgage rates (both RBNZ and banks expect this) - and increasing loss of tax deductibility of interest for investors - have immediate implications. Banks have always applied a stress test for borrowers and it is not surprising that they have tightened up on lending in recent months . . . and stress testing and the ability to service the mortgage doesn't mean that it will not involve considerable belt tightening.
I have experienced three periods of falls in house prices . . . and each meant little but significant rises in interest rates my early years were problematic and involved considerable belt tightening.
I posted late 2020 that the then current rate of house price increases were unsustainable due to increasing affordability issues. What has surprised me is that these increases continued unabated during 2021 despite tightening of LVRs and, for investors, loss of tax deductibility.
How are potential FHB going to be affected over the next year or two? Yes, there is likely to be some fall in prices (and the glee of many posters is very apparent) but unfortunately the conundrum for FHB is that increasing mortgage interest rates in the short to medium term is likely to negate this.
Great post P8, the cashflow issues (higher interest rates) are indeed more important than a drop in value
I don't have any expectation that price falls will really help FHBs much at all, unless they are in the order of at least 15-20%.
However, I hope there is a correction for the sake of teaching all the greedy bastards in this country a bit of a lesson.
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