A chill wind blew through the auction rooms last week, with the overall sales rate dropping to 29%

Property / news

More properties being passed in at the Canterbury auctions, suggesting the cooling market is now nationwide

26th Apr 22, 11:35am by Greg Ninness

Residential auction activity declined significantly at the latest auctions, with interest.co.nz monitoring just 206 auctions last week (16-22 April), down from 331 the previous week.

The auction sales rate also slipped back, with 59 properties selling under the hammer, giving an overall sales rate of 29%, down from 32% the previous week.

Probably the most significant change was the slide in the overall sales rate at the Canterbury auctions, which slipped under 50%, down from 59% the previous week.

Canterbury has had some of the most buoyant auction activity in the country for some time, and the fact that more properties were passed in than were sold under the hammer last week, suggests that the cooling in auction activity that began in Auckland has now spread nationwide.

Although the percentage of auction sales was high in some provincial centres last week, their total auction numbers were probably too low to draw meaningful conclusions form the results.

However, last week was a short week wedged between two long weekends, so a downturn in auction activity should not have come as a surprise.

Even so, the overall sales rate of 29% last week, with less than a quarter of the properties selling under the hammer in the major markets of Auckland, Waikato and Bay of Plenty, suggests the market could be hunkering down for a long winter.

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.

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55 Comments

by JJS | 26th Apr 22, 11:51am 1650930667

Why the fascination with auction? I sold my last two places via tender / deadline sale and was very happy with the results.

First place we walked up the unconditional person to the same price level as the best conditional one - in an auction the conditional wouldn't have been able to bid and there wouldn't be any competition for the cash buyer.

Second place an unconditional offer was the top money, and miles ahead of the next best offer. Again, assuming the second highest bidder put their best offer forward, we would have only got one bid more than this offer rather than significantly more as per the tender

by Averageman | 26th Apr 22, 11:59am 1650931185

Agreed. Auction has it's place but with the current market dynamics, now is not that time. But hay...keep paying your marketing and auction fees in the futile hope that the market will role back to Nov 2021. Good luck with that...

by Carlos67 | 26th Apr 22, 12:35pm 1650933358

It all depends on the market doesn't it. Now is not the time to sell by auction, in fact now is not the time to sell at all by the looks of things. Loved the Auction myself as a buyer when your cashed up, it cuts out all the conditional buyers and cuts out all the crap of negotiation and you just smash it if you really want the place.

by Justa comment | 26th Apr 22, 1:02pm 1650934945

Auctions are great in a rising market, last year with the FOMO and a rush of blood, many paid an extra 100k to get the property, which was a great result fot the sellers. Now we are in a buyers market with 5% mortgage rates coming, auctions will be fine for those who want to find the highest they can get and sell and move on quickly, eg off to Oz. But those expecting to get the bonus 100k achieved up to dec 2021 are badly misjudging where the market is going this year.

by ikimpaul | 26th Apr 22, 3:43pm 1650944622

I think you will find a lot of tenders aren't working at the moment. Looking at the Wellington and Hutt Valley Regions which typically have only used deadline sales and tenders - there are very few selling at tender and instead are listing with a price or by negotiation when the tender closes - which means either they got

1. No bids (I am hearing this is becoming common)

2. Bids but the prices were lower than they wanted or the conditions were adverse

Your getting the same results as Auction just not paying the auctioners fees.

In a buyers market where FOPTM and a large number of houses have listed prices most people wont want to make an offer (and risk paying too much) instead they will wait until the property has a price on it and/or look at a property that has a price.

P.S : for those waiting for my Weekly Hutt valley update- probably tomorrow/ maybe Thursday - I'm still compiling the data - particularly this weeks rentals

by blobbles | 26th Apr 22, 11:50am 1650930626

The markets that aren't suffering are getting smaller and smaller. First it was OK that Auckland was suffering because Chch was OK. Now Chch is suffering, maybe Marlborough is still OK... so everything is still rosy?

by Gummy Bear Hero | 26th Apr 22, 1:48pm 1650937724

... still rosy in Daftfield ... and Kirwee ... peachy ... nothing to see here , move along ... great gutters in our towns , justincase investors' blood starts flowing in the streets ...

by WestieAJ | 26th Apr 22, 12:25pm 1650932742

Well over 1000 new dwellings completed in Auckland every month. Population of Auckland is stagnant. Credit availability is tightening and interest rates are rising. But along my route to work every week another old house on 600 SQM is knocked over or dragged off to be replaced by 4-5 townhouses with 1 mil + price tags. Who is going to pay $1000 per week rent or (mortgage + rates + insurance ect ) to live in these houses?

by HouseMouse | 26th Apr 22, 1:01pm 1650934890

What will be interesting to see from here is how many of those sections where the house has been demolished or removed will be redeveloped. I expect quite a few will soon became weed infested and undeveloped.

I also expect to see some half built developments stopping dead in their tracks.

by WestieAJ | 26th Apr 22, 1:34pm 1650936871

I would love to know more about the economics of these small scale developers. One of the finance companies had these highlights from Nov 2021.

Our Builder Loans product, by contrast, offer the best of both worlds: Our interest rate (currently at 6.5% p.a.)We charge a flat-rate establishment fee of 2.49% for a 12-month term, and no line fees. We don’t require professional QS reports. Nor do you need presales. We do require clients to have a minimum of two years’ relevant development experience and to be able to demonstrate previous project success. Your project is based in Auckland and for sale when completed. Maximum development units: 10 (single houses or terraced houses).Maximum amount borrowed: NZ$5m.Maximum LVR: 75%.

For a 5 million loan you will pay them a fee of 124K plus interest of 325000 for the year. So what could you build for 6.25m all in? How much profit would you expect to make?

by Kjeldorian | 26th Apr 22, 3:49pm 1650944996

If the government had any brains they would offer to buy the half built developments at cost and keep the builders / sub contractors on.

Government gets cheap housing, construction sector maintains employment. Developers still get some punishment for over leveraging.

by Dgm | 26th Apr 22, 12:31pm 1650933089

Wait till the chilly storm hits in a couple of months..

by wozmad | 26th Apr 22, 12:31pm 1650933111

33,335 Houses for sale nationwide, Trademe only have it at 32,000+, Why not 33,000+ is the question?

by donny11 | 26th Apr 22, 12:37pm 1650933478

No conspiracy. This is a system issue. The same issue happened around 2010. I remember.

by Averageman | 26th Apr 22, 12:46pm 1650933987

Yes. It shows the same limit on cars for sale as well. Move on.

by General Comment | 26th Apr 22, 2:44pm 1650941077

32,767 limit on a 16-bit integer value. Everyone would be even more confused by that, so TM show 32,000+.

by Nzdan | 26th Apr 22, 3:59pm 1650945599

Probably their SQL row fetch limit setting.

by MLSmith1 | 26th Apr 22, 1:10pm 1650935459

Party is over for the greezies...

by EpsomArtsandCrafts | 26th Apr 22, 1:17pm 1650935845

Yep looks like Auckland's unsustainable gains are unsustainable

by andrew6 | 26th Apr 22, 1:18pm 1650935900

This is no more a news as the slide will continue for months to come if not years.

by Chris-M | 26th Apr 22, 10:38pm 1650969484

As an example here is how the Japanese house bubble market grew and burst.

https://japanpropertycentral.com/2019/09/new-apartment-prices-in-japan-…

On this basis I would not even consider buying a house for 4 years. If I was young I would quit NZ for at least that long and then review the NZ and my own situation.

by andrew6 | 26th Apr 22, 1:47pm 1650937622

Agree that central bank should not be afraid of pain and do what is required as pain is unavoidable, the sooner one gets over with it the better for evrryone.

https://www.cnbc.com/2022/04/25/man-group-central-banks-to-put-rates-in…

by waymad | 26th Apr 22, 1:53pm 1650938012

Interesting sequence at Ocean Ridge, just south of Kaikoura. There is a 20' container facing the road with section price signage. 'Prices from...':

April 21 $225k

Nov 21 $275k

Feb 22 $325k

April 22 $345k

by Averageman | 26th Apr 22, 2:43pm 1650940996

Ohhh..."Queenstown by the Sea" is clearly a marketing puff.

by msp | 26th Apr 22, 8:52pm 1650963131

Bayleys have a 3000m2 section for 265k, maybe the cheap ones have all gone....

by HouseMouse | 26th Apr 22, 2:23pm 1650939820

I'll let people in on something. Once the fall from peak in Auckland gets to at least 15% (assuming it does, the HPI is getting close to 10% down), I'm going to write a REALLY strong letter to the NZ Herald having a go at them about OneRoof and the one-sided, unbalanced and frankly irresponsible spruikerism they have featured there over the last few years. Especially care of messrs Church and Alexander.

Probably won't achieve anything other than make me feel very good. But hey, I'll take that.

I wonder if I could complain to some sort of journalism tribunal?

by HouseMouse | 26th Apr 22, 2:25pm 1650939918

Even today they have some dude Rupert Gough opining that there won’t be significant house price falls, only flatness for a few years…

by tulips | 26th Apr 22, 2:36pm 1650940593

A mortgage advisor who profits from people borrowing more.

It's no different to a real estate agent calling themselves an economist and making predictions.

by Justa comment | 26th Apr 22, 2:55pm 1650941744

They have some dodgy practices on that site, anything that sells low gives selling price as TBC, and sits there for over 12 months. Yes definitely spruiker behaviour.

by DDDDebt | 26th Apr 22, 3:29pm 1650943758

https://www.researchgate.net/publication/263725836_The_Role_of_the_Medi…

HM - You should read this - it's fairly heavy, so at least read the conclusion

In short, the irish media was way too vested in the property market (ad revenues etc) and also held stakes in property websites... and so basically ran no stories on the bubble.

NZ will be written about in the same way in a few years when everyone is looking for answers why this bubble was allowed to happen

by chebbo | 26th Apr 22, 3:35pm 1650944147

Indeed. Once you understand that the role of media is not to inform, but to manipulate opinion, the world starts to make so much more sense.

The seminal work on this is probably the 1988 book "Manufacturing Consent" by Edward S. Herman and Noam Chomsky, however the 1992 film of the same name is probably more accessible to most, and well worth a watch.

by IT GUY | 26th Apr 22, 9:27pm 1650965251

i liked that one but find Noam a bit heavy, prefer Adam Curtis if you are in to 3 hour mystery tours of old black and white footage from Soviet block time, intertwined with kids dancing in Kabul under us leadership..... Bitter lake is good tho for historical understanding of the petro dollar.... man energy is always about power and war. i think food/water may be about the same soon

by HouseMouse | 26th Apr 22, 10:12pm 1650967922

Great piece. Eerily familiar.

by HouseMouse | 26th Apr 22, 9:45pm 1650966306

Media Council of NZ. Principles include fairness and balance. Is it fair and balanced to only have pro- property bulls writing on One Roof, or actually across the whole Herald website?

https://www.mediacouncil.org.nz/principles/

by Nifty1 | 26th Apr 22, 9:49pm 1650966594

You could argue that Alexander and Church have been giving financial advice in their articles... are they qualified to do this? Where are their disclosures...

by HouseMouse | 26th Apr 22, 10:02pm 1650967362

Good point.

might look into the process of raising a complaint with the Media Council.

by DTRH | 26th Apr 22, 3:59pm 1650945577

A lot of people and speculators made huge amounts of money from housing over last few years, now the market is one way down people who purchased will be left paying mortgages for years as they watch their deposit disappear and are left in negative equity. With average wage earners not having any chance of buying in Auckland the market has to find solid base so could fall 50% too 60% as this is where average wage earners can afford.

by hootenany | 27th Apr 22, 7:15am 1651000550

Unfortunately that has to happen, if it doesn't next time there will no incentive for people to think twice about overpaying for a house.

by ex agent | 26th Apr 22, 4:33pm 1650947625

Yes the party is truly over except for the very top properties as the people who are buying them have the cash and ability to borrow if need be. Simply put all of New Zealand is simply stunned. All our daily living costs have gone up so much. Food, insurances, car running costs, interest rates. Everything and they will continue to do so. How some people are surviving or will survive is a worry. Anyone who thinks house values will go up again is simply fooling themselves. Covid, Ukraine, China and supply issues will need to disappear first.

by DTRH | 26th Apr 22, 5:11pm 1650949865

Crime rate is climbing if people can’t pay for basics rent food bills power, then society breaks down people go around too other areas and steal cars and from houses shops if government doesn’t help people have somewhere to live which is affordable more people on streets living in cars.Ask yourself if you had nowhere to live and children hungry what would you do.

by HouseMouse | 26th Apr 22, 5:56pm 1650952609

I don't know if other people are noticing this, or if it's just my imagination, but aggro behavior seems on the rise to me.

by Nifty1 | 26th Apr 22, 6:29pm 1650954541

Dont know what the f%%$ you're talking about HM

by HouseMouse | 26th Apr 22, 7:11pm 1650957073

Haha

by msp | 26th Apr 22, 9:05pm 1650963911

nah HM, I'm daily impressed by how pleasant and kind the vast majority of people are...polarised maybe...rich poor, vax anti, vegan carnivore, moko no moko...our sense of homogeneity has eroded as the media (and lots of it) seems obsessed with the differences...and financial policy has driven great wedges between those who can access finance and those who cant...pushing some up and lots down...

we have a remarkably caring majority...

by HouseMouse | 26th Apr 22, 9:36pm 1650965803

Probably true overall, but I am coming across more and more homelessness, abusive language, and threatening body language in commercial centres ie. Auckland CBD, Manukau city centre.

It feels like the fringes are getting more aggro, at least to me.

by Nifty1 | 26th Apr 22, 9:40pm 1650966039

People are definitely more aggressive, reality is setting in for many. None of the kindness bs anymore...

by HouseMouse | 26th Apr 22, 10:05pm 1650967515

Yeah. The lovely thing about the first lockdown was that I think people were genuinely kinder and more empathetic, overall.

But that certainly wore off.

by HouseMouse | 26th Apr 22, 10:10pm 1650967826

I really do feel a strong vibe that the economy and society is on the edge. That in 6 months things will be quite ugly.

but I am just a DGM, so what do I know.

by Leelabella | 27th Apr 22, 10:58pm 1651057098

Yes, and then the RBNZ dropped LVR’s for investors, and any sense that this country was a team of 5 million was blown to smithereens, and the greatest wealth transfer ever seen in NZ history began.

Well at least one of the catalysts surely. And one of the greatest demonstrations of idiocy or corruption I’m not sure which levelled at NZ society.

by Baywatch | 27th Apr 22, 4:49am 1650991771

Hangry...have you noticed how quick too judge you get when hungry?

by IT GUY | 26th Apr 22, 9:17pm 1650964640

Shit gets Serious NOW!

by Toye | 26th Apr 22, 9:20pm 1650964854

8% clearance today on Barfoot.

Ship is sinking quickly.

by IT GUY | 26th Apr 22, 9:30pm 1650965452

Is it time to step UP into the liferaft? or go down with the ship Jacinda?

by Baywatch | 27th Apr 22, 4:50am 1650991858

Captn Luxon to the rescue..oh wait he was on the first lifeboat with the women and children (first class passengers of course)

by streetwise | 28th Apr 22, 11:24am 1651101847

That means properties sold have dropped from dropped from 28% last week to 29% this week.....quite a drop %#?!