National auction sales rate dipped to just over a quarter last week

Property / news

Sales rates at the latest auctions ranged from zero in Waikato to 51% in Canterbury

24th May 22, 10:12am by Greg Ninness

More properties were offered at auction last week but the overall sales rate declined to just over a quarter.

Interest.co.nz monitored 258 residential auctions around New Zealand last week (14-20 May), up from 182 the previous week.

Of those, 69 properties were sold under the hammer, giving an overall sales rate of 27%. That was down from 31% the previous week.

Apart from Central Otago-Lakes, where auction numbers were extremely low, Canterbury remains the most buoyant market for auctions, with the sales rate there just squeaking past the halfway mark at 51%.

Leaving aside Southland where just one auction was monitored, the lowest sales rate last week was in the Waikato where none of the properties auctioned sold under the hammer.

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.

The comment stream on this story is now closed.

You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.

We welcome your comments below. If you are not already registered, please register to comment

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. Our current comment policy is here.

72 Comments

by Dgm | 24th May 22, 10:17am 1653344270

Buyers are finally realizing that houses are overpriced.. now it's a matter of time that vendors realise that their so called gold mine, is in fact just copper

by Brock Landers | 24th May 22, 10:30am 1653345017

Greatest fools gold.

by Carlos67 | 24th May 22, 10:38am 1653345505

Not really, the problem is sellers think the market is still on the upward trajectory and asking prices are just to high. People are still asking outside the estimated price and this needs to change and change is a bit slow. As prices fall across the board, sellers will not be in a panic to sell into the "same market" . As a seller you are always just looking at what the next house will cost you, you are not so concerned about the actual cost, just the "relative difference" in cost for you to move. Houses form part of a chain in the sales process, if the person in part of the chain drops the price it ripples down and other sellers can afford to drop as well.

by FCM | 24th May 22, 12:17pm 1653351479

Totally agree, if you already in the market you either upgrading or downgrading it's all about relative difference, and if upgrading the current interest rate you need to pay for the larger difference, if too much stay put. There are also people with equity behind them waiting for a correction in the market, its not just FHB waiting. Ones that will get burnt are where you taken on too much debt where circumstances force the hand to sell. Also others that maybe are forced to sell(divorce).

by JRSNZ | 24th May 22, 12:23pm 1653351811

I heard of one Waikato auction last week where there was a 20% difference between the top bid and the reserve.

by DTRH | 24th May 22, 4:48pm 1653367688

Once a bubble pop’s nothing will stop the spiral down, all indicators point to downward pressure on house prices, rates raising inflation high huge amount of people over leveraged and paid way too much for property this housing crash will probably be the biggest in modern history as huge disparity between wages and cost of property. (12 x average wage couples income in Auckland for average 3 bedroom house ).

by Averageman | 24th May 22, 10:36am 1653345378

The hype train of endless cheap debt has derailed. Took a call yesterday from an agent who was shocked that I would suggest half the asking price, or the same price as 2015-2016 value. They then spent time trying to justify last years numbers with "it will be worth it in the long term". Points for trying I guess.

They also confirmed they appear to have run out of buyers...

by Carlos67 | 24th May 22, 10:46am 1653346011

Yeah but your also probably one of the twits out there that still wouldn't buy it if they offered it to you at half the price. New Zealand's national sport is professional tire kicking. FYI they are not interested in ANY verbal offers unless you also are prepared to put it on paper, it gets rid of the tire kickers.

by Averageman | 24th May 22, 11:20am 1653348035

Actually I would buy. The doubling since 2015-2016 has been due to the FEDs policy of printing and spraying USD everywhere, and idiot behavior by the RBNZ in NZ. Price discovery has already started in the Stock Exchange bubble and their property markets, and is highlighting how disconnected prices were from important points like "income". It had become speculative gambling. NZ housing is no different as the gambling instrument of choice in NZ.

Weaning off drugs is difficult, and weaning off the huge debt binge that everyone has been on will be just as difficult.

by tothepoint | 24th May 22, 10:41am 1653345701

"They also confirmed they appear to have run out of buyers..."

That's a very average comment, Averageman.

As we all know, in the next upswing agents will confirm that they have run out of sellers.

TTP

by Fitzgerald | 24th May 22, 11:02am 1653346929

Upswing? In the Twenty Thirties, Probably.

by Averageman | 24th May 22, 11:46am 1653349585

TTP, who can buy right now...very few. The banks have the handbrake on and Stagflation of adding to the pressure (rising costs and stagnant wages). Those that can will save a lot by being patient. One wouldn't want to be carrying business overheads predicated on regular RE sales volume at the moment.

"Come to think about it, his name was... it was you, Damn"

by Idoubtit | 24th May 22, 10:58am 1653346730

I can see that you will never make the commitment to buy a house!

by Averageman | 24th May 22, 11:01am 1653346911

Oh woe....I already own several. Note the word own, not speculate.

by Fitzgerald | 24th May 22, 11:06am 1653347186

I love it how Averageman talks about making a lowball offer, and in the space of 5 minutes gets called:

- a twit

- a tyrekicker

- someone who dosen't understand sales processes

- someone who will never own a home.

This is so typical of Kiwi attitudes to property. Anyone who owns it is seen as a "winner", a "go getter", "successful". Any hint that someone might not own property, and they are seen as a loser.

Bahahahahahaha.

by Von Metternich | 24th May 22, 11:07am 1653347273

The Real Estate Spruiker FEARS the low ball offer. How can his vendors possibly make three years salary at once with million dollar shoeboxes?

by Independent_Observer | 24th May 22, 11:08am 1653347328

Yes was thinking the same thing.....owning property makes you a superior human being to people that don't own property.

And many can't fathom that you own property and yet can see the market falling substantially and also think that might be a good thing as it improves the social and financial stability of the country.

by RickStrauss | 24th May 22, 3:33pm 1653363221

It's so very 18th-19th century, isn't it? Would-be landed gentry.

by tuisbest | 24th May 22, 11:15am 1653347757

What a hoot! I love it.

by Averageman | 24th May 22, 11:29am 1653348565

Indeed, recommend they save their typing for someone who actually gives a bleep about their clearly very one side point of view. Simply we disagree. I was being serious at 50% off list. It was not a lowball, it was a realityball. Will be less when they call back.

by Market Interest | 24th May 22, 12:10pm 1653351024

I think a lowball offer is reasonable. They don't have to accept it. If they're in dire straits and need bailing out, then you're the saviour of the day. If not, and they can wait, no harm, no foul.

My thinking is that if you genuinely believe that property is going to take a hammering then you'd be wanting to get ahead of the curve - i.e. offering where you think the prices will be down the road a bit. That may very well be perceived as lowball *now* but could be considered realistic by that calculus.

by donny11 | 24th May 22, 12:35pm 1653352539

On top of that sellers always try and maximise what they can sell a property for. Why can't buyers minimise what they pay for it. This is only fair is it not?

by Carlos67 | 24th May 22, 6:10pm 1653372626

When someone on here says they own "several houses" why would I believe that ? I mean I spend all my spare time running to the nearest phone box to put my cape on.

by Crazy Horse | 24th May 22, 10:38am 1653345480

I wonder how many RE bulls out there, have diversified into other assets or streams of income ?

by Independent_Observer | 24th May 22, 10:50am 1653346250

Diversification for RE bulls means buying rentals in different suburbs.

by JustAnOpinion | 24th May 22, 12:28pm 1653352106

There is no asset class doing well, diversify into what?

by General Comment | 24th May 22, 1:07pm 1653354462

Classic vehicles seem to be doing alright at the moment, although I suspect that bubble will let go shortly too as stock is starting to sit longer. Soon enough people might even have to (horror of horrors) get out and enjoy that '60s-'00s sports car/GT in its intended manner and environment.

by lucenera | 24th May 22, 1:14pm 1653354855

well... many commodities are doing superwell.

some short financial instruments are also very good, right now.

you can go crypto, given you know what to do you can make good money with liquidity pools, and dual investments allow to play in both market directions.

sure... none of those is "protected by the govt"

by DTRH | 24th May 22, 7:06pm 1653375973

The crash in everything, house crash is like slow motion because of logistics but will get happen here especially as is NZ,s biggest game.

by Von Metternich | 24th May 22, 10:39am 1653345582

So would it be worth offering extreme low balls for properties as a test of these people? 2015-2016 prices maybe?

by Idoubtit | 24th May 22, 11:00am 1653346802

I think you will be wasting everybodies time, including your own.

by Independent_Observer | 24th May 22, 11:06am 1653347183

Not unless they find another buyer with a higher offer. This is what happened in the US as the bubble burst over there. Eventually people needed to sell as the moved for jobs, or sold an investment property as it was losing money. But for many who were buying another home it didn't matter much as the house they were buying was 30-50% cheaper as well....so no net loss. (of course the investors lost out...but they took too much risk....)

by donny11 | 24th May 22, 12:33pm 1653352408

Yes something is worth what someone else will pay for it. If you need to sell and the only offer is from someone who doesn't really need to buy. Expect that only offer to be well below your expectations.

by refactornz | 24th May 22, 3:50pm 1653364202

..people needed to sell as the moved for jobs...

If you're going to take a $200k - $500k loss just to change jobs then you'd better be a rather high earner to make it worthwhile.

by WestieAJ | 24th May 22, 4:01pm 1653364875

Because the housing market tanked. So did the employment market. They were not changing jobs and moving. They were moving to get a job somewhere else and not be destitute. They had no recourse mortgages remember.

by Independent_Observer | 24th May 22, 4:43pm 1653367409

Not sure where you get the $200-500K loss from....

If you sell your house in a market that has dropped....you get less for your house but then the house you buy has dropped by the same amount....nothing lost...nothing gained...

by Waikatohome | 24th May 22, 11:23am 1653348196

Who is to say whether an offer is low ball or not? You offer what the house is worth to you, if they can find a higher offer or don’t need to sell they don’t have to take it. I have always negotiated on houses, that’s why I won’t buy through an auction. Don’t get emotionally attached to one property and show that you are prepared to walk away. You many be surprised how much you can take off their original price expectation. You do need some facts to justify your offer. (Current market, condition of property etc). It also helps if you are a hassle free cash buyer and don’t need to sell a property yourself.

by Nzdan | 24th May 22, 11:32am 1653348768

Helps if you know the vendor's background story. We bought our first home in 2017 from a "distressed" landlord, they had bought the property for their daughter and partner to rent but the relationship fell through. They had a nightmare tenant in place (only allowing viewings on Tuesday mornings) and just wanted a quick sale.

They gave us a figure, we counter-offered with a "low ball" (loan was ready to draw down) and they accepted. Roughly 5% higher than what they paid for it in 2007.

by Averageman | 24th May 22, 11:45am 1653349530

Whats to lose...other than grossly overpaying for an asset to the point that it becomes a millstone...?

by Millennial_Woman | 24th May 22, 10:41am 1653345690

Would this be a good time to start diving down Real Estate sales fees? There are a lot of agents and not many sales, oversupply could drive down prices for their services?

by tothepoint | 24th May 22, 10:45am 1653345917

It's always a good time to drive down agents' fees.

Or better still, sell your house yourself - save a bundle of money 💰 and avoid the hassle of dealing with agents altogether. 😁

TTP

by Averageman | 24th May 22, 11:01am 1653346868

Indeed. Having sold a number of times myself its easy. Do some prep documentation, flyers etc, get a list of recent sales data, list an add, run a couple of open homes, dutch auction the interest parties, and sign the buyer up on the contract you get from your lawyer while ensuring a decent deposit.

by DTRH | 24th May 22, 10:48am 1653346100

Another day with news of housing market tumble. Still people expecting over a million for simply 3 bedroom house in Auckland you cannot blame them for trying as some people are just not informed that prices are falling.

by malamah | 24th May 22, 11:15am 1653347732

When people tune in to mainstream media and the pitch is a ~8% increase YoY and the market is "cooling", you definitely cannot blame them for not knowing. Though the information is available to those who look for it, the "always goes up" mentality is blinding.

by Jesse1 | 24th May 22, 11:30am 1653348609

One of the biggest things I've learnt over the last couple of years is around the idea of news and events being "Priced in". I've realised that very large parts of the market (stocks & property) just aren't paying attention and many aren't even capable of understanding the situation.

by Jesse1 | 24th May 22, 11:24am 1653348264

Yeah I'm starting to tune out as it's going to be the same storey over and over again for years while this plays out. Property investors were painfully entitled on the way up and it's going to be painful watching their stages of grief on the way down while they try to justify the situation.

by Averageman | 24th May 22, 11:30am 1653348639

Popcorn is good, and not just for watching movies.

by tuisbest | 24th May 22, 11:44am 1653349444

It's only starting and I'm so over all those entitled, crocodile tears already.

P.S.: I do feel for first home buyers who got trapped in this mess, though. They deserved better. They've been failed badly by the government and their elders and there is no light in the tunnel for them yet: https://www.macrobusiness.com.au/2022/05/ardern-hurls-first-home-buyers-into-collapsing-new-zealand-housing-market/

by JustAnOpinion | 24th May 22, 12:32pm 1653352340

Honestly lol, the jealousy in these posts is something else.

New investors are going to get a beating, old investors (such as myself) won't blink an eyelid.

by RickStrauss | 24th May 22, 5:00pm 1653368447

Doesn't look like jealousy so much as contempt for the character that has been on show in the fleecing of the younger generations for our own enrichment, via policy.

by russellj | 24th May 22, 12:41pm 1653352895

first home buyers are not “trapped in this mess” unless they have to sell. Otherwise they sit tight, pay the mortgage (hopefully fixed for at least 3-4 years) and are still better off than renting.

by CourtJester | 24th May 22, 2:43pm 1653360214

first home buyers are not “trapped in this mess” unless they have to sell.

Incorrect. They're trapped with a giant mortgage.

hopefully fixed for at least 3-4 years

Reality is that most have it fixed for 12 months.

still better off than renting

Incorrect again. Assuming 20% deposit and recent purchase (within past 3 years), interest payments are well above the rent of an equivalent home. Add rates, insurance and maintenance and owning is suddenly 30-50% more expensive than renting.

by malamah | 24th May 22, 3:43pm 1653363819

They are potentially quite literally trapped in. Purchasing a home in the peak, losing equity by the day, increased servicing costs every ~7weeks. If we see the 15-20% bank prediction, many will be trapped by the end of the year and unable to move. It's easy to say they'll be ok in the long term, however the next 5 years could be a real struggle financially, and limiting in terms of lifestyle. Remembering that it's common to think you need a house before you have children, you need ~160k before you have a house, you need an extraordinary income before you can save $160k. There is surely a good portion of people out there just waiting to have a family and follow the rule book who've been caught in a national lie. It's an unfortunate outcome.

Should people wait 15-20 working years before they start a family? Biology says not the best idea, NZ housing market says yes!

by Yvil | 24th May 22, 3:58pm 1653364695

Tuibest, and how do you feel about FHB who bought two years ago and made a killing?

by WestieAJ | 24th May 22, 4:03pm 1653365028

A killing on paper is not the same as money in the bank.

by tuisbest | 24th May 22, 4:59pm 1653368353

Did they make their killing by flipping within 2 years of buying and then renting afterwards (as opposed to sinking their gains into an overpriced level-up property)? If so, good on them. Not sure many FHBs who bought in the past 2 years fall in this category, though.

by mfd | 24th May 22, 4:19pm 1653365955

I think we've had this discussion before, but they haven't made a killing. They still have the same house and the same mortgage and generally no ability to turn this into an improved lifestyle (other than the ability to take on more debt). The rise in house prices hasn't actually benefitted them.

It is only an illusion of getting ahead, caused by their peers falling further behind. Nothing to celebrate for those with empathy.

by JohnfromtheTron | 24th May 22, 11:32am 1653348744

Can't read much into the Waikato numbers especially if the results are from Bayleys. They are not a big player in the market especially in Hamilton. You would need to look at Lodge or Harcourts if you want a clearer picture.

by WestieAJ | 24th May 22, 11:36am 1653348991

Do B&T charge any fees to the vendor if an auction is not successful?

by Market Interest | 24th May 22, 11:59am 1653350396

You pay up front, before the auction, for the auctioneer and marketing. Even when cancelling an auction you're not likely to see your money back.

by JustAnOpinion | 24th May 22, 12:33pm 1653352415

A nice little earner. Never sold my properties by auction, that's for the noobz.

by IT GUY | 24th May 22, 7:53pm 1653378798

i got 3.25mil for a shitehole nov 22..... auctions work in the right market

by Yvil | 24th May 22, 12:24pm 1653351841

Headline is a bit misleading when there is 67% in Central Otago and 100% in Coromandel

by capture1 | 24th May 22, 1:18pm 1653355081

Mainstream media still feeding BS to the public.

https://www.rnz.co.nz/news/business/467675/outright-collapse-unlikely-d…

by Independent_Observer | 24th May 22, 1:31pm 1653355897

Not sure if you read any of the media reports on the Irish property market when it first started its decline, it was pretty much the same deal. Not saying we're about to do an Ireland....but it shows that listening to what the media are reporting is a complete waste of time.

by capture1 | 24th May 22, 2:09pm 1653358183

Agreed, I have been doing some research on the Ireland events.

I think a lot of people are missing the home price to income ratio. Either kiwi's get paid more or house prices come down to a sustainable income to house ratio. I know what I'm betting on..

by Independent_Observer | 24th May 22, 2:35pm 1653359703

Yes any asset is ultimately valued relative to the cash flows that it generates. We've managed to pump up asset prices by dropping interest rates, which allowed future cash flows to be discounted at a smaller denominator (P = CF / r).

If real cash flows (i.e. earnings eroded by inflation) then also get discounted by higher interest rates, it is realistic to see asset price falls.

by chebbo | 24th May 22, 5:29pm 1653370158

There's a site (quite old now) which collected quotes from just before the Irish bubble burst. Some quite notable parallels with here:

https://quotesfromthebubble.blogspot.com

by IT GUY | 24th May 22, 7:58pm 1653379088

"With house prices down 42% from their peak in 2006, it looks like the property market may finally have bottomed out, according to the Irish Auctioneers and Valuers Institute (IAVI).

by IT GUY | 24th May 22, 8:00pm 1653379242

I may be a riverside buyer at 40% off in Turangi..... Deadline sales are dead..... Discounts coming up

by malamah | 24th May 22, 3:51pm 1653364304

It will be interesting to see the spin they put on these articles when all regions are heading in the same direction. Still a lot of turbulence in the market as sentiment shifts. There seems to be a 15 - 20% disparity in gains/losses across the regions, once that settles into the new, we'll see what the stats say, not the spruikers.

by IT GUY | 24th May 22, 8:03pm 1653379406

Spruikers gonna Spruik!