A very slow start to the year for Barfoot & Thompson as sales volumes & prices tumble

Property / news

Barfoot & Thompson's median selling price down $240,000 from its November 2021 peak

2nd Feb 23, 10:38am by Greg Ninness

Auckland's property market appears to have made a disastrous start to 2023 with the region's largest real estate agency reporting an extremely low volume of sales and tumbling prices.

Barfoot & Thompson sold just 431 residential properties last month, down 46% compared to January 2021, and the lowest number since May 2020 when severe Covid restrictions brought the market to a virtual halt.

Barfoot & Thompson Managing Director Peter Thompson said last month was was one of the slowest the company has experienced in the last 20 years.

"January is invariably the lowest sales month of the year but this one stands out for its lack of buyer commitment," he said.

Prices also took a tumble with the agency's median selling price in January falling to exactly $1 million, down $67,500 (-6.3%) compared to December last year.

That means Barfoot & Thompson's median selling price has now fallen by $240,000 (-19.4%) since it peaked at $1,240,000 in November 2021.

If the median price falls any further it will drop below the $1 million mark for the first time since January 2021.

The figures suggest buyers still have plenty of properties to choose from, allowing them to take their time and giving them the upper hand in negotiations with vendors.

At the end of January Barfoots had 4747 residential properties available for sale, up 24% compared to January last year and the highest number for the month of January in more than 10 years.

That was in spite of new listings in January running 18.9% below where they were in January last year.

"Buyers continued to sit on the sidelines in January, presumably either waiting for prices to fall even more, are cautious about mortgage interest rates or are finding obtaining finance too challenging," Peter Thompson said.

"The rural and lifestyle markets experienced the same trading challenges as urban areas during January, with vendors and buyers having different views on value," he said.

The comment stream on this article is now closed.

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127 Comments

by ex socialist | 2nd Feb 23, 10:53am 1675288417

Looks like the lowest January since records in 2001. That is a wake-up for Auckland, and it is hard to see prices not falling a further 10%.

by HouseMouse | 2nd Feb 23, 11:00am 1675288834

Yep, taking the total fall from peak to circa 30%.

ouch

by IT GUY | 2nd Feb 23, 11:04am 1675289066

Guaranteed?

by HouseMouse | 2nd Feb 23, 11:05am 1675289118

Nah, just quite likely

by Te Kooti | 2nd Feb 23, 11:56am 1675292174

It has rained the entire month which will have had a huge impact. Have a friend trying to list a house and they have not been able to get the drone up to take photos.

by IT GUY | 2nd Feb 23, 12:10pm 1675293032

And now the photos show they are lakefront, going to be a lot more flood due dilligence now.

by Te Kooti | 2nd Feb 23, 12:23pm 1675293797

Geotech engineer and geologists will be the next skill shortage, if not already.

by Advisor | 2nd Feb 23, 3:56pm 1675306571

Has been a skill shortage for eons. Plenty of job openings even in the smallest NZ town for experienced geological/structural engineers, etc. but pay is crap because clients won't open their wallets wide enough for this critical service.

So, the usual is a race-to-the-bottom on wages and cutthroat competition among consultancies. Even councils and government agencies (in Wellington, Chch and Auckland at least) pay higher hourly rates to management consultants, comms advisors and change managers than to the experts who make decisions on the structural integrity of our homes, offices and civil infrastructure.

by Nzdan | 2nd Feb 23, 6:07pm 1675314471

Amazing how many graduate engineers are involved in project managing high value critical capital renewal projects.

"Can you send through the bolt torque settings for these M36 Stainless Bolts?"
"Suuuure, do you not have a mechanical engineer on this project?"
"No. Thanks for sending through you're a life saver!!!!! What does lightly oiled vs well lubricated mean?".

by Zabman | 2nd Feb 23, 1:47pm 1675298855

Have they tried a submersible?

by Averageman | 2nd Feb 23, 11:01am 1675288863

Withdrawl of access to credit, especially cheap credit. Prices back to 2017 and 2018 levels. It's a long way back to being supported by income.

Popcorn.

by huttman | 2nd Feb 23, 11:22am 1675290145

salary jumped 8.1% y/y as per figure yesterday.

by redcows1 | 2nd Feb 23, 2:15pm 1675300533

Net increase also been stated as 2.1%

by Crazy Horse | 2nd Feb 23, 4:28pm 1675308518

Whose salary huttman ? .....mine certainly hasn't

While even at a median of $1 mil, you still need a household income of $250,000pa, to bring the ratio of 4 years of income to the cost of a property - a reasonable ratio.

For someone to buy a property for a $1 mil, on $120 gross pa, it would be just over 8 years of household income - while they would have to find $1166 pw for a $800k P & I mtge (with a 20% or $200k deposit)

Or another way of looking at it, is $120,000 gross household income less tax 20% = $96,000 less Mtge P & I above (52 x $1166 = $60,632) = $35,368 less opportunity cost of the $200k deposit forgone ie term deposit $200k @ 5% less 17.5% RWT = $8,250 ......leaves a grand total pa of ....$ 27,118

Net weekly income, even based on ignoring the opportunity cost of $8,250 net interest for the term deposit is $680 pw ....try looking after a family on that ?

What a greedy little country this place is, more concerned with the "big 4" Aussie banks profit .....then you have employers bleating we can't find staff, as we have to pay more and can't afford it, well have you ever heard of "if you can't cover your costs, you ain't running your business properly".

Now both governments are going to turn the immigration tap back on...so the employers can bring wages down with immigrant labour and boost their turnover with more population. ....no one considers heath, education and infrastructure, then we are the only country in the western world without a capital gains tax on residential property.

The whole system is based on DEBT .....no debt, no money circulating...the USA has currently $31,528,000,000,000 trillion debt or $246,867 per taxpayer ! ...try dragging that back in from those taxpayers !

If I was 28 again - married or single I would be outta here .......F&%# supporting this "outtawhack" system and a bunch of arrogant, self centered, narrow minded, NIMBY boomers !

NB: while the above hasn't even taken into account, capital losses on your property if you bought now ......

by fortunr | 2nd Feb 23, 11:22am 1675290144

I can easily see prices falling a further 15%, if not 20% in some areas.

Now, including the previous falls, and looking at it in real terms (taking into account the current rate of inflation) the overall fall in real terms, in this cycle, is going to be of quite massive proportions.

by SND | 2nd Feb 23, 12:02pm 1675292529

Exactly. "Luckily" no one thinks in real terms, so won't see the full extent of the fall. Time is just playing against sellers sticking to CV value in nominal terms. An other couple of years with ~6% inflation and that's a ~25% drop (accounting for 7.2 inflation in 2022) silently taking place. This will help FHBs in the future.

by Black and White | 2nd Feb 23, 12:20pm 1675293633

Great news long may it continue.

Another 25% yet great for young New Zealanders

by DMC45 | 2nd Feb 23, 4:54pm 1675310078

Still COVID froth being cleared though....only back to early 2021.

by Zabman | 2nd Feb 23, 10:51am 1675288260

Median prices aside, the fact that they have the most supply in 10 years and lowest sales month since Covid - I hate to think what those to factors combined will do to the economy as a whole moving forwards

by GenerationY | 2nd Feb 23, 11:00am 1675288802

There is a lock of stock in auckland if you include 'new build' apartments and townhouses. But stock of larger, quality housing stock is still severely limited. I've been looking to upsize in Te Atatu, Three Kings Mangere Bridge, Mt Albert, or West Harbour areas and there is very little stock on the market. Quality homes all sold before Christmas.

by Nellbell | 2nd Feb 23, 11:09am 1675289340

Hi GenY, I would just bide my time and wait and see if I was you, a few more months will make a big difference. We are also looking for a good quality home, not in Auckland. We are seeing quite a few more good listings this week and it seems to us very few buyers are around. Agents are being super friendly and attentive - that’s a change.

by HW2 | 2nd Feb 23, 11:40am 1675291202

You would have enjoyed the country house series on One

by Nellbell | 2nd Feb 23, 12:45pm 1675295133

Yes HW2, but only the South Island properties. In the North Island seems they couldn’t find country homes at a reasonable price ( haha), so instead offered up houses in the small towns. Might be a better show if they do a season this year.

Also was funny that every looker purchased, we decided it was a set up….. getting someone who had bought already then asking them to film another couple of houses with them and pretend to choose.

by HW2 | 2nd Feb 23, 1:07pm 1675296447

Good insight, your second point. The one exception might be the father and son who bought in Cambridge

Have you watched the UKs Escape to the Country, identical format. Some purchase a lot dont. Cheers

by IT GUY | 2nd Feb 23, 6:59pm 1675317561

Did i see something in Waipawa at 799k almost puked.

I remember Waipukurau near 1.5mil... I was born in Waipukurau....

for reference I purchased a villa in Summer St Ponsonby for 450k in 2003

how this crap is worth this much I do not understand we have just not had wage inflation.....

by HW2 | 2nd Feb 23, 8:39pm 1675323552

Very easily, inflation. Compounded inflation over a long period

The value of a dollar has inflated nearly 2 dozen times over 50 years.

Obviously you've moved on since your summer st house and sitting on 16 hectares waiting for it to be up-zoned.

Why do you call your ponsonby house crap, you don't sound like the type to own crap. You can denigrate all you like, it washes over.

by bookworm69 | 3rd Feb 23, 7:21am 1675362075

As seen on a forum I look at:

"Did anyone see 'Country House' on TV1 last evening? The third house was the home my sister-in-law was selling. At the time of viewing by that lady, it was under contract for a heck of a lot more than their 'price' of $800,000. And the woman had already bought a house before filming, and it wasn't one shown on the TV. It shows how deceptive TV can be."

Also, "Your sister in law is the second house featured incorrectly in that TV program - one of the houses featured was the home of one of my granddaughters friends - it was sold to somebody else for a lot more than the couple on the program supposedly paid"

by DMC45 | 2nd Feb 23, 4:57pm 1675310263

rebalance it perhaps (with some pain)?

by Yvil | 2nd Feb 23, 10:52am 1675288369

Maybe I should have accepted the offer I had on Tuesday, lol.

by Averageman | 2nd Feb 23, 10:58am 1675288689

Do you mind sharing why you didnt?

by sit23 | 2nd Feb 23, 11:03am 1675288986

Doesn't Yvil rent? He may have been pulling your leg.

by IT GUY | 2nd Feb 23, 11:05am 1675289133

Maybe the offer was a non commision based job?

by Yvil | 2nd Feb 23, 11:11am 1675289488

I rented whilst in between houses but I now again, own the house I live in. Also the house I'm selling is not the house I'm living in, so wether I'm renting or not is besides the point.

by Yvil | 2nd Feb 23, 11:05am 1675289142

Sure, firstly the house is in Chch, not Auckland, so the drops (so far anyway) are much smaller and there are still more buyers. The reason I didn't accept the offer is that the house had only been on the market for 2 days, and I do believe that, with more marketing time, I will get a better offer. Time will tell...

by HouseMouse | 2nd Feb 23, 11:08am 1675289286

In the past you said you only owned your house in Auckland (I think you sold a Bach a couple of years ago)

Was the ChCh house a purchase in the last year or so?

by Yvil | 2nd Feb 23, 11:53am 1675291988

It's a house I have owned for many years, in which my mother-in-law lives. I was not going to sell it, but she had a stroke in October 2022, we thought she would recover, but she is still partially paralysed, so she needs to move into a smaller, easy care place. I'm not interested in having another tenant, also the sale allows metro repay a mortgage on my own house, due for much more expensive renewal in August.

by Llama_360 | 2nd Feb 23, 12:04pm 1675292675

Are you somewhat flattered that so many commenters take such a keen interest in your personal liife, Yvil?

by Norm | 2nd Feb 23, 12:22pm 1675293738

Haha, good one. It was an attempted troll, trying to catch Yvil out. It failed, hence the comment below.

by Yvil | 2nd Feb 23, 1:49pm 1675298960

Well, I'm one of the most open and honest commenters here, and I often get grilled for having the courage to share what I do, by people who are too scared to share anything about themselves.

I think it would be great, if we were all a bit more open about ourselves.

by Chairman Moa | 2nd Feb 23, 2:35pm 1675301730

Are you married and handsome Yvil?

by Yvil | 2nd Feb 23, 3:32pm 1675305145

Married for a long time, lol.

by Chairman Moa | 2nd Feb 23, 3:37pm 1675305439

What about handsome bit?

by Carlos67 | 2nd Feb 23, 3:57pm 1675306625

Who needs that when you are rich ?

by Chairman Moa | 2nd Feb 23, 4:23pm 1675308208

good point

by Rob Reid | 2nd Feb 23, 10:34pm 1675330465

Haha! This thread looks like a conversation between multiple instances of ChatGPT.

by Mrs The Point | 2nd Feb 23, 4:23pm 1675308201

Use your own judgement:

[Link to personal information deleted for privacy reasons]

by HouseMouse | 2nd Feb 23, 4:27pm 1675308455

But can we trust what you say? You said you dislike NIMBYs yet submitted against high density housing plans in St Mary’s Bay.

by HouseMouse | 2nd Feb 23, 12:07pm 1675292827

Anything else you own but haven’t told us about? 10 rental properties?

by Chairman Moa | 2nd Feb 23, 12:35pm 1675294553

the Motel ?? I haven't really pay too much attention.

by HouseMouse | 2nd Feb 23, 12:46pm 1675295215

Oh we know about the motel. It was motel plus Auckland house (he told us he sold his Bach a couple of years ago). Now there’s a ChCh house. I am betting a few rental investments too.

by Mrs The Point | 2nd Feb 23, 4:36pm 1675309015

Comment abridged for privacy reasons- ed

Who ever bought this one caught the falling knife. Cutting down the trees to improve the view didn't help.

by Chairman Moa | 2nd Feb 23, 11:25am 1675290324

@Yvil "house had only been on the market for 2 days"

Bird is the hand scenario !

by BadRobot | 2nd Feb 23, 12:27pm 1675294047

Valuations came out yesterday for CHCH - I don't know whether to laugh or cry. My property "value" has increased @ 60% since the last valuation - insane.

by Nellbell | 2nd Feb 23, 1:15pm 1675296909

Gosh, QV data is way too slow and thus outdated in this environment. We really need to stop using RVs as a yardstick I reckon.

by pigeonbox | 2nd Feb 23, 11:05am 1675289159

Would be keen to hear the details. I've just accepted an offer 200k up on what i paid 5 years ago, but probably 200k less than if i had sold last year... still not sure if i made the right decision but increasingly appears so

by HW2 | 2nd Feb 23, 11:41am 1675291303

If you are in a valley, or on a hillside, yes.

by Yvil | 2nd Feb 23, 11:58am 1675292323

Pigeonbox, you can't go broke taking a profit. Don't worry about what you could have gotten, be happy to have made $200k.

The offer I got on the house I'm selling was, I thought pretty good, it's miles above the RV of Tuesday, when the offer was made, but below the brand new RV that came out yesterday. In any case, I've owned the house for 11 or 12 years so the sale price will be about double the purchase price of back then. Good luck to you.

by Rob Reid | 2nd Feb 23, 10:42pm 1675330954

What you paid for it is a sunk cost and irrelevant (except for generating good or bad feelings), so being up or down on what you paid is no measure of whether it was a good decision to sell.

In retrospect, not selling at the top cost you 200k. Tops are hard to call so understandable. And as you say, NOT selling would probably have cost you more.

by bw | 2nd Feb 23, 11:00am 1675288828

"...or are finding obtaining finance too challenging"

Absolutely. And that is going to continue, one way or another.

Generally, buyers will always use the maximum they can borrow - that's what 40 years of conditioning does - and as long as we keep a stranglehold on the supply of Debt, then prices have to adjust.

As we've noted many times, it's not about the price of Debt (after all, property prices soared ~15 years ago even as mortgage rate went into the teens), it's about the amount of Debt available and what we us it for.

by Beanie | 2nd Feb 23, 12:01pm 1675292509

..."that's what 40 years of conditioning does"...

It is going to take widespread carnage where everyone knows someone who is wiped out to change the 'you can't go wrong with bricks and mortar' attitude. A bit like what happened with the sharemarket and farming in the 80s.

by IT GUY | 2nd Feb 23, 11:13am 1675289633

Vendors and Buyers having different views on value

Thats all you need to know, and just as vendors start to wake up, buyers lower there offer.... Market could fall 50% from peak on very low volume all the way down. Would take us back to 2012-14 type prices.

Once forced sellors enter the market the entire dynamic changes. Denial becomes Panic and Anger. This will be in full flow come Oct 14, Chippy has zero chance here.

by Miguel | 2nd Feb 23, 11:32am 1675290745

Vendors and Buyers having different views on value

The thing is, for a lot of buyers, its not their "view" on what a house is worth, its based on what they can afford to borrow. So its likely sellers will need to change their view of the value, in order to align with new realty of higher interest rates.

by sparrow | 2nd Feb 23, 11:34am 1675290849

Chippy has zero chance here.

Two thirds of households don't have mortgages (rent or debt free). They don't care, or are happy to see prices fall.

The average loan balance of the one third is, from memory, $240,000? Under 300,00 in any case, a relatively small sum.

I feel for first home buyers who were conned, but NZ needs to learn property speculation isn't a one way bet. A few overleveraged speculators going broke would help with that.

by J.C. | 2nd Feb 23, 12:16pm 1675293397

Two thirds of households don't have mortgages (rent or debt free). They don't care, or are happy to see prices fall.

This is wrong-headed. One of the key reasons why the property ponzi is tolerated is for the positive impacts it has on the wider economy, particularly spending. It affects everyone. Not just the marginal buyers who got duped. The marginal buyers are important though. Their behavior typically impacts the entire mkt.

by DMC45 | 2nd Feb 23, 5:31pm 1675312271

Sure, but while property Ponzi wealth affect decline due to Ponzi collapse would be painful, in the long-term everyone would have more money to spend (actually be more wealthy). With reasonably priced houses people wouldn't have to debt load to insane amounts to buy a Ponzi house and rely on paper capital gains to feel wealthy.

by IT GUY | 2nd Feb 23, 1:54pm 1675299287

60-80,000 swing voters across NZ set the NZ governement, Labour currently has a lot of fair weather friends, but its been raining. Auckland fell out of love with JA over the lockdowns. Hence they voted for Brown. Browns failings will not make them fall in love with Chippy. Those swing voters decide on issues not ideology.

by Palmtree08 | 2nd Feb 23, 12:20pm 1675293631

The average balance may be 240, but I wonder how many people split their mortgage and whether this is taken account of?

by WestieAJ | 2nd Feb 23, 9:58pm 1675328312

According to Westpac Chief Economist. New Zealand's Effective mortgage rate is currently 3.7% and will rise to 5.3% by the end of the year.

Approx 640,000 households are servicing a mortgage on the house they live in. New Zealand has 337 Billion of total mortgage debt.

So that is a rough average of 520K each per household. 1.6% additional mortgage interest will be 5.4 billion per year or $8300 per

household average.

by Rob Reid | 2nd Feb 23, 10:48pm 1675331334

$8300 pa more interest on average. Ouch.

by user123 | 2nd Feb 23, 4:11pm 1675307519

I fully agree. There is no way this doesn't get really messy and ugly for forced sellers during the second half of this year. That will take the market to fresh lows. 6 months ago I was expecting a peak to trough decline of 30%, with an outside chance of 50%. My base case is now pushing close to a 50% decline. I would be shocked if we don't end up down over 40%.

by chebbo | 2nd Feb 23, 11:04am 1675289065

It's sobering to see that huge fall from peak in dollar figures, and then realise this only brings us back a couple of years in median price.

Just goes to show how big the ramp up in prices has been since COVID hit, and how far they've still got to fall. All the pre-COVID froth has to come off yet.

by Averageman | 2nd Feb 23, 11:07am 1675289237

Agreed. The 2% fueled ramp up was mental. Those that bailed out on that cheap credit and banked the paper gains well done. Those that think that is whats happening today...be prepared for a long term hold.

by IT GUY | 2nd Feb 23, 11:09am 1675289352

Not many in AKL did as the lockdown put people off listing

by Rob Reid | 2nd Feb 23, 10:50pm 1675331420

A ladder full of bag holders.

by HouseMouse | 2nd Feb 23, 11:08am 1675289327

The RBNZ has so much to answer for…

by ChrisOfNoFame | 3rd Feb 23, 12:50pm 1675381824

100% ... Clumsy and extremist. The monetary policy committee should resign en masse!!

by nz-it-worker | 2nd Feb 23, 11:12am 1675289528

Auckland's property market appears to have made a disastrous start to 2023

Markets have sellers and buyers. Not sure if the buyers, particularly those new to the market would consider it a disaster.

by HouseMouse | 2nd Feb 23, 11:43am 1675291398

I guess it’s disastrous for the property/RE industry.

by Taubin | 2nd Feb 23, 5:28pm 1675312131

I'd feel for the RE industry, but I just can't quite reach.

by Prickle | 2nd Feb 23, 8:53pm 1675324403

Very low number of sales is disastrous for commission only sales force

by Von Metternich | 2nd Feb 23, 11:13am 1675289601

A lot of boomers with all their savings in their homes finding their capital is not worth what they dreamed.

I suspect much of the 'vendor' resistance is the feeling that these houses are their piggybanks, after refusing to save money for years.

by IT GUY | 2nd Feb 23, 11:15am 1675289701

How do agents bridge gap between what you want and what you'll get? | Stuff.co.nz

by huttman | 2nd Feb 23, 11:14am 1675289663

recession has arrived in town.

by nguturoa | 2nd Feb 23, 11:21am 1675290078

The statement of buyers and sellers having different views in value sums it all up.

Only the smart ones are left in the market to buy now. The FOMO and the desperate ones have all bought at the high.

So the smart ones know the real value of the property and they are not jumping in with eyes closed. The sellers now need to wake up from their slumber of want to sell.

The buyer have the hard cash and the seller has an immovable asset, don't need a doctorate to understand what will happen next.

Again just my opinion and I am not an expert.

by WestieAJ | 2nd Feb 23, 11:27am 1675290439

The spending habits of Aucklanders will change rapidly once they realise the parachute they thought they always had available has a giant hole in it. Those who a fortunate to have a reserve chutes (holiday home or rentals) thought they were extra safe. But those ones have holes in them as well. Hopefully resistance will be enough to slow the descent. But it's time to brace for impact.

by IT GUY | 2nd Feb 23, 11:33am 1675290788

Yeah Westie thats a sort of yes and no, if boomers bought ages ago and have a 5-600pw rental flow, it may change a bit but will still buy the groceries each week going through the next decade. All those who fell for the spruiker BS and got on at the top are well screwed.

IMHO this is like the1987 share crash moment, we will define the 22/23 crash in the same way at family gatherings in 20 years. Lots of boomers got screwed over with the finance comapines after the GFC as well, its not all beer and skittles being a boomer.

by Thinker | 2nd Feb 23, 11:34am 1675290885

Aucklanders? Try the entire country.

by stefanblaise | 2nd Feb 23, 11:41am 1675291283

Average prices look like they went up alot in 2007.

by Nzdan | 2nd Feb 23, 11:42am 1675291320

Local Ray White agent in Wairarapa sends through Weekly Listings Update emails. Always 2 - 3 properties per update, including the 26/1 update.

This week, 15 properties.

by HW2 | 2nd Feb 23, 11:49am 1675291777

Are you implying that the Wairarapa is representative of the whole country

Sorry for the pushback 🙃

by Nzdan | 2nd Feb 23, 1:01pm 1675296085

Yes, I am implying [the] Wairarapa represents the whole country. Infact, the whole world revolves around [the] Wairarapa.

by HW2 | 2nd Feb 23, 1:39pm 1675298371

🤣🤣🤣

by Nellbell | 2nd Feb 23, 1:12pm 1675296745

Wairarapa was riding on the tails of the huge and rapid increases that occurred in Wellington during 2021. This was fuelled not by auctions but by multiple buyers for the same property, making competitive tenders - driving all prices higher in a process that offered no transparency. Although the house price index has been dropping steadily in the Wairarapa over the last year, most properties here still have 2021 prices on the listing or no prices at all. Auctions don’t happen much down this end of the island, although I notice a few companies dabbling in them this month. Anyway listings have been building steadily and are now flooding in as NZDan said - sitting at nearly three times what they were at the peak. But there are very few sales. Carterton and South Wairarapa each having between 5 and ten sales per month.

In the market we are looking at vendors seem to be older people, and they are trying hard to retain the nest egg that is in their main asset, so thus not many sales. We are not helped in Wairarapa as Homes.co is “broken” and shows all prices continuing to tick upwards, reassuring vendors their high expectations are correct.

by Nzdan | 2nd Feb 23, 3:05pm 1675303522

We bought our first home in early 2017 in Solway, Masterton. At the time, Trade me listings total were around 100 - 120. I distinctly remember because it was quite a battle to find good buying, the market was just starting to go crazy and we were getting outbid. Today that number is around 200 - 250.

Wairarapa experienced huge growth from 2017 to 2021, where we sold our first home Dec 21 for basically triple what we paid. Homes.co has our current property @ 20% more than what we paid. The bank 15% less than what we paid. It's all over the place.

by HouseMouse | 2nd Feb 23, 11:46am 1675291577

I wonder what, if any, impact the floods will have on the market.

might more FHBs think ‘screw it, not only is it a massive financial stretch for me to buy, but many properties are now a potential liability rather than an asset’

by Toye | 2nd Feb 23, 11:48am 1675291725

Some will give up and sell, damaged or undamaged.

One thing that is for sure is that people will scrutinise flood prone properties a lot more and hence they are likely to be worth a good bit less - as they should.

by HouseMouse | 2nd Feb 23, 12:09pm 1675292980

Exactly. Also anything on or near a cliff, or on a steep slope.

Having said that, memories are short and there are fools aplenty. In two years time people will be back into old habits….

by Palmtree08 | 2nd Feb 23, 12:26pm 1675294001

Hard to believe all those leafy cliff top mansions could ever be cheap, unless the land giving way is taking the piles with it?

by Kohukohunui | 2nd Feb 23, 3:15pm 1675304131

Have you perhaps been in the bush away from the news?

by IT GUY | 2nd Feb 23, 1:58pm 1675299486

Houses in dips that flooded will have no buyers offering a "value" that sellors will accept. Draw your own conclusions what a house is worth with no buyers... renters will also consider these as non prime. I was surprised with the flooding in Epsom. On the realtime mapping that showed emergency callouts, everything east of Remuera faired quite well.

by HouseMouse | 2nd Feb 23, 12:49pm 1675295359

My son rents in Epsom. It was carnage there.

by ambivalent | 2nd Feb 23, 1:02pm 1675296148

What really frustrates me is when the market was booming, agents would say “the property is worth what someone is willing to pay for it”, and to ignore all recent sales or comparisons to RV, put everything you have into the offer and buy the most expensive property you can afford.

Now that the tide has turned, my offers are being turned down as they are not market value. Well Janice, if the property is on the market for weeks on end, and mine is the ONLY offer then it is, by definition, “market value”! As you used to say…the property is worth what someone is willing to pay for it.

I really hope anyone out there buying property is low balling the heck out of their offers.

by IT GUY | 2nd Feb 23, 1:17pm 1675297036

As I commented yesterday, Sellors need to put there Best Foot Backwards.

by Rob Reid | 2nd Feb 23, 10:59pm 1675331968

Is "I am permanently out of NZ's farcical property market, it's just one of the things I watch while chowing down on popcorn" lowball enough?

by Jaf | 3rd Feb 23, 9:05am 1675368322

Agreed. If a buyer low balls, RE agent would term it a "Cheeky " offer. But, what about a ramped-up Asking Price by the vendor & Re agent? Not cheeky? Maybe a rip-off is a more apt word!!!

by DTRH | 2nd Feb 23, 1:23pm 1675297410

House price’s will continue to fall, interest rates hikes over last year from emergency levels will only just start hitting the pockets of people who fixed at low rates levels when they refinance. Weekly payments will go from $950 to $1500 for million dollar mortgage which if you were lucky could of bought you a 3 bedroom box In Auckland. The ship is going down and anyone who purchased property over last six or seven years will see huge paper profits gone.

by tomyam | 2nd Feb 23, 1:51pm 1675299093

A good friend is looking for his first home. A wife and 2 kids, husband on 250k and wife is on 60k. 140k deposit. Budget 900k + deposit.

Apparently out of all the 3 -4 bedder townhouse, the agents wants 1.2-1.4 for them and won't budge on dropping price, the most price they have dropped was 50k. Seem a lot of vendor are still stuck in 2021 prices, do they not realise what the repayment is for a 900k mortgage at 6.79% ?

by Averageman | 2nd Feb 23, 1:55pm 1675299307

Wait. The worm has turned, let if pick up some speed.

by IT GUY | 2nd Feb 23, 2:02pm 1675299729

I think we could see 4-5% falls for Feb or March. No point droping your ask 2% here. many homes been listed from failed auction for months. If you think you home is worth 2 mill think again, how many non FHBers are actuall even thinking about buying here?

by Carlos67 | 2nd Feb 23, 2:25pm 1675301144

You are joking right ? 6.8% rates are probably the historic average and with their combined salary that is only a 3x income budget, they couldn't possibly expect to get better. Gee wish I had it that good back in 2005, I had 5x income mortgage and like 8% rates. The real problem in Auckland is now finding good quality builds in elevated positions that are not flood or slip prone, good luck with that.

by tomyam | 2nd Feb 23, 2:44pm 1675302250

Not joking. The point is the bloke's wage is way above average and yet they can't afford an average house.

They went to this place and the agent wanted 1.4 mil for it. https://rworakei.co.nz/properties/sold-residential/auckland-city/mount-wellington-1060/house/2827166. The house is not even a full section and wedge between 3 other houses in a not so decent suburb. Wonder what it sold for though.

Places in Te Atatu are also all above 1.2.

by Kate | 2nd Feb 23, 4:02pm 1675306933

Sold in June 2021 but the price is yet to be recorded on homes.co.nz.

However, their new mid-point estimate for the property is $890K.

What is it with flat roofed houses though? Not a great design in our sub-tropics - is it cheaper to build a flat roof?

by Mrs The Point | 2nd Feb 23, 4:25pm 1675308351

My first though too. No eaves, have we learned nothing from the leaky homes mess?

by tomyam | 2nd Feb 23, 4:40pm 1675309223

sold in June 2021 for 750k i believe. The current owner renovated it and now want 1.4 for it.

by Nellbell | 2nd Feb 23, 4:00pm 1675306859

Hi Tomyam

I think talking to agents about price is not too fruitful at the moment. At present we have stopped any discussions on price with agents and use propertyvalue or QV sites to give an indication. Price discussions just create conflict in the bargaining environment.

The townhouse developer will have huge holding costs for the development, and this is only going to increase in the medium term. The developers project budget would likely have assumed a sale off plan some time ago or a sale soon after completion of the townhouse, plus an interest rate on loans over half what they are now. It is hard to see that holding the townhouse for any length of time could be sustainable. I would imagine the townhouse developer will be loosing sleep at present and also are having some very serious discussions with their bank.

We are looking at a property currently, and are considering making an offer…. It will be well shy of the vendor expectation. We are thus developing a rationale for presenting our offer which includes comparative sales ( or the above site info), HPI drop, latest auction data ( this weeks sale all look to be below 2021 RV) plus pointing out the significant risk that purchasers are making at the moment - the “catching a falling knife” thing ….. therefore all buyers are going to be looking at discounted prices as there is significant very downward risk in the housing market at the moment.

Tell your friend that the agent is not their friend - don’t engage too much with them, he/she is not on their side, they are on there for the seller. The hope is that ultimately they are mostly there for themselves and will endeavour to stitch a deal together to get the commission.

by IT GUY | 2nd Feb 23, 7:10pm 1675318218

get the vendors sale and purchase agreement and write conditions then put in a price, they will counter offer...... agents are nothing but the go between what they think does not count.... they are a bit desperate, barfooots -46% sales and prices 25% lower = commisions are bad, many agents will go here. If you ever wanted a white range rover vogue (they are a crap car) dime a dozen now

by Smudge02 | 2nd Feb 23, 3:22pm 1675304550

Surely these recent weather events (which are becoming more and more common) are going to make people think long and hard about where they buy? There are many photos of cliff top mansions that are now uninhabitable, so any property that is in a similar type location, even if they were not directly affected this time around, are going to take a hit in the valuation of that property?

by have no idea | 2nd Feb 23, 4:19pm 1675307954

https://www.nzherald.co.nz/nz/auckland-floods-residents-at-auckland-blo…

This epsom property's price may fall off a cliff.

by HouseMouse | 2nd Feb 23, 5:42pm 1675312934

David Seymour, lol.

Does he still want planning rules freed up everywhere but Epsom????

by ACB | 2nd Feb 23, 6:29pm 1675315777

Many Auckland suburbs have had streets or individual properties get flooded or experience slips. But the vast majority of residences in each are ok . I

by IT GUY | 2nd Feb 23, 7:12pm 1675318367

thats the rub, buyers will ask via lawyer have you ever made a claim for flooding and you will have to answer honestly or court time..... most of a suburb will be fine those in a dip... not so much. now it's not auction this will become common

by Jesse1 | 2nd Feb 23, 7:13pm 1675318437

I found the recent two polls very interesting with Hipkins and Labour getting a boost. A couple of months ago at an open home I had the agent telling me that when National get in they will support the market. Surely these polls will cause even less confidence in the market going forward.

by estateagent | 2nd Feb 23, 9:15pm 1675325720

These floods are likely to see the Auckland region house market very flat for quite a while. Will be pretty much zero interest in properties on flood plains, overland flow paths or near cliffs. Question all buyers will be asking about any property will be “what happened to this property in the great flood of 2023?” Buyers will be highly suspicious.

Buyers will want to make lengthy due diligence conditional offers so they can have a full understanding of any potential issues. Auctions will be out of favour and we may see an under hammer sell rate in Feb/Mar/Apr well under 20%.

Won’t be a lot of interest in Coromandel properties either, that relied on the Kopu to Tairua Road until some timeframe is established for the repair - could be a year or more until that is fixed!

Can see councils altering all rules for building in flood prone areas, gullies etc. Banks will be more reluctant to lend on properties where LIM report indicates a flood plain or overland flow path.

Gonna be a very disruptive year as the inflation surge that will come from increased rents, demand for building supplies required to remediate flood damaged homes, increased insurance premiums etc may push Reserve Bank to increase twice at 0.75 in the next two rounds.

Could be one of the most unpredictable years ever for the real estate market and on top of all of this market uncertainty prior to General Election.

by Small Kev | 2nd Feb 23, 9:56pm 1675328203

In other words people will be more picky, non flooded houses in safer zones will be more in demand.

Heck even some unfinished new builds were flooded…

by Whatwillhappen | 3rd Feb 23, 8:14am 1675365245

Indeed. Be wary of newly renovated houses in Auckland in a few months' time.

by Northlander09 | 3rd Feb 23, 8:59am 1675367975

How frustrating is it that in 2018/2019 the market was finding equilibreum, then BLAM, pandemic, mega inflationary response from the Gov, and now look at where we are... Makes you wonder what could have been if covid never happened, or the printer didn't go BRRRRRRR

by ChrisOfNoFame | 3rd Feb 23, 12:41pm 1675381262

Using the graphical tool ... Choose Auckland. Set the selection to average price and move the lower date slider back to 2011.

Now note the very clear trends.

2011 to 2016 - rising

2016 to Covid - flatlining

Why flatlining? I think it's due to the 2016 Unitary Plan. Note that now all cities are much the same as Auckland was back in 2016 thanks to Housing Supply Bill.

If you don't believe me, check other cities. E.g. Wellington just keep rising from 2011.

Old Chinese curse: "May you live in interesting times" ;)