Latest auction results suggest housing market may have passed summer peak

Property / news

Auction activity has dipped for two weeks in a row but the sales rate is steady at just over a third

18th Mar 23, 6:00am by Greg Ninness

There was a slight drop in auction activity for the second week in a row at the latest auctions, potentially signalling the market has passed its summer peak.

Interest.co.nz monitored 249 residential property auctions around the country over the week from 11-17 March, down from 268 the previous week and 293 the week before.

That has taken auction activity back to where it was in the first couple of weeks in February, suggesting the market is now on the downside of the summer peak.

However the sales rate has remained remarkably steady, with 81 properties selling under the hammer at the latest auctions, giving an overall sales rate of 33%.

The auction sales rate has remained at around a third or just over for most of the summer.

Price trends were also little changed at the latest auctions, with 36% of the properties that sold fetching prices above or equal to their rating valuations, barely changed from 38% the previous week.

The chart below shows the district-by-district results from the latest auctions monitored by interest.co.nz.

Details of the individual properties offered at all of the auctions monitored by interest.co.nz, including the prices achieved for the properties that sold, are available on our Residential Auction Results page.

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61 Comments

by Sendatsu | 18th Mar 23, 6:16am 1679073407

It will be interesting to see if you are right on this. The failure of SVB and accompanying rhetoric of 'interest rates have peaked/soon-to-peak therefore rate cuts must be inbound' might cause some to feel that the bottom of this housing market is nearing. FOOP converting to FOMB (Missing the bottom) at some point this year?

by Pa1nter | 18th Mar 23, 6:36am 1679074585

While interest rates correlate to housing prices, there's a wider amount of growing negative economic sentiment that'll have people weary of making large financial commitments for this year at the very least.

But yeah part of the reason there's been so many sharp rate hikes is buffer to drop them again for economic stimulation.

by Retired-Poppy | 18th Mar 23, 8:05am 1679079944

Careful Pa1nter, you could be held accountable for inducing a medical event. Historically focused Spruiker's will find the thought of cheaper debt very stimulating........😆

by tothepoint | 18th Mar 23, 7:15pm 1679120135

The housing market is shaking out a few of those who got themselves donkey deep in debt during the last market upswing.

There’s nothing new about that - it’s a standard market process for dealing with those who are given to (unsustainable) excesses.

But corrections also create strategic buying opportunities for those who adopt a counter-cyclical approach. When the masses climb in, we’ll see the launch of the next market upswing……

TTP

by JimboJones | 18th Mar 23, 8:11am 1679080268

Do you honestly think buying a house where the interest payments are so much more than possible rent (even before tax and expenses) is a great buying opportunity? I guess it might be if interest rates go down again, but a bit of a gamble. This is a very uncharted territory really, I can’t think of a time when yield has been so out of whack with interest rates, ignore that at your peril.

by Averageman | 18th Mar 23, 9:59am 1679086761

Just a tinsy winsy gully then ?

by DTRH | 18th Mar 23, 10:18am 1679087910

If they lower rates in any way inflation will go up to levels not see before. The USD will capitulated along with NZD, hyper inflation will be here people will be more like just trying the feed family the system will be over. House price’s will not be issue when people are just trying to survive cows or pigs will be more value than property. If you think lowing rates will start a new bull run you are very naive.

by Prickle | 18th Mar 23, 11:34am 1679092440

Hyperbole much?

by Pa1nter | 18th Mar 23, 12:43pm 1679096590

All the best investors think the sky's falling tomorrow.

by HW2 | 18th Mar 23, 12:47pm 1679096855

Meanwhile the fonterra result was forecast a month ago, right under their noses but market pricing did not pick up on it until the actual result. Improving from strength to strength.

Its not a sexy company by the likes of A2, xero etc.

by HW2 | 18th Mar 23, 1:04pm 1679097879

Mary Holm advice

"Perhaps we should add another investment rule: whenever you buy any asset whose price is volatile - such as shares or property or collectibles - picture the price falling in the next few years. Will that be difficult for you either financially or psychologically? If yes, dont buy"

From her investment advice column

by malamah | 18th Mar 23, 7:56am 1679079395

Imagine what a run on housing would do to our unstable dollar.

by IT GUY | 18th Mar 23, 8:00am 1679079613

not as much as you might think if same is happening in usa

by Dgm | 18th Mar 23, 9:45am 1679085951

Hello spruiker, with the bank turmoil, the funding costs will remain high..

Maybe you can rescue some of those distressed sellers

by Prickle | 18th Mar 23, 11:31am 1679092311

Definitely the time to buy. Nobody can pick the actual bottom because it is retrospective, but we are close. Having said that, prices are now likely to steady rather than increase.

by DTRH | 18th Mar 23, 11:49am 1679093354

The bottom is way off how much would you need to earning to by a million dollar tiny house in Auckland from scratch maybe around 300k per year top 5% of earners are the only people how can afford this and I can’t see them in a tiny 3 bedroom place with stamp for garden. This housing market will continue to fall for a year or so and then just stay flat for years

by Prickle | 18th Mar 23, 1:06pm 1679097992

Auckland isn’t the only market. Cities world wide always attract premium prices. There are plenty of options in the provinces.

by agnostium | 18th Mar 23, 6:55pm 1679118947

The regions prices are set in relation to Auckland. If Auckland is a small city at the end of the world, a house in the regional whops whops is even more remote (and overpriced).

by Dgm | 18th Mar 23, 11:53am 1679093624

How many properties have you got listed at the moment?

by IT GUY | 18th Mar 23, 12:24pm 1679095485

Thats why I clearly state a metric rather than a date.... When the monthly reported moving average price turns positive over a 6 month period, the bottom is in or close..... you don't need to pick the day, you will not miss out.... we are not close and you present no data to prove its stopped falling..... where as every month for the last 6 months its negitive.... some facts vs opinions please

by Prickle | 18th Mar 23, 1:10pm 1679098248

It’s a feeling in my water after years of being around the biz. Plus interest rate pauses, steady sales and prices, the realisation of pent up demand, election year…

by IT GUY | 18th Mar 23, 1:27pm 1679099239

Your waters? well my waters tell me there is a lot of pent up desperation, and that the pols show Labour ahead....... more importantly my technique is built on real data based on every house sale printed each month.... so its repeatable and usable by anyone in NZ who does not have access to "the waters" the last 6 month moving average of house price sales in NZ is still NEGITIVE = the bottom is not in.

by Prickle | 18th Mar 23, 2:31pm 1679103119

We shall see…my intuition v your stats. And you know what they say about stats. Numbers are like people; torture them enough and they'll tell you anything.

by agnostium | 18th Mar 23, 7:18pm 1679120304

Sounds like you should be the last person anyone should listen to then.

Waters and years in the biz 😂😂😂

by Ahuhyeah | 19th Mar 23, 8:25am 1679167512

I like to think gut instincts are often processing of lots of data points almost subconsciously. Yes vulnerable to being misguided but not completely discounted as having no value without some reflection.

Statistical methods are (should be) much more reliable but have their own vulnerabilities. Icecream sales and shark attacks are closely correlated. Which is causing the other? What? neither? but statistically.....

Unless we can eliminate all other possible variables (even pure sciences find that hard) we have embedded assumptions too.... where we've got assumptions ... well. I assume you know what I mean.

by JimboJones | 19th Mar 23, 9:45am 1679172334

In this case the gut instinct is probably based on a history of house prices always increasing. But I’m not sure the author has realised that house prices have increased because interest rates have decreased. Now that interest rates have gone the other way, house prices should drop substantially to maintain some level of affordability.

by Ahuhyeah | 19th Mar 23, 12:18pm 1679181509

True

by Nzdan | 19th Mar 23, 5:46pm 1679201214

And they did in Ireland when Interest rates increased from 3.49% in 2005 to 5.51% in 2008. Their market fell over 60%.

Our interest rates have increased considerably quicker, and higher. And our first year house price falls are considerably faster. Yet people still think a similar scenario here is off the table?????

by Hemi Ti Wire | 18th Mar 23, 2:23pm 1679102614

WTF?…

Of course you can predict the bottom... But not on the downslide , but on the upclimb.

When you see the market start climbing buy buy buy !

Buying on the way down is dumb as you don't know where the bottom is

by John2 | 19th Mar 23, 11:01pm 1679220063

let me spell it yo you

when you see the market start climbing . is same as just before bottom

by HouseMouse | 18th Mar 23, 2:11pm 1679101918

You are assuming an awful lot, you have no knowledge of my wider wealth - currently in term deposits (previously in shares) and KiwiSaver. Nor of my inheritance.

by HW2 | 18th Mar 23, 2:25pm 1679102738

You have told us all about that you were skint and waiting for your inheritance selling up the family home in Wellington. In 2019

by HouseMouse | 18th Mar 23, 2:40pm 1679103654

Rubbish. The only thing you got right in that sentence was that I bought in 2019.

My father sold his Wellington home in early 2021 and moved to a retirement village. That has nothing to do with inheritance or my house purchase.

Good bye.

by HW2 | 18th Mar 23, 2:49pm 1679104175

You put yourself out there and it is a clear example of someone who could have made better choices.

I wondered why someone who spent 2018 and 19 bagging housing would launch in and buy a house. Having an agenda springs to mind

by printer8 | 18th Mar 23, 4:44pm 1679111094

HW2

”Goodbye”

That’s just HM when in an indefensible position he acts like an immature kid, spitting the dummy and going home.

True to form, next he will be saying he won’t be playing with you anymore.

All due to an over inflated ego easily triggered. 😩

by aucklandproper… | 20th Mar 23, 9:39am 1679258384

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Thanks

Greg.

by HW2 | 18th Mar 23, 8:20pm 1679124026

For a 250k house deposit you might end up owning a house worth millions. You can NEVER do that by investing 250k in the sharemarket. If you're lucky you will get your capital back. Applying 7 percent implied return on the deposit, the same also applies to the total home value. Please calculate the compound value of the home at 7 percent, hint it doubles every 10 years.

For instance people who bought a home on 20 percent deposit in 1973 paid $1800 for a 9k purchase. The same home in 1987 was worth at least 135k. That is 1500 percent capital growth in 15 years.

I know of some units that cost 5k each to build in 1973. In 2023, the rent totals 5k every 10 or 11 weeks. In other words the rent pays for the construction cost 5 times every year

You can't get better investment than bricks and mortar IT GUY, I mean aucklandproperty guy

by Averageman | 18th Mar 23, 7:55am 1679079342

If sales have peaked then agents and agencies are in for a long winter.

by IT GUY | 18th Mar 23, 8:24am 1679081063

less cars in ski field car parks, all good

by Zachary Smith | 18th Mar 23, 8:28am 1679081294

Smaller cars or cars with bits missing?

by bw | 18th Mar 23, 9:01am 1679083304

(Relocated)

by gnx | 18th Mar 23, 9:12am 1679083925

Got this from one agent this week

”

Banks are swamped with pre-approval applications and are prioritising live deals.

There are so many positive indicators about the market right now that even uneducated buyers are actively looking. The most experienced investors certainly are...ask Tony Alexander.

Take a look at these new listings, make an offer and then take your bank a live deal.

You'll thank me later.”

God bless

by IT GUY | 18th Mar 23, 9:26am 1679084793

You can smell the desperation

by nguturoa | 18th Mar 23, 10:57am 1679090225

God Bless in the end says it all.

by Zachary Smith | 18th Mar 23, 3:33pm 1679106830

The agent blurb that I often see is, "Our vendors are very motivated to sell" or similar, they get a good bid at auction and then pass it in.

by pigeonbox | 18th Mar 23, 6:39pm 1679117945

"The REA's are the worst industry in NZ"

I'm going to go out on a very long limb here and disagree. We love to bash REAs but I think it's largely unwarranted. Of course they're going to say things like "buy now!" - it's called advertising. They're not giving you financial advice for heaven's sake, and if you mistake it to be that, then I'm so sorry. Any Harvey Norman catalogue says the same bland things. It's hardly deceitful to use photos that show things from the best angle, and if your due diligence was so poor that you didn't notice the gang pad next door, you can't pin that on the agent.

As far as selling, REAs are upfront about what it's going to cost you to use their service. If they don't get the result you wanted, you don't pay them a cent for their time.

And if you don't think they're worth the commission, don't hire them. No one's making you. Sell privately.

In my experience the most dishonest people are the tradespeople who will pull any BS figure out of the air that in no way reflects the labour or material used but rather the highest possible figure they can get away with without totally revealing the fact they're taking the p!ss. I'm sure there are good ones, but they must be a minority. Somehow this rort flies under the radar while we sit around whinging about REAs and car salesmen, who I personally have never had a problem with.

by agnostium | 18th Mar 23, 7:43pm 1679121825

Lying scumbag.

This is why people hate estate agents.

by pigeonbox | 18th Mar 23, 9:01pm 1679126477

Who hurt you

by Fossil Lover | 18th Mar 23, 7:59pm 1679122755

Housing is consumption (thus speculation), not 'investing'. I am not sure who is the uneducated one here.

by IT GUY | 18th Mar 23, 11:02am 1679090544

Small and medium-sized banks play an important role in the US economy. Banks with less than $250bn in assets account for roughly 50% of US commercial and industrial lending, 60% of residential real estate lending, 80% of commercial real estate lending, and 45% of consumer lending.

by rolande | 18th Mar 23, 11:56am 1679093788

I live close to Glen Innes. A row of 5 houses had been demolished to make way for a govt sponsored development. Has been idle for a while. This week they came and put a fairly permanent looking fence around the land. Assume they are mothballing it for a fair while.

by rolande | 18th Mar 23, 12:05pm 1679094309

Another section was building 6 townhouses but never got past the wooden frames. Has been idle over summer. I wonder how long framing will last uncovered.

by IT GUY | 18th Mar 23, 1:22pm 1679098979

Maybe but its pretty normal down there to secure the site.

by rolande | 18th Mar 23, 2:34pm 1679103272

Yeah I know, but this thing is pretty permanent looking. We'll see.

by IT GUY | 18th Mar 23, 5:34pm 1679114071

OMG - Ashley Church is delusional, he really thinks that the wokeness at RBNZ is the problem...... no its not its the fact that property needs low interest rates to survive, and as they say... Kansas is going bye bye....... what he does not get is that in an emergency yes interest rates get cut low but credit gets REAL HARD TO GET........ Spruikers are like Zombies

by HouseMouse | 18th Mar 23, 6:33pm 1679117580

I think he’s totally losing the plot. He’s not writing for One Woof anymore?

His ‘property portfolio’ is probably getting decimated.

by J.C. | 18th Mar 23, 7:23pm 1679120580

He's posting about the 'end of times' on LinkedIn. Apparently he's a Christian.

by HouseMouse | 18th Mar 23, 7:34pm 1679121274

There you go.

Property is crashing so it *must* be the end of times.

It’s a sign.

😂

by agnostium | 18th Mar 23, 7:47pm 1679122051

Same Church as Luxon?

by HW2 | 18th Mar 23, 9:52pm 1679129559

Hipkins has interests in 3 houses.

If its good for the goose its good for the other goose

by HW2 | 18th Mar 23, 11:27pm 1679135243

Confessing to listening to Ashley on the newstalk zb takes balls. Its almost like confessing to being a christian

🤭