Auction activity slowly winding down as the housing market comes to the end of the summer season

Property / news

Fewer properties being offered at auction as autumn takes hold but sales rate steady

25th Mar 23, 6:42am by Greg Ninness

Auction activity is slowly but steadily declining as the housing market comes to the end of the peak summer selling season.

Interest.co.nz monitored 237 residential property auctions around the country over the last week (18-24 March), down from 249 the previous week and just under 300 at the beginning of March.

The sales rate remains relatively steady at about a third, with 83 properties selling under the hammer at the latest auctions, giving an overall sales rate of 35%, up slightly from 33% the previous week.

Prices remained soft at the latest auctions, although the ratio of properties selling for amounts equal to or greater than their rating valuations has been fairly steady at about a third for several weeks, suggesting prices may have stabilised from recent falls.

Just 32% of properties sold for the same or more than their rating valuations at the latest auctions, down slightly from 36% the previous week.

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

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57 Comments

by Retired-Poppy | 25th Mar 23, 7:31am 1679682716

Yesteryears FOMO's are todays heavily indebted experiencing "if only we had waited" thoughts. Against the security, that debt is steadily rising in value.

by Justa comment | 25th Mar 23, 11:24am 1679696642

yes as we have all said many times now, the prices in 2021 were ridiculous, and the frenzy was out of control , using money created out of thin air. We are now all suffering the other side of the coin now, inflation. We would be in a better place if mortgages had just stayed at the usual 4.5 to 5.5% range.

by HW2 | 26th Mar 23, 11:30am 1679783418

Better still if we hadn't had LD where everyone had time to ogle and dream of new homes in the country or doing full renos because the kitchen cupboard doors had a small chip

Thankfully the red team headmaster has been sacked. Now let's pay those teachers what they're worth. The students (oh and a faceless bureaucrat decreed not to call them students) have had more than enough disruption.

Now that new head Hipkins goes on YouTube adverts pleased to inform us of benefits increasing 7.2 percent in April. While the govt offers teachers 3 percent increase in December 2023 or 2k WHICHEVER is the Highest. So that means inflation could drop below 3 percent (my arse!!) and teachers will get the $2k. Hipkins is gutless.

by tomjones_04 | 26th Mar 23, 12:21pm 1679786494

Well said HW2

by John2 | 29th Mar 23, 9:04am 1680033891

Although agree they need to be paid well, they whole education system is going downhill.

Paying teachers more will not fix this overnight.

What about 30% of employees who havent had a pay rise since 2021

And they dont have the benefit of media, unions and sympathy

by easymoney | 25th Mar 23, 5:57pm 1679720239

Amen to that

by Nellbell | 25th Mar 23, 7:44am 1679683468

Data requires a bit of dip down. QVs are all from differing periods eg Hutt and Christchurch updated last year, Hawkes Bay RVs date back to 2019. Bottom line, most activity is in Auckland and of the 65 houses sold, only 1/4 made their RV ( all of Auckland is at 2021 for RV date….. correct me if I’m wrong).

by Zachary Smith | 25th Mar 23, 8:08am 1679684928

The RV percentage is only useful if we compare it to previous results. Whether it is trending down or up over a period of months.

by Nellbell | 25th Mar 23, 9:21am 1679689307

I agree, but I find now it is being talked about a lot more in the market ( by agents). We had over two years of extremely turbulent prices, in my area almost all property got sold by closed bids, and eventual purchase price was vastly higher than initial vendor and even agent expectations with very wide ranges in bids prices. RVs were laughed at here then, we were told by an agent that they were already out of date - 40% too low - at the time they were issued (Sept 2020). Now that buyers have all but gone away, seems that they are being used as an anchor to try to realign prices with both vendors and purchasers……. My thoughts are they are being used as a buoy to tie prices to in a desperate attempt to stop them sinking too far.

I also think in our area people are using RVs as a benchmark to try and understand if we are back to pre covid times yet ( of course the HPI is the best tool for that) - so for here we are looking at prices in general to get below the 2020 RV - but remember that the agents told us in September 2020 that the 2020 RVs were 40% too low at time of publishing 😉.

Understanding house values by looking around at properties on the market as used to happen, is no longer a useful gauge as to where the market is as - the list prices are so incredibly high…. Higher than the peak. So you do need to look at last sold price or RV to at least gain a bit of context.

As for actual sales, Website pages now just have TBA published for most sales, so auction sale results are our most reliable information at this point.

Like others we will just watch and not buy at present, unless the price is crazy low….. like 2017 RV as some on this forum have suggested.

by Zachary Smith | 25th Mar 23, 10:08am 1679692096

Yes the relationship to RV over time is quite significant I think. My guess is that for all but the premium properties values will return to around the 2017 RV value on average in Auckland. Analyzing the sales history of one property that sold this week shows that previous sales were quite close to the RV and now it is selling for the RV value that was set in 2017. Of course "one swallow doth not a summer make". If a property always sold for around the RV value it has tended to follow that relationship...up until now.

by IT GUY | 25th Mar 23, 8:22am 1679685758

the 2bdrm that sold in John Street Ponsonby sold below its last sale in 2017

by Zachary Smith | 25th Mar 23, 8:29am 1679686147

Yes that was a nicely presented cute little villa in Ponsonby that sold for 1.32M which was 780k under CV and 52k below what the vendors apparently paid for it in 2017.

Nice brick and tile places with internal entry double garages in the outer suburbs still seem to get top dollar perhaps reflecting the demographic that buys these sort of places.

Anything requiring work, is a bit shabby or suspect, even in good areas will generally take a hammering or have no interest.

Some new houses are getting offers but much lower than what the sellers are hoping for.

by IT GUY | 25th Mar 23, 8:39am 1679686793

agree your views, I think the fall will have to accelerate to clear the overhanging stock, many will require a large haircut as there is just no interest when maintenance has been neglected for so long.... funny these guys where getting top dollar from developers in 2017, painful lesson.

by Chaosinflesh | 25th Mar 23, 9:32am 1679689927

And if they were paying capital, and renting it out [dunno how accurate it is, RentPrice says it ws 825/week in May 2022], then they're still probably ahead, even with the capital loss.

by Zachary Smith | 25th Mar 23, 4:12pm 1679713928

That is a good observation. Why should a house be worth so much more five years later during a period of low inflation? In fact houses should only go up at about the same rate as the average wage. During that time the house can be rented out or lived in and earn its keep. Unless people like boom and bust cycles I guess which is inevitable if house price inflation becomes ridiculous.

by nguturoa | 25th Mar 23, 9:09am 1679688565

In NZ there is no going down of property now unless the mindset changes and in this age and time, it will never happen.

In any place, life is good if there are more people who think before they do their actions. And there are people who like to help others and also people who serve others.

But we only have sellers in this place and in the world now. We live to sell everything and that's the motto of life in this age. We sell ourselves, we sell our relationships, we sell our community, we sell our dignity, we sell our country.

Sold!!!!??

by Zachary Smith | 25th Mar 23, 9:16am 1679689019

You're not wrong. Our world depends upon buying and selling things constantly.

by HW2 | 25th Mar 23, 10:11am 1679692296

Cost of living: Tauranga job market hit by high rents, unaffordable houses in competition for staff

https://www.nzherald.co.nz/bay-of-plenty-times/news/cost-of-living-taur…

The doomies think this crisis will all be solved by second hand houses falling in price

Under that arrangement who is going to build new. My mate is, but his estimate is 8 figures, thats over 10m for a few small apartments. Then the land cost.

Woah hold on there Tonto

Sorry the article is Premium, I think you get the gist of it

by IT GUY | 25th Mar 23, 10:36am 1679693815

The crash sets up the next boom HW2, you are finally learning the cube... its just that the crash has not played out.... if it doesn't then there is no boom, its a war of attrition between investors/banks/IRD. From all the talk in res construction, its favouring crash as NO ONE is starting new projects rather sit and watch.

by HW2 | 25th Mar 23, 11:03am 1679695406

You seem to like my references to the cube 👍

I will put my mind to work and come up with some more analogies which might earn me an upvote

by Retired-Poppy | 25th Mar 23, 11:29am 1679696963

HW2, one lonely cherry does not an orchard make🍒

by HouseMouse | 25th Mar 23, 11:41am 1679697686

‘Who is going to build new’ - an obviously shrinking number, as I have been saying for more than 1.5 years.

by HW2 | 25th Mar 23, 11:55am 1679698516

Apart from the govt. There are probably many who want something new thats to their tastes.

by HouseMouse | 25th Mar 23, 12:11pm 1679699464

They only build about 5-7% of all new housing.

If the private building sector slumps - which it is - there will be carnage.

It seems NZ learnt nothing from ‘06-‘08.

by Juzz | 25th Mar 23, 1:06pm 1679702807

With a reduction in demand, will prices follow? Construction cost increases have been relentless in the past few years, won't we just find a new equilibrium state? Slumping land prices will also make a new build still viable.

by Nzdan | 25th Mar 23, 1:47pm 1679705245

Apparently there's just a token margin applied to all construction elements/products, no price gouging is happening.

Despite house prices exploding over the past few years, honest manufacturers such as Winstone Wallboards and Carter Holt Harvey have defied shareholder dictatorship and kept wholesale prices at a strict cost + slim margin. There's no way we will see Timber and Plasterboard prices retreat.

by HW2 | 25th Mar 23, 3:02pm 1679709747

Ha. All of the buyer co-op cards for landlords etc, get hefty discounts on timber products at the merchants. That's the one area that seems to be loaded. The trade rates for trade accounts and quotes will be getting considerably more.

It's the same for electrical merchants, plumbers and paint companies that deal with both trades and retail customers. I once was getting 60 percent discount at my favourite paint supplier. Even today on a standard cash account I get 35 pct off. But the public go in and get robbed.

Build a home with labour only contracts if you can

by HouseMouse | 25th Mar 23, 2:49pm 1679708975

Land values aren’t such a significant factor for medium density development. Construction costs are a much bigger factor.

by Nellbell | 25th Mar 23, 3:17pm 1679710637

Agreed, even if land price comes down a few hundred thousand, build costs will remain the same.

Still leaves a huge and increasing gap between cost to build and cost to buy an existing house - not in favour of the new build. Why would you build a house now; if by some unfortunate change of circumstances you needed to sell, you are loosing money as soon as you take possession of the keys.

by HouseMouse | 25th Mar 23, 3:20pm 1679710829

Slumping land values also create another issue - the value proposition of a townhouse on a postage stamp sized section versus a house on a full section.

If a house on a 600 square netre section in Manurewa drops from $1.4 million to $900k then a developer buys the site and is building and selling a tiny 2 bedroom townhouse for say 800k. Not a good value proposition relative to a house on a full section. As compared to the market peak when the value proposition was much better - a 2 bed townhouse for say 850k versus a house on a full section at $1.4 million.

by CrispyKahawai | 25th Mar 23, 10:44am 1679694293

A house in Sandringham (27 Coyle) was bought for $2.56million in October 2021.

It's RV is $2.225million.

Homes.co.nz estimates it would sell for $2.16million...

...It sold at auction a couple of days ago for $1.611million.

by Zachary Smith | 25th Mar 23, 11:07am 1679695633

Mortgagee sale. Quite newsworthy though.

by Ahuhyeah | 26th Mar 23, 9:01am 1679774478

Mortgagee listing count via seach trademe

October = 26

March 4th = 28

Today = 37

Anomaly or trend, to be determined.

by HW2 | 26th Mar 23, 9:50am 1679777454

St Mary's Bay mansion goes for $11.5 million in mortgagee sale | Stuff.co.nz

https://i.stuff.co.nz/life-style/homed/300772690/st-marys-bay-mansion-g…

Mort sale or slick marketing ?? Unless you accept every word

by Nellbell | 25th Mar 23, 11:22am 1679696525

Gosh that house has spent most of the last two years on the market…… sold and resold. Are these type of properties homes or just houses being flipped?

by IT GUY | 25th Mar 23, 12:54pm 1679702071

If you could have got the corner site as well you would have been able to put a massive number of units on the 2 combined..... it sold for $4183 per sq m at the top, now its sold for $2632 per sq m, which right now seems about right for a development site... IMHO still expensive but what they are going for in AKL. Check out who holds the corner site....

by HW2 | 25th Mar 23, 10:59am 1679695191

Thanks editors for the clean out

by IT GUY | 25th Mar 23, 12:55pm 1679702111

bugger i missed it doing real work....., was there a peeing contest?

by HW2 | 25th Mar 23, 2:45pm 1679708738

Strange as you were the first one commenting. Under your IT GUY persona

by HW2 | 25th Mar 23, 2:49pm 1679708955

by aucklandproper… | 25th Mar 23, 9:00am

403 Access denied You are not authorized to access this page

That didn't take long to get the chop

by HouseMouse | 25th Mar 23, 2:57pm 1679709468

I wish they would get rid of perennial trollers too.

by Zachary Smith | 25th Mar 23, 3:36pm 1679711807

One man's troll is another's prophet.

by Zachary Smith | 25th Mar 23, 3:02pm 1679709759

aucklandproper... seemed like a nice person with a valid viewpoint.

by agnostium | 25th Mar 23, 6:12pm 1679721154

If you checked his profile he had his business contact details and a spiel offering property services.

by Slapheid | 25th Mar 23, 3:01pm 1679709705

I don't know why you are cheerleading the admins HW2 and HouseMouse. You both are consistently engaging in purile, tit-for-tat exchanges in the comments sections.

It is boring, and adds nothing to the conversation. Maybe you guys could setup your own WhatsApp group, or take it offline entirely?

by HW2 | 25th Mar 23, 3:10pm 1679710211

Btw I was not the one engaging in snipey and paranoid comments on a sunny Saturday morning, that all got deleted. Theres no need to get angry and no need to pull me into it thanks.

by Zachary Smith | 25th Mar 23, 3:35pm 1679711734

It was a bit weird cheering the elimination of aucklandproperty... as they could provide some much needed sensible input around here.

by HW2 | 26th Mar 23, 8:33am 1679772822

I found this article from www.oneroof.co.nz that you might be interested in: https://www.oneroof.co.nz/news/43296

2m above 2021 CV, is this worth cheering ??

by Zachary Smith | 26th Mar 23, 11:54am 1679784843

It's a bit of an outlier being 8058m²

^{A link in that article goes to another article about a million dollar loss in Sandringham.}

by HouseMouse | 25th Mar 23, 3:23pm 1679711015

And I wonder who usually starts it off?

I am trying my best to ignore it :)

by HW2 | 25th Mar 23, 3:57pm 1679713022

No comment. Haven't you recorded that you say the opposite. Btw, Your comment above that starts "Slumping land values also create another issue" I agree. Now lets move this on

by IT GUY | 25th Mar 23, 6:52pm 1679723555

mmmmm read through 17 new comments that also added no insight..... Hey the #LossPorn guy was entertaining but Blind Freddy can see this is occuring, even Oneroof and real estate agents.... Your house is worth what the Land is worth plus the improvements..... land being the biggest piece and from recent observations a 4180 to 2600 drop per sq m in akl.... i see this as about a 39% fall in the city of sales for dev sites.... this indicates there is very little buying going on.... if we are already 39% off then we can easily see 50% off

by Averageman | 26th Mar 23, 8:20am 1679772041

Yes the overshoot on stupidly cheap debt is coming home to roost for many.

by IT GUY | 26th Mar 23, 8:13am 1679771604

https://www.nzherald.co.nz/nz/omaha-bachs-are-rising-interest-rates-mea…;

by Averageman | 26th Mar 23, 8:23am 1679772234

Would say this is not just Omaha. It will be any popular holiday town bloated on cheap debt and the panic of covid. Picking this is where the mortgagee sales will get going first. Most will dump the bloated bach before the family home.

Time to spell "negative leverage"

by IT GUY | 26th Mar 23, 8:35am 1679772950

Would have felt good costing $1k a week in interest but making 10k a week in cap gain on the way up..... now not so much....

by Crazy Horse | 28th Mar 23, 12:53pm 1679961192

" Auction activity is slowly but steadily declining as the housing market comes to the end of the peak summer selling season" ............well, you have to ask the question - Did it ever really start to "wind up" ?