The late winter auction activity level was a little more elevated in the August 26 to September 1 week.
In fact there were 20% more properties coming under the hammer this week compared to last week, with a total of 237 in the auctions we monitor. The clearance rate rose marginally to 48%.
In Auckland the clearance rate improved to just over half in the 185 auctions monitored. But it was tough getting agreement on prices at or above council rating valuations. Only 16% of those that sold achieved this, little-changed from the prior week.
Outside of Auckland, auction activity was minimal and predominately in Christchurch where success was lower than recently, but those that did sell tended to reflect council valuations closer.
Auction activity is still not a preferred method of selling. Vendors are increasingly having to meet buyer price expectations, and price discovery via auction can be a brutal awakening for sellers. But the market via auctions showed very few of the 'green shoots' that the industry has been talking up.
This past week was the final set in the traditional winter selling season. Sellers and agents will be hoping 'spring' starts to bring out more motivated buyers.
Details of the individual properties offered at all of the auctions monitored by interest.co.nz, including the selling prices and rating valuations of those that sold, are available on our Residential Auction Results page.
[Greg Ninness is on vacation.]
73 Comments
Related to low auction results in NZ, here’s a recent video on the subject of Canada’s epic housing bubble. It may be of interest to us due to many parallel factors both countries have in common: https://m.youtube.com/watch?v=n6gqHRPR29M
Canada’s bubble has arguably been exacerbated due to foreign investment, so the Chinese meltdown is mentioned. Speaking of China, I see a major trust-investment company is probably going bust, involving billions. Things seem to be unravelling economically at speed over there. To what degree it’ll affect us in unclear, but I wouldn’t be feeling optimistic if I were a property speculator.
Short term is the appeal of the sugar rush of extra pieces of fiat currency by taxing foreign buyers.
Long term is the continued loss of land to overseas buyers, making the land that much more difficult to access for future generations of New Zealanders.
Until National change their pro-housing ponzi policies, I will never vote for them.
Right on que - any sign of strength and FONGO driven sellers will come out in force, swamping buyers with choice. The following well known Spruiker is living proof. Rather than reap his predicted gains, he lists now and by way of an unpopular method (auction) too....its purely FONGO folks!
by wingman | 1st Sep 23, 11:26am - "I've just listed a brick and tile house with harbour views for auction in a great spot in Auckland".
FHB's consider making lowball offers from early next year. We haven't even had the real downturn yet.
Key comments are "price discovery via auction can be a brutal awakening for sellers". This is pissing weedkiller on the much publicised green shoots.
Higher rates for longer, and asset prices continue to wilt under reality of the weight of debt. There is plenty of noise that the stupidity of endless debt is starting to unravel overseas.
Crispy 🍿
@Albert2020, well done buying a house, you might not be a twat, however what you say does not make sense, why would you like you investment to lose money? It does not make sense well economically it does not, Pretty sure no one on here is a self-centred twat, I guess we just all trying to get ahead, which i think is sensible. Would you also like your kiwisaver to go down? would you like to be paid less for the trade you hard earned, or is your comment just centred on property? When you old and rely on other people paying for you and become a leach on society and cant financially support yourself now that might be a "twat"
You don't need property prices to increase like they are to get ahead. You could have no increase, but money pays off house and you live rent free, or house prices increase with your income.
You can also leverage your house to purchase business or follow a number of other paths. Property as it stands is breaking the back of all NZers and future NZers.
Its very difficult for a single person to buy a house on their own. There are several options of buying with another or through govt partner.
All the best for your bro, its not necessarily reasonable to say he should have what others have worked for at half the price.
@the Joneses, yes i have kids and divorced, i did it for them so we have a house to live in. We live in a two bed so they share a room, money is tight however instead of buying a bigger house i bought an investment property also a two beddie to ensure a better future for them. I think it is about perception, your compassion is good however dont let that sound like your compassion is a cloak hiding a dragon underneath it. How low do you want your house value to go before you think it is now at the right price? it will never be low enough.
We have one of the most expensive properties markets in the world. If we could go back 10-15 years that would be much more manageable. To suggest I am talking that houses should be free is a bit silly.
How about we have a country where you don't have to buy someone else's house to be sure your kids can buy their own house? If not, why would our kids want to stay here? There are plenty of other places easier to live.
Lucenera, that is lovely there should be more people like you can you monitise that? it is an important question, because if you cant you need to rent and rent is going up. You can own a house a car and still be empathetic, i would argue you can assist more if you have spare cash. the word empathy followed by sociopaths on a two line threat makes me think you empathy is hiding something
Why assist, why not have people look after themselves if more people own homes and less disposable income is going on houses. Fifteen years ago houses were affordable for everyone.
My disposable income is going on building passive income and business.
It's this thought that property is only way to get ahead is creating a country where we cannot differentiate our services and business to grow a global scalable economy. Let's just rip of NZers and leave future generations with mountains of debt. Luxon with his $16 million portfolio shows how simple he thinks about creating wealth. Let's just buy houses, manipulate the market and watch my portfolio grow.
Once again, I find myself pondering a fundamental question: Is it truly justified for our nation to maintain such exorbitantly high house and land prices?
What underlying reasoning supports this situation?
In spite of our country's modest economic status, we grapple with subpar housing standards marked by issues like leaky homes, the use of brick cladding purely for aesthetics, homes plagued by cold and mold, and outdated joinery. Even with these shortcomings, the average housing price remains just shy of a million dollars.
Our wages remain depressingly low because we lack innovation and primarily engage in small-scale welding for the Chinese market, which is experiencing its own economic challenges.
Yet, there are those who cling to the belief that their property values will double, driven by greed, unaware of the precipice they might be approaching.
God save NZ
Once again, I find myself pondering a fundamental question: Is it truly justified for our nation to maintain such exorbitantly high house and land prices?
What underlying reasoning supports this situation?
More people fighting over a diminishing amount of constrained land
It's really expensive to have kiwis build things like houses (or anything really)
A better thing I like to ponder is, in a global market, how much longer can our way of life run on the fumes of those that came before, and the relative technological superiority our culture used to have over much of everyone else.
What underlying reasoning supports this situation?
Perhaps. It is also possible that the reasoning for this is that it supports the debt.
And the reason was always about the debt.
If we had only sorted things properly in 2007, we wouldn't have this super Bull Trap that we have now.
Rates higher for longer.
The problem is Ngu, that successive governments have legislated so that there is such a high bar for subdividing land and building costs that new housing supply is horribly expensive. There is no getting around this unfortunately. The housing that we think is expensive will not drop any further- short of a much bigger economic shock than we've already had. Perhaps an analogy is that in NZ a house costs the price of a Lexus(fault of govt), but we only have a budget for a Toyota.
Harvey, I do not often agree with your spruiking posts, but you are dead right regarding how hard it is to subdivide land here. Then there is how unstable the land is, and the retaining drainage and earthworks required. Finally the cost of materials and build cost all with 15% GST on top of it, add in developer contributions for surrounding roads and infrastructure.... while I agree that the production cost is limited in downside if this is not address, the upside is limited by affordability and with cost of living crisis, I cannot see much upside from here. Assets do fall below their fair value at times of intense recession, House prices in NZ are still way above fair international value for a home, hence NZers are leaving for better lives offshore where they can access a house for a reasonable % of there after tax pay... we have blown up this bubble and must now live with its deflation, its actually been very quick so far, another 4 years and it will be done, we will be sitting between 35-50% below peak depending on type of house, ie land -50% but decent house down 35% from peaks. Hope will not help, this is a reallocation of capital based on risk, the free printed money did not care about risk, but my savings do.
I too ponder the madness of it all. Boiling it down to fundamentals, we’ve normalised speculating on a basic human need; shelter. For a society to thrive, you want to avoid such behaviour.
Historically, humans have speculated on other basic human needs, such as food stockpiling during times of wars and sieges, in the hope that food prices would rise. These speculators were (understandably) seldom fondly looked upon.
In the 21st century, we are not as sophisticated as we’d like to think we are, repeating the greed-themed errors of the past.
Never take false refuge in the belief that the free market can magically take care of all human needs.
In some cases, such as the African slave trade of slaves/sugar/rum - the free market at its purest - was responsible for immense suffering until it was regulated away.
Why not? Hawaii have managed it, most expensive State to live in the US. The median house price is US$852k. The "living wage" for a Hawaiian worker is US$112k, whereas the US median wage of $57k covers the living costs in 30 other US States.
If "Aotearoa" wants to compete with Hawaii for being an Pacific Island tourist attraction with nice mountain scenery and dancing natives whilst producing little else, then that's our future. Hawaii sells off real estate to rich people too - just that they don't have to look as far to find buyers.
If you purchased this week the chances are that property will probably be worth around 20% less this time next year the same as the people who purchase last year who are now down 20%. The housing party is over investors are leaving and why not when you can earn 6% on a term deposit, with China in trouble money invested over here will be pulled out very quickly many dodge deal’s will be exposed.
Again Pa1nter your incorrect I said 50% drop from top this is looking spot on over next few years, if world turndown continues house price’s could take a even larger tumble. Hope you managed to see a financial advisor because we are only in second trimester of downturn and still a way to go and with your mindset of rates will not go over 3% and house price’s will never go down. a 20% to 25% has now already occurred and mortgage rates are 7% at best you are still talking nonsense wake up the zombie apocalypse is not here yet.
One day Pa1nter you will understand housing market trends how it relates to rates, inflation, average incomes. Its so obvious that price are way out of reach for young couple this is why the crash will deepen, try reading others comments on here you will learn a lot. I can understand if you are highly leveraged go see that financial expert maybe he can show you using a abacus so you understand
There's plenty of parts of the world where average incomes don't buy houses, and house prices are high.
We created a cultural identity of home ownership from after WW1/WW2, with government assistance, that some people assume as a perpetual given.
The crux of your much repeated posting is average incomes can't afford homes. This is a truism, and there are benefits to people owning homes, but for "affordability" to improve, there needs to be a significant change to fundamentals around house creation and financing for 'average incomes' that is no where in sight. In places where markets crash, and stay low, usually the working population have lesser outcomes, not better ones.
Anyway, as you were with your percentage picks.
While it is correct that house prices have dropped 20-25% in Auckland and Wellington, in most places the drop in value has been 10-15%, with the exception of Queenstown having increased values.
Fixed term interest rates with the banks are 6% at best, and 7% at worst.
An improvement on last year, sales rate was 28%... https://www.interest.co.nz/property/117395/slight-lift-number-propertie…
Just a reminder that since April, the 2018 buyers are coming out of their Brightline lockup, ending the 5 year period where people who bought houses couldnt sell them again. Just wait to see the flood of listings if National win and the Brightline is scrapped for everyone who bought before June 2022. Interest rates are not due to go down significantly until 2025, so it would be extremely ironic if National ends up presiding over a collapse in house prices due to investors and second home owners selling in the next 18 months.
Only the overleveraged investors will be selling. House prices will start to increase post-election, but at a low rate such as 0.5% per month. Interest rates will remain at 6-7% for the next few months, but likely OCR reduction mid-2024 due to the recession (which Mr Orr brought on the country deliberately).
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