More on offer but residential auctions remain hard going for sellers

Property / news

Motivated buyers are still hard to find in residential auctions even though 20% more properties were on offer this week

2nd Sep 23, 6:00am by David Chaston

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.]

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73 Comments

by Sam Bridgman-Smith | 2nd Sep 23, 7:11am 1693595510

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.

by Blackbeard | 2nd Sep 23, 7:35am 1693596902

On top of that, you have new generations that won’t have the $ to buy at these crazy elevated prices, hence why 7 house Luxon wants to open the market to foreign buyers.

by Sam Bridgman-Smith | 2nd Sep 23, 8:20am 1693599657

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.

by ACB | 2nd Sep 23, 5:56pm 1693634168

Nice youtube with many parallels to NZ. Not sure why Mikail Gorbachov featured though.

by Retired-Poppy | 2nd Sep 23, 7:38am 1693597097

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.

by Averageman | 2nd Sep 23, 7:28am 1693596497

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 🍿

by Harvey W | 2nd Sep 23, 7:22am 1693596139

Nope, prices will be rising this year- probably already are.

by Averageman | 2nd Sep 23, 7:33am 1693596838

Ok. Then leverages yourself up. I think the largest global everything bubble still has some flatulence like noises to make.

by safeashouses | 2nd Sep 23, 8:23am 1693599836

@ Averageman when are you buying? I am reading all your posts and I am waiting for you to tell me when the market is ready? I was just like you many years ago, then I bought a house, now my outlook is different

by Pa1nter | 2nd Sep 23, 8:27am 1693600044

Averagemans built 8 houses, not a concern for him.

Although that would make him slightly-above-averageman

by Zwifter | 2nd Sep 23, 10:19am 1693606771

Funny that, it happens to everyone 10 years after they buy a house, you move out of the DGM camp. Its the same people on here still telling you not to buy a house 20 years later because they cannot find the door that's clearly marked EXIT.

by the Joneses | 2nd Sep 23, 11:30am 1693611046

I have owned a house for 10 years. I hope house prices go down. I have kids that will need to buy one one day.

Do you have kids? Aren't you concerned they will be renting their whole lives or stretched to breaking point with a huge mortgage?

by Nifty1 | 2nd Sep 23, 12:56pm 1693616186

It's easy to say that when you've owned for 10 years and have plenty of equity to burn...

by Albert2020 | 2nd Sep 23, 3:18pm 1693624728

I bought two years ago. I have kids and a younger brother who works in the trades who will never be able to afford a house at these values. I welcome house price declines because I’m not a self-centred twat.

by agnostium | 2nd Sep 23, 5:01pm 1693630906

Love this!

by interesting1234 | 2nd Sep 23, 6:19pm 1693635569

Raw and real, Albert2020 perhaps you should get into politics, you might be the only honest one there!

by safeashouses | 3rd Sep 23, 6:38am 1693679901

@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"

by swapacrate | 3rd Sep 23, 9:49am 1693691391

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.

by swapacrate | 3rd Sep 23, 8:02am 1693684961

🤣 We are in same position. I want all NZers to have less disposable income funneled to banks and overseas shareholders. That money is better spent on NZ business, children's health and just all round quality of life.

by sammnz | 3rd Sep 23, 6:14pm 1693721683

Easy for you to say, if house prices declined 50% would you be forced to sell?

by Flying high | 3rd Sep 23, 6:31pm 1693722697

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.

by safeashouses | 3rd Sep 23, 6:26am 1693679174

@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.

by the Joneses | 3rd Sep 23, 7:43pm 1693727025

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.

by Pa1nter | 3rd Sep 23, 7:50pm 1693727431

You can rent a nice 2 bedroom house in Northern Thailand for $120 a week.

But then you won't earn NZ level money there.

The systems against you pretty similar most places.

by lucenera | 2nd Sep 23, 12:29pm 1693614551

For some of us, success isn't just about material gains—it's about community, empathy, and leaving the door open for others, not just finding our own way out.

But yeah, sure, it looks like there are many sociopaths around.

by safeashouses | 3rd Sep 23, 6:54am 1693680848

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

by swapacrate | 3rd Sep 23, 9:51am 1693691501

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.

by Retired-Poppy | 2nd Sep 23, 7:36am 1693596973

Its where will they be by this time next year is more important (trend is your friend). With continuing fixed interest rollovers pushing many more to the brink, persistent high interest rates and unemployment still trending up - watch this space Harvey.

by nguturoa | 2nd Sep 23, 7:50am 1693597854

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

by Pa1nter | 2nd Sep 23, 7:40am 1693597231

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.

by GetFeeling | 2nd Sep 23, 4:04pm 1693627442

With worldwide reproductive rates dropping below replacement rates in most developed countries (including China and most parts of India) I doubt you'll need to ponder for much longer.

by Averageman | 2nd Sep 23, 7:39am 1693597171

Why indeed. Something about tax free speculation is my guess.

by Pa1nter | 2nd Sep 23, 7:43am 1693597396

Going by what house pricing is doing in places that don't have that, probably not as much as given credit.

by Retired-Poppy | 2nd Sep 23, 7:44am 1693597496

God save NZ.

by Pa1nter | 2nd Sep 23, 7:55am 1693598120

Someone waiting for that

Will be waiting a long time

by Retired-Poppy | 2nd Sep 23, 8:04am 1693598664

Never lose sight of hope as it comes in many forms.

by Pa1nter | 2nd Sep 23, 8:06am 1693598782

Usually most of it's derived from within.

Outsourcing fate to metaphysical 3rd parties has much lower efficacy.

by Retired-Poppy | 2nd Sep 23, 8:22am 1693599742

Oh - okay then. Without over thinking it, the main thing with hope is that it's followed closely with inner purpose and energy to contribute.

by Pa1nter | 2nd Sep 23, 8:22am 1693599732

Hope is just over there, out of reach

You can act with purpose right now, deploying cause and effect to it's full extent

by marewa | 2nd Sep 23, 8:20am 1693599636

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.

by Twitchbar@ | 2nd Sep 23, 8:34am 1693600488

God is not a Name

by interesting1234 | 2nd Sep 23, 6:22pm 1693635742

It’s dog backwards

by r.james | 3rd Sep 23, 4:34am 1693672459

whos he

by Joaquin | 2nd Sep 23, 8:05am 1693598710

...and yet the only ideas that some parties come with....Ntonal... is to protect and facilitate more unproductive business for their property speculators friends.

by Harvey W | 2nd Sep 23, 8:13am 1693599187

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.

by IT GUY | 2nd Sep 23, 8:40am 1693600810

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.

by Pa1nter | 2nd Sep 23, 8:43am 1693600983

"fair international value" is an interesting term.

Do you average out the high prices in most of the developed world with those in the 3rd and developing worlds?

Actually price to earnings ratios are often even worse there.

by interesting1234 | 2nd Sep 23, 6:24pm 1693635884

On that premise, surely theres a few well priced plots in Afghanistan you could look into (sarc)

by Sam Bridgman-Smith | 2nd Sep 23, 8:15am 1693599331

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.

by Pa1nter | 2nd Sep 23, 8:19am 1693599548

It's a market economy so the tendency is for everything to be driven by speculation.

Lands' never been any different, our ancestors came here on the assumption they could derive additional value from the place.

by Sam Bridgman-Smith | 2nd Sep 23, 8:27am 1693600056

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.

by Pa1nter | 2nd Sep 23, 8:29am 1693600184

I'm not advocating the free market, I'm just saying that's what we're living in. It's amoral.

We have just taken it as a given that it's the best setup given the constraints of human behaviour.

by K.W. | 2nd Sep 23, 10:26am 1693607169

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.

by Market Interest | 2nd Sep 23, 2:01pm 1693620094

Hawaii is also the meth capital of the US. Coincidence?

by GetFeeling | 2nd Sep 23, 4:08pm 1693627712

It's why the tourists keep coming back. They had such a great time there. And they never knowingly did any drugs.

by DTRH | 2nd Sep 23, 8:09am 1693598968

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.

by Pa1nter | 2nd Sep 23, 8:13am 1693599207

Didn't you say they were going to fall 80% 12 months ago?

Forecast is looking up!

by DTRH | 2nd Sep 23, 9:14am 1693602891

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.

by Pa1nter | 2nd Sep 23, 9:39am 1693604342

Pretty sure you said 80%.

I don't need a financial advisor thanks. I'm not an over-leveraged holder of residential property. I'm just way less optimistic than you about housing affordability improving.

by DTRH | 2nd Sep 23, 11:04am 1693609467

Try taking fish oil pa1nter as it seem your memory is degrading it must be hard having so many accounts and remembering what you have said but telling porkys is rather childish.

by Pa1nter | 2nd Sep 23, 11:37am 1693611464

How many different percentage predictions do you think you've made for house price falls?

Google says 6. Only 94 to go.

by DTRH | 2nd Sep 23, 4:25pm 1693628757

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

by Pa1nter | 2nd Sep 23, 10:15pm 1693649703

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.

by TronMVP | 2nd Sep 23, 11:32am 1693611123

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.

by Nifty1 | 2nd Sep 23, 10:08am 1693606117

An improvement on last year, sales rate was 28%... https://www.interest.co.nz/property/117395/slight-lift-number-propertie…

by K.W. | 2nd Sep 23, 10:29am 1693607380

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.

by Pa1nter | 2nd Sep 23, 10:17am 1693606638

The last change to National saw things hit the wall, so it wouldn't be out of the odds.

by TronMVP | 2nd Sep 23, 11:40am 1693611639

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).

by Zwifter | 2nd Sep 23, 12:58pm 1693616303

Quite a high probably of success on that prediction. Really it all hinges on who wins the election in October, the outcomes for 2024 will be quite different between National getting in or Labour getting in. I still see rates higher for longer.

by starrider | 3rd Sep 23, 12:47pm 1693702056

Why do spruikers wilfully ignore inflation, all the time?

Inflation has a long journey back to sub 3% I don't know when that will be, but I'm putting money on it that it won't be next year

by Blackbeard | 2nd Sep 23, 12:35pm 1693614945

Basically National are going to try and juice the entire property market. Lower end, reintroduce mortgage interest claiming for investors. Upper end, reintroduce overseas buyers. It sinks, but you have to expect that from a property pusher.

by Pa1nter | 2nd Sep 23, 1:59pm 1693619990

They have very few other levers

by Zwifter | 2nd Sep 23, 5:28pm 1693632482

Not sure about that, Labour already just tried that and it didn't turn out well for them.