One third of homes sold under the hammer at Barfoot auctions last week

Property

Auction results: 30% sell under the hammer but nearly 40% got no bids at four major Barfoot & Thompson auctions last week

6th Dec 16, 5:02am by Greg Ninness

Barfoot & Thompson's confirmation that Auckland's residential property market hit a turning point last month was also reflected in the four major auctions the company conducted last week that were monitored by interest.co.nz, with more properties failing to attract any bids than were sold under the hammer.

One hundred and sixty residential properties from across the Auckland region were put up for auction at the four events last week, which were conducted at Manukau, on the North Shore and at Barfoot & Thompson's flagship CBD head office auction rooms.

Of those, 48 (30%) were sold under the hammer and the remaining 112 were passed in for sale by negotiation (see table below).

Sixty three of the properties that were passed in did not receive any bids, which was just under 40% of the total number of properties auctioned.

The clearance rate (the percentage of auctioned properties sold under the hammer) at the four auctions covered by interest.co.nz last week was the same as the 30% clearance rate reported by Barfoot for the whole of November.

Interest.co.nz does not cover Barfoot & Thompson's smaller auctions such as those conducted on site, or their larger Thursday afternoon auction in Auckland's CBD.

Barfoots reported selling another 20% of auctioned properties within 24 hours of the them being auctioned last month, which meant half were sold within a day of them going under the hammer.

The full results the four Barfoot auctions covered by interest.co.nz last week, with the details of all properties auctioned including those that didn't sell, and the prices achieved on those that did, are available on our Auctions/Sales Results page.

**Barfoot & Thompson's residential auctions monitored by interest.co.nz last week**
Venue	Number auctioned	Sold under the hammer	Passed in	Number receiving no bids
Manukau Sports Bowl, 29 Nov.	36	9	27	12
34 Shortland St, Auckland CBD, November 30	65	21	44	24
Bruce Mason Centre, North Shore, December 1	32	6	26	16
34 Shortland St, Auckland CBD December 2	27	12	15	11

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39 Comments

by gordon | 6th Dec 16, 7:04am 1480961063

This is great news for FHBers and alike. They should hold off though as it is only the start. With JK gone DTI's are an ever increasing likelihood for investors.

by NissanGTR | 6th Dec 16, 7:28am 1480962536

25% clearance rate at Manukau.

The ship is sinking

by Groen_mamba | 6th Dec 16, 7:36am 1480962976

18% clearance North Shore! Scuttled ship more like

by sharetrader | 6th Dec 16, 7:42am 1480963327

why would you auction and pay the fees when your chance of a good result are so diminished.

by sammnz | 6th Dec 16, 10:17am 1480972670

Perhaps they committed to an auction a while ago.

by THE MAN 2 | 6th Dec 16, 7:46am 1480963572

DTI will not only be for investors!
It,will mean that anyone that isn't already a home owner will not be able to,enter the market unless the multiple is at least 7

by sharetrader | 6th Dec 16, 7:52am 1480963973

or house prices fall back to the historical range,

by nymad | 6th Dec 16, 8:09am 1480964988

Yea. I doubt he can piece the logic of that together, though..

by THE MAN 2 | 6th Dec 16, 11:02am 1480975361

Wishful thinking if u believe that houses will drop dramatically.
Banks won't allow that to happen

by Kate | 6th Dec 16, 11:22am 1480976572

Banks won't allow that? Those left standing were the ones that profited most from that collapse in the US.

by gordon | 6th Dec 16, 11:40am 1480977601

LOL. How will they do that if more sellers hit the market compared to buyers. Do they refuse to discharge the mortgage even if the property is sold? That in itself would cause a few issues. No the banks have no control at all if it becomes a sellers market. Fear takes over. Fear of things will get worse for sellers and we all know what fear does. It causes sellers to accept big hits whether it be property or shares.

by nymad | 6th Dec 16, 12:01pm 1480978916

Yep, it doesn't make much sense to hold negative geared property if there is no expectation of capital gain.
Especially once your cost of capital increases.

Unfortunately for The Man, I don't think the banks get a say in this.

by rastus1 | 6th Dec 16, 12:21pm 1480980098

..needs to take some pills i think.

by Zachary Smith | 6th Dec 16, 12:29pm 1480980548

THE MAN 2 has always claimed he has positively geared property. There are also degrees of negative gearing. If someone is only feeding in a couple of hundred dollars a month after years of capital gain across the portfolio it is quite sustainable. And who can look into the future? Prices may go up as well as down. Prices go down and then they go up again. A property that is negatively geared may be kept because of its good location and a positively geared property may be sold later to shift that negatively geared one into positive territory. There are a lot of possibilities. Property isn't really like share trading.

by nymad | 6th Dec 16, 12:51pm 1480981886

That wasn't directed at The Man, it was directed at the negative geared people in the market - of which there is a substantial amount.
An observation of circumstance, if you will.
I was reiterating Gordon's position of why prices rapidly deteriorate.

"If someone is only feeding in a couple of hundred dollars a month after years of capital gain across the portfolio it is quite sustainable."
Forgive me; isn't that exactly what I said?

Property is definitely much different to share trading. For one, it is considerably harder to leverage optimal positions.
It's the simple man's investing. Hence why we have so many incentives for it in nz.

by Zachary Smith | 6th Dec 16, 1:08pm 1480982921

..isn't that exactly what I said?
Not sure about "exactly".
I too was pontificating towards the wider audience.

by rmnz | 6th Dec 16, 1:04pm 1480982643

Of course they're different beasts but essentially isn't it the same principle with shares that holding through the bad period(s) may ultimately be the right thing to do depending on your investment needs & risk appetite?

I don't think the pain will be felt by the established well geared PI's (which The Man and yourself Zach seem to be) but rather the amateur latecomers with a hugely geared single egg basket

by gordon | 6th Dec 16, 1:05pm 1480982735

Pretty easy to do that in Christchurch (if it is in fact the case) because of its relatively low pricing. Auckland is a different story. Many having joined the Casino in recent years and their gearing is high and the numbers are also high. It now all depends on how many will want to sit there with diminishing values and the usual rent payments to the Bank having to be made.

by BadRobot | 6th Dec 16, 5:08pm 1480997335

I wouldn't buy in Christchurch either - currently 1997 properties for rent.

by OpenPensionResolutn | 6th Dec 16, 8:55am 1480967709

We haven't "hit a turning point". We've run aground.

Unfortunately, with the ship foundering, our Dear Captain is proving to be more Costa Concordia's Schettino than Titanic's Smith.

http://www.telegraph.co.uk/news/worldnews/europe/italy/9020679/Costa-Co…

by ian64 | 6th Dec 16, 9:17am 1480969026

LOL great connection, I think it's exactly what he did. As a Forex trader he is very good at feeling the trends, and I think a lot of overleveraged people will do well to follow

by ham n eggs | 6th Dec 16, 9:55am 1480971309

Rats always leave a sinkng ship first

by Zachary Smith | 6th Dec 16, 9:22am 1480969330

30% selling "under the hammer" is quite good considering. Another 30% likely sold after the auction. I would be confident that a good property in a good location had an excellent chance of selling at the current homes.co.nz estimate.

by CJ099 | 6th Dec 16, 10:01am 1480971669

I'd still say it is a significant drop in auction sales if you look at the auction sales stat from say six months ago.

by kemistry | 6th Dec 16, 10:03am 1480971830

I'd prob have to agree .. Admittedly its hard to see the wood from the trees at the moment but if i were to call it, average and medians will drop a few percent over the coming 2 months but will return back up in as summer closes out. In the interim, solid houses in good neighborhoods will continue to prop things up

by Kaper2 | 6th Dec 16, 10:39am 1480973972

The problem is 90% are not good properties and are not in good locations.
Good properties in good locations are still being picked up by cashed up offshore buyers, ching, ching.
I mean 'investors' were paying $800k plus for ex statehouse dumps in Manurewa and the likes only a few months ago. I'm sure a few of these investors are feeling a bit green currently.

by Zachary Smith | 6th Dec 16, 12:40pm 1480981238

Yeah I am probably only looking at this from my own position. I did note, some months back, that I thought prices in the outer suburbs had inflated by too much. While central had only increased by 20 to 30% over CV many places out South and West were going for 60 to 100% over CV.

by Sluggy | 6th Dec 16, 1:17pm 1480983459

Id say the outer suburbs and outside of AK are inflated. Inner suburbs probably are to but maybe they'll hold together better. Will be an interesting year or two ahead.
Hopefully people turn to investing in growth creation rather than swapping bits of dirt.

by BadRobot | 6th Dec 16, 5:14pm 1480997657

While I have no reason to doubt that some will sell after being passed in , I have no reason to beleive that they will sell either. As I've said before the devil is in the detail.

I'm more interested in why people are worried about house prices declining - they go up, they go down like any market. Perhaps people think it is the only means of wealth generation......

by Zachary Smith | 6th Dec 16, 1:24pm 1480983844

TradeMe listings for Auckland are still continuing to drop. Now down to 9,263. It is kind of interesting. Dropped by about 500 in the last couple of weeks which is ~~20%~~ oops 5%!
My prediction (I am usually right) people are hunkering down. This is the good thing about property, it's not easy to sell, easier to hunker down. It's the Kiwi way. Hard to panic sell like it is with shares.

by mfd | 6th Dec 16, 1:09pm 1480982969

Traditionally, lack of liquidity is seen as a drawback, and usually attracts an increased yield to compensate. Interesting to see how property investors think.

by Zachary Smith | 6th Dec 16, 1:38pm 1480984719

Yes, though property usually has yield plus capital gain in the long term. There is a significant human factor and contrary to popular belief landlords are not happy about evicting tenants to make or save a buck. There are often rental contracts in place as well as fixed term mortgages to consider. You can sell with a tenant in place but this can severely impact the selling price. I've noticed houses with Housing Corp contracts for sale with prices well below what you would expect.

by CJ099 | 6th Dec 16, 1:50pm 1480985420

I'm guessing that you may see a flood of property coming on to the market in the next few months in the Auckland area particularly for North shore. This will be due to the belt tightening = mortgage restrictions over in China since they're clamping down on capital flight, hence why we've already seen a drop in the market and that is likely to get progressively worse if Trump has his way and makes trading more difficult for China.

by rastus1 | 6th Dec 16, 2:22pm 1480987340

2yr holding limit maybe? Those still within this period have most at risk..too late for the real gains, but might just make a few bucks if the market stay up while they wait. Sell now and get taxed on the gain...wait xx months and keep it all....but if any? Gambling.

by CJ099 | 6th Dec 16, 3:20pm 1480990854

Yes you could well be right, though look at the figures for North shore, I wouldn't be surprised if there was some panic selling in the next six months.

by BadRobot | 6th Dec 16, 5:22pm 1480998127

Bloomberg had an article about Chinese leaving Vancouver to buy in Seattle or Toronto. One Chinese business man was selling in Vancouver to buy in Toronto - the impression was given that he didn't like the changes that were happening in Vancouver. Makes me wonder if a similar situation may arise here - the market turns so cut and run. An additional comment was that the Chinese like the higher end properties so any run of the mill were not of interest to them.

by rmnz | 6th Dec 16, 1:09pm 1480982995

The major disadvantage is the amount of time it can take to sell property from the point when someone realises they can't sustain their position. If you need cashflow fast property can be problematic. Interesting to see the volumes dropping off, I wonder if its seasonal or as you say, people hunkering down.

by DDH | 6th Dec 16, 7:01pm 1481004090

We were selling in Shortland Street last Wednesday. I'd describe it as insipid. We were selling a reasonable villa, cross leased on 400. Presented well. We had 4 bidders and it went for 70k over the amount we would have taken.
So there is still life out there but you have to work for it. We also felt like we had dodged a pretty large bullet.
We've bought a 4 bedroom that we will knock down in a few years on 860 square metres in Waterview. Probably paid to much but not fussed as we will be living there a minimum of 10 years. Property is always long term.
We sold our rental 2 years ago which was another character home and that went for 50k over estimate and bought a business which will now fund the new build.
So, there is always opportunity out there and I expect to do better over the next few years just by sticking to the knitting. I never expect the sky to fall on my head, nor that a massive windfall is just around the corner. Have lurked on these pages for a number of years and frankly some of the pontificating and predictions are both depressing and not logical.
If you buy a decent house you wiĺl sell a decent house, you just need to sit back and wait for the right time. It definitely feels like a great time to be low balling and something will land in your lap right now.

by Abrielle19 | 28th Feb 17, 7:53pm 1488264812

Its not surprising that these homes are all auctions and a lot of people were able to afford them. Writers from Write my essay online review are actually eyeing these homes as one of their investments.