Bayleys sells 40% at Auckland auctions

Property

Bayleys auction results: Muriwai bach sells for $841,000; Whitianga cottage goes for $430,000; Ellerslie unit fetches $445,000

10th Dec 16, 5:02am by Greg Ninness

Bayleys took 25 Auckland residential properties to auction over the last week and achieved sales on 10 of them, giving a clearance rate of 40%.

Properties that sold ranged from a one bedroom bach at Muriwai Beach that went for $841,000, a Ponsonby villa that fetched $2.2 million, a one bedroom unit in Ellerslie that went for $445,000 and a three bedroom cottage in Takapuna that went for $1.44 million.

There was also a two bedroom cottage across the road form the beach at Whitianga that sold for $430,000.

Anecdotal evidence from the auction rooms suggests there are more homes in the cheaper parts of the North Shore selling for under $1 million than there were a few months ago.

Bayleys also had a busy week in their Hamilton auction rooms with a mix of residential, rural and commercial properties going under the hammer.

Sales included a 266 square metre industrial building on a 368 square metre site in Tokoroa that was sold at mortgagee auction for $160,000, a 74.5 hectare dairy unit 10km out of Hamilton that fetched $3.3 million and a refurbished three bedroom house at Cambridge that went for $480,000.

The full results of Bayleys' latest Auckland and Hamilton auctions, with photos of all properties including those that didn't sell, and the prices of those that did, are available on our Auction/Sales Results page.

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40 Comments

by NissanGTR | 10th Dec 16, 10:57am 1481320642

40% is still a horrible result.

by President of P… | 10th Dec 16, 11:05am 1481321106

Someone did well picking up a one bedroom unit in Ellerslie for only $445k
President of Property

by Zachary Smith | 10th Dec 16, 12:40pm 1481326810

That does look like quite a good buy. A couple could live here quite comfortably. Built in the 1970's it should be reasonably solid. A good location. This is something that someone like Hardworkerdoes..., who hasn't commented for awhile, could possibly have afforded to buy. The price was between the low and middle estimate on homes.co.nz. A working couple with 100K deposit would only need to find $150 a week each to pay the mortgage interest. A good investment and cheaper than renting and in Auckland Central too. It is just the ground floor though, which lowers the price, but does have a garden. Like an apartment with a garden.

Bayleys link

#Goodbuy

by Cowpat | 10th Dec 16, 1:55pm 1481331346

Zachary , what nonsense. Do your numbers.

by Zachary Smith | 10th Dec 16, 2:23pm 1481332985

Price of house = 445k
Deposit = 100k
Mortgage interest on 345k at 4.49% (ASB 24 mths) = $15,492 per year which equals $298 a week.
298 divided by two equals 149.
So the interest will be $149 a week each.
Of course they will probably need to pay capital back as well ($75 a week each) but they get that back right?
There are rates and insurance to consider too. I was painting a fairly rosy picture but two people on the average income with 100K deposit could do it comfortably and have plenty left over for living.

by Cowpat | 10th Dec 16, 2:44pm 1481334248

So a couple become individuals to improve your data in terms of the interest but the deposit is combined. . Using your 4.49 % interest rate , 15,492 interest only plus 1000 insurance plus 500 community fee gated compound plus 800 ( they do have a garden that the neighbours overlook ) maintenance , plus 1550 rates equals 19342 , opportunity cost 100K at 3250 . One bed ellerslie unit down the road , 300 per week 15600 . Annual loss first year, $ 7000 . Couple split , lose job interest rates rise and banks tighten criteria , property prices fall say 20 %,all equity lost plus 15K after 24 months I'm painting a fairly rosy picture.

by Zachary Smith | 10th Dec 16, 3:11pm 1481335886

Insurance is probably covered in the body corp fee. Property goes up in value by 100K in three years. Both get promotions and pay rises then decide to rent this house out and buy a bigger one. Road to riches, living the dream.

by philip east | 12th Dec 16, 7:47am 1481482022

Or property prices crash and they lose $100,000 and also the next global banking crash hits home and they both lose their jobs. The dream becomes a nightmare

by head_down_bum_up | 12th Dec 16, 8:47am 1481485651

Or a volcano erupts outside their door and they are destroyed in a firey hailstorm...I mean, since we are throwing around complete hypotheticals to suit our respective opinions.

by sharetrader | 10th Dec 16, 2:16pm 1481332578

what a view, mould on the neighbours property

by CJ099 | 10th Dec 16, 2:42pm 1481334128

Probably leaky too.

by Zachary Smith | 10th Dec 16, 2:53pm 1481334820

I did consider that but it was built in the seventies so should be okay. I wonder if it was bought by an "investor"? Would get about $380 a week in rent.

by Cowpat | 10th Dec 16, 3:00pm 1481335245

So where will the couple live ?

by Zachary Smith | 10th Dec 16, 3:14pm 1481336073

They will live in the unit but will have to pay the investor rent because they thought your comment was more realistic as their relationship wasn't all that solid and the husband was always arguing with the boss.

by Cowpat | 10th Dec 16, 3:37pm 1481337439

So unhappy couple will stay together and decide to pay 380 week, splitting bed in half ,rather than 300 down the road . Happy investor , although making loss upset after tenants trash unit once one partner catches partner in compromising act with investor to cover rent.Investor sells due to sudden illness , oil found in garden , new investor makes it big . In real estate land , only winners.

by Zachary Smith | 10th Dec 16, 3:40pm 1481337633

The lesson to be learned is buy and hold. Life, it's a rich tapestry.

by BigDaddy | 10th Dec 16, 11:10am 1481321407

The heading should properly read :
"60% failure rate at Bayleys latest house auction"

by Zachary Smith | 10th Dec 16, 12:31pm 1481326310

40% seems like a pretty good result considering the negative news being bandied about. I notice that most sales are between the low and middle estimate of a homes.co.nz appraisal. There doesn't appear to be any "no bids'" results although I wonder if they are lumped in with the "passed in" ones for these latest results.
I also wonder if these results include sales made after the floor auction. I suspect it does as a quick search on the Bayleys website reveals all the "passed in" properties are still for sale although some sold ones are still for sale too.

by CJ099 | 10th Dec 16, 2:45pm 1481334358

Well Bayleys usually generate the best auction results so I can't imagine that the other real estate agents are doing any better. If this trend keeps going as I think it will in the next few months then prices will have to fall.

by Clarence68 | 10th Dec 16, 2:49pm 1481334592

BigDaddy or anyone else - feelings about what will happen in the new year? Advice for FHBs?

by CJ099 | 10th Dec 16, 3:11pm 1481335865

Yes I recon it's worth holding off for a bit before venturing back in the market particularly for FTB's who shouldn't saddle themselves with too much debt. What I think were seeing is Overseas Investors backing out of the NZ market due to several reasons:-

1) Market shock from B.C huge tax hikes for overseas investors and immigrants. This has caused a lot of the off shore banks to think twice about lending money to overseas investors. Lots of court cases happening now between Canada and Chinese banks. Here's an example: http://vancouversun.com/news/local-news/more-and-more-chinese-cases-tar…

2) The Trump effect; has also cause China to curb capital flight (I think they mean business this time).

3) More recent earth quake activity in large cities such as Wellington has also put off investors particularly with Insurance companies being fickle about insuring in these high risk areas.

So in short, I would wait for prices to drop, could be in the region of -20% in the next six months.

by diy-guy | 10th Dec 16, 3:15pm 1481336137

-20% in 6 months? dreaming.

by CJ099 | 10th Dec 16, 3:28pm 1481336923

It could happen look at Vancouver: Detached home sales plummet nearly 50 per cent in Metro Vancouver

http://bc.ctvnews.ca/detached-home-sales-plummet-nearly-50-per-cent-in-…

by Zachary Smith | 10th Dec 16, 3:37pm 1481337472

From your link:

Property sales in Metro Vancouver plummeted by nearly one-third in September, and prices even saw a very slight decline

Also:

Board President Dan Morrison said the demand for condominiums and townhomes in the region is currently higher than single-family homes.
That could be owing to a lack of inventory: The total number of homes listed in the region is down 13.4 per cent compared to September 2015.

This after the brutal 15% tax for foreigners too. You can't really compare Vancouver and Auckland as we mostly have family homes.

by CJ099 | 10th Dec 16, 3:47pm 1481338067

Did you watch the video article? It does quote that Vancouver West side, medium sale prices dropped -14% in one month! That's a heck of a drop. And our current decline in property sales at auction also reflects the same rate of sales decline as in Vancouver.

by Zachary Smith | 10th Dec 16, 4:15pm 1481339732

Just watched it now. There was a lot of emphasis on the 15% tax which we don't have though. I think this has affected the rest of the similar markets around the world as investors don't want this sort of thing to spread. That's why they are being shy at the moment.

by buzby | 10th Dec 16, 4:42pm 1481341377

Really? You actually believe investors have got together to agree to hold back from an opportunity in case they possibly one day might introduce a tax on the gains? In my experience an investor will invest if he /she thinks there is money to be made. They tend to get shy when it looks like that opportunity has dried up or they can no longer afford it.

by Zachary Smith | 10th Dec 16, 5:26pm 1481343969

Not quite. I believe that investors have realised that if capital gains continue like they have in the recent past then more measures will be introduced to dampen the market. Vancouver set a precedent in this regard. Things can actually just quiesce for awhile, it doesn't have to be rocketing up or plummeting down like some here seem to believe..

by CJ099 | 10th Dec 16, 5:54pm 1481345682

Well the January to Feb market will be quite a good indicator of whether it takes a continued down spiral for the long term.

by bw | 10th Dec 16, 3:10pm 1481335822

Eves Tauranga ( Baileys downmarket arm) 15/40 sold at auction last week =38%. So The Regions are 'turning' as well.....

by CJ099 | 10th Dec 16, 3:12pm 1481335977

Yes and once sales start to fall so will prices.

by Zachary Smith | 10th Dec 16, 3:33pm 1481337184

Listings on TradeMe are still dropping. Auckland now at 9068 which is a drop of 700 properties over the last three or four weeks.
I think we will see price drops of around 10% in the outlying suburbs and modest increases in the more desirable suburbs of Auckland. This is because Auckland will be perceived as somewhat safer than Wellington or Christchurch softening the landing.

by Cowpat | 10th Dec 16, 3:41pm 1481337678

Zachary, what is your rationale, if prices fall that the 'desirable ' areas would be the least affected.On this matter I'm just interested in your viewpoint ?

by Zachary Smith | 10th Dec 16, 6:21pm 1481347272

My rationale is that the most desirable properties in the most desirable cities will always be perceived as worth keeping in the long term. If you sell up and move out of these areas it is very hard to get back in. In Auckland these properties have not gone up, percentage-wise, as much as the outer suburbs. Compared to all the other hot real estate markets around the world Auckland is not that excessively priced.

by CJ099 | 10th Dec 16, 4:01pm 1481338913

Taking of Trademe and here's a huge market indicator. Did you notice the most of the new property coming on to the market is not going to auction, being listed as; priced or negotiation.

Now the last time that happened (less than a year ago) was due to the overseas investors being locked out of the market temporarily due to having to find IRD numbers. And the Auckland market dropped -8% in the space of two months, if I remember correctly.

by Groen_mamba | 12th Dec 16, 8:17am 1481483825

I've been tracking North Shore on realestate.co.nz. Interesting to note that listings in the last week dropped by 75 from 1429, and rentals went up by 35 from 380. It seems there are quite a few investment properties being withdrawn as capital gains are not sufficient.

by buzby | 10th Dec 16, 3:57pm 1481338678

There are lots of auctions on North Shore being passed in at the moment. Couple of friends selling are cross that the agents have persuaded them to try and sell before Christmas with no interest other than what they regard to be silly offers. I think the market will be flooded come March though.

by CJ099 | 10th Dec 16, 4:03pm 1481339006

I think you're right buzby.

by Rob | 11th Dec 16, 1:03am 1481371388

You know it isn't going well when the mainstream media aren't reporting the big profits people have been making on buying and selling, like they used it. Although you do always get the odd exception. People buying to sell for a profit make their money on houses, when they buy.
I am surprised they don't do more tenders in Auckland, as they should get the best price for the seller. Auctions are easy for agents, but won't usually get the top price for the seller, that the auction winner was prepared to pay. Tenders are good for sellers, but awful for buyers. Auctions are good for buyers, because you can see what other people are bidding, and allows you to bid up to your limit, and if you manage to pick it up for less, then you win.

by head_down_bum_up | 12th Dec 16, 8:46am 1481485615