Bayleys sold two thirds of the Auckland homes they took to auction this week (week ending 10 March), which was one of the best general auction room results we've seen for a while.
Sales were achieved on 17 of the 26 Auckland homes marketed for sale by auction this week, giving a clearance rate of 66%.
However results were more mixed down the line, with five of the 22 properties at the Hamilton auction finding new owners, one of the four properties auctioned in Matamata was sold, and in Hawke's Bay three of the four properties auctioned were sold.
Notable sales at the Auckland auctions included a two bedroom apartment with a car park in the Metropolis building in the CBD that sold for $577,000, a clifftop property on a 1133 square metre site in Glendowie that fetched $3.217 million, and a large home on 3854 square metres of park-like grounds at Muriwai Beach that went for $1.48 million.
In Hamilton a villa on a 7.8 hectare section at Whatawhata went for $2 million, at Marewa in Napier a classic three bedroom bungalow on a 921 square metre section (pictured) sold for $430,000 and in Matamata a four bedroom house fetched $685,000.
The full results from the auctions with details of the prices of individual properties are available on our Auction Results page.
You can receive all of our property articles automatically by subscribing to our free email Property Newsletter. This will deliver all of our property-related articles, including auction results and interest rate updates, directly to your in-box 3-5 times a week. We don't share your details with third parties and you can unsubscribe at any time. To subscribe just click on this link, scroll down to "Property email newsletter"and enter your email address.
92 Comments
Excellent results really, you know, considering current sentiment about the future of house price growth.
We don't seem to see any results that say "no bids", is that because there are none or because we are not being told anymore?
We also don't seem to get the full results of auction sales as I have seen properties sell recently but not appear in the list.
500k? That is not worth cashing up! Personally if I can't make at least 850k (net after RE commission) I would not sell up at all. You will find many freehold sections are worth well over $1m just on land value especially in DGZ and close to the Auckland CBD.
No. 64 Lucerne Rd was sold for $7.2m a couple of weeks ago. Vendor paid around $2.3m in 2005.
Went to Harcourts auction afternoon in Hamilton on Thursday, here's a summary:
* 18 properties on offer, everything from investment properties to top end lifestyle properties.
* 7 of 18 sold
* 4 of the 7 that sold the auctioneer had to work for (ie: didn't race past reserve)
* The auction was stopped twice for 5 or so minutes to let the back log of 'parked' properties to be negotiated in other rooms clear - one of the songs played while waiting was Radiohead - High and Dry, ironic really.
* 3 houses touted as rental properties had 0 bids
Bidders per property:
* 1 house had 3 bidders
* 2 houses had two bidders
* 4 houses was sole bidder vs vendor bids
A lot of tyre kickers like myself, ladies i got chatting to were seeing what a neighbours place was going for as they're looking to sell, that property was listed at $500k, homes.co.nz has it at $520k, auctioneer opened at $380k and no hands were raised.
canon - thanks for the detail. Paints a picture which the clearance rates don't.
While Auckland has stalled or gone into reverse, all is not well in the provinces either.
Plenty of properties being passed in at auction and sales prices well below expectations.
I tendered for a property in Napier last week. I was half hearted about it and my offer reflected my enthusiasm. I was stunned when the agent called me as top bidder and had to breathe heavily on my iron lung when told of the vendor's expectation. Needless to say the conversation was brief. Absentee Auckland owner who hasn't quite adjusted to current market conditions.
The Mission Bay sale is a good example of where the AKL market is heading.
2014 CV $1.10m
2017 Sale Price $1.48m
2017 Mid range estimate price $1.65m (hones.co.nz)
It sold for roughly 10% less than its estimated current market value (based on historical sales).
It sold for roughly 25% over its 2014 market value.
And that's in a good location.
Buyers beware. The market is turning fast. Might pay to wait a bit while the new normal is better known.
LOL. I lived on the beachfront in Kapiti many years back. Some UK buyer purchased a property down the road for around about three times what a kiwi family would have paid for it at the time. Based on that sample size of 1 the whole neighbourhood did a "re-set" on their price expectations :-)!!!!!!!!
And our new CVs reflected the massive jump in the next round of revaluations. It didn't make them any more affordable, or a "good buy" for kiwis though.
Market turning fast..??
Ok... Heres one that paints a different picture
470 sandringham rd sold for $1.5 million.... 2014 CV $800,000
https://www.bayleys.co.nz/Listing/Auckland/Auckland/Sandringham/1630156
Maybe its a development site..?? ( corner location ..?? )... but who knows..
I'd guess that the ugly ones will sell cheaper and the good ones will get get strong prices..
Don't know - looks like it's an exception because of the re-development potential - bowl the exiting dwelling and intensify the site. The difference with the example I gave is that that property has no option for redevelopment (already intensified and a new build on it). It has no future speculative value.
So, yes, while the new unitary plan takes hold - those properties re-zoned for intensification will retain their inflated market values. The same cannot be said for those without the premium afforded by the re-zoning. With time, all of central AKL homeowners will want to be re-zoned in order to take advantage of that land-value benefit.
Meantime, the speculative price element across the board is over, I suspect.
I'm not making the assumption that things (in AKL in particular) will remain static - rather my money is on a very hard landing. It sounds like you think that Auckland will be seen as some safe haven that all the monied- up masses in other jurisdictions will flock to in droves. Someone sold you the koolaid. All these other jurisdictions are in hock too - debt has crippled just about everyone the world over. The seriously monied-up will still retain the penthouse in NY and London - and if they venture to our shores, they'll head to Wanaka, QT and Marlborough/Tasman I suspect. But they represent the .0001%. The top 1-10% that still want to accumulate capital and/or earn for a living - and might rather do that earning in miles-from-anywhere Auckland City won't survive the hard landing.
JMTCW.
I think Auckland along with Sydney, Melbourne, Brisbane, Toronto, Vancouver, London and others will remain highly desirable locations for the burgeoning middle classes of Asia. Cheaper air travel with the new generation wide bodied twin-engined jets and the Internet make "miles-from-anywhere" irrelevant. I think you are more likely to be successful if you keep positive and not get overwhelmed by doomsterism.
LOL. Now you're selling the koolaid. What I find really objectionable about that is that you're selling it to locals and it's a load of crock. You're like a carpetbagger of centuries past.
As I said earlier - local buyers, and in particular FHBs and those considering committing to big mortgages, beware.
Happy for everyone to be positive about the future - I'm very positive about the future - as young families will be able to afford property in Auckland at some near term point in that future!!!!!
Affordable housing is hardly "doomsterism", Zach.
Ta. Supporting evidence :-). Only magnify the situation over there by a considerable amount for local conditions;
http://www.economist.com/blogs/graphicdetail/2017/03/daily-chart-6
That's not success, it's pending disaster.
Long run averages should not be forgotten. NZ is a market with a single distortion, that is immigrant and foreign investment in an already overheated market.
The reversal that will come will see house prices falls significantly in real terms over the next decade.
It seems like criminal negligence on the part of our government of the last ten years. Especially after campaigning for power on the basis of addressing the housing crisis.
They've sold NZ out from under upcoming generations of Kiwis by turning a blind eye to foreign demand and money laundering.
... not only are those graphs painting an accurate and super scary image of how grossly overpriced housing has become in New Zealand , .... but the authors point directly to the $US 1200 billion which has flowed out of China , and into leading OECD economies and capital cities in the past several years as one of the causes ...
And , it can't be labeled as " racist " if such a luminary as the Economist says it's China ... it's the Chinese , Bill ... China ... they're stuffing us up Bill ... China ! ... read it in the Economist , Bill .... Chinese hot money !!!
Since autumn 2014 $1.3trn of capital has flowed out of China. Some of that cash has found its way into residential property in some of the world’s most desirable cities.
It's not necessarily hot money though.
China will become one of the largest markets of high-net-worth individuals in the world, with the number of high-net-worth families rising from 2.07 million in 2015 to 3.88 million at the end of 2020. -LINK
A huge amount of wealth has accumulated in China and consequently a huge number of HNWIs have invested overseas. This looks like a trend that is going to contuinue.
A lot of money has grown in Chinese real estate too. Not long ago all the apartments were owned by the state and given to workers to live in. Ownership of those apartments has transferred to the occupiers and the properties can now be sold privately.
While a lot of the money in China has not been accumulated fairly and no doubt some poor schmucks have lost out like the builders of those apartments who worked under a communist system or maybe workers today who don't get paid what they are truly worth it's not exactly stolen money.
The phrase, "Behind every great fortune there is a great crime", was coined in the heyday of the West and likely referred to the great fortunes of the oil barons and imperialists who made their money from resources that were just lying around on land that may not have been technically theirs. this sort of thing still goes on today.
If you visit some of the sights in Beijing you will see where the British stole the gold off large pots or pagodas missing their statues taken by the British. The British even charged conquered people for the costs of conquering them. This sort of think went on for centuries.
So while most money is unfairly accumulated it is actually still real money and there is likely to be more coming.
Young Kiwis do need to hear this.
It's the sound of some in the older generation eager to price Auckland - and other parts of New Zealand - out of the reach of young Kiwi families, via a quick buck to be had by trying to make these parts of New Zealand a global investment vehicle rather than being about homes for locals.
If this doesn't drive young Kiwis to agitate for political change against such selfishness, things could get much worse in the future - including any ultimate backlash.
Kate... I would keep in mind :
Normally the Real estate mkt turns down because of fundamentals such as higher interest rates ...unemployment...recession.... over supply of new homes..... decline in immigration or even some kind of global Black swan event....
None of this has happened.
The changes in the LVR seems to have killed the Auckland mkt... like u say ... speculative element is gone.
BUT.... because it was the externality of the LVR, for me it is difficult to know what the longer term outlook is..???
I'm guessing slightly down and treading water for a while..?? ...
I do know that if one owns ugly property .... it may be hard to sell now..
I hope it goes down slowly over the next few yrs.... but I'm not so sure it will...Once the mkt has cleared the pool of misguided over leveraged speculators.... it may stabilize/ strengthen until we actually get an over supply of houses..???
( my area of interest is to do with the Credit based Monetary system that has evolved since Bretton Woods, and how it has impacted wealth distribution, asset prices and the growth of the FIRE economy... This has alot to do with the amplitude of asset price booms and which is now a Global thing.)
Yes I would urge a little caution. Much as it would be nice for it to unravel, where else does the surplus of money supply find a home? Printing (borrowing) money is still the game and it isn't one that goes backwards. The consequence of a housing crash is a shrinking money supply (where else can you borrow it into existence), for which the ramifications need to be considered.
There won't be anything nice about it unraveling. No one in the US profited out of the sudden collapse - aside from vulture capitalists;
http://www.motherjones.com/politics/2013/11/wall-street-buying-foreclos…
A number of headwinds for residential property now.
Rising interest rates and number of Auckland listings, China plugging capital flight, election uncertainty up to September with possible change to policies around residential investment, borrowing and immigration.
And how many recent "investors" will start coming to market beginning October 1st 2017 when the 2 year limit starts rolling over on the bright line legislation?
In case anyone is wondering what a bubble looks like;
http://www.economist.com/blogs/graphicdetail/2017/03/daily-chart-6
New Zealand will look back at this period and wonder how the "heck did we let this happen. How did we ever convince ourselves this was normal".
But the Key government worked extremely hard to prevent voters from understanding there was a black/hot money market operating here - let alone the size of it.
The government was complicit and the citizens kept in the dark. Now some citizens (those who took on large debt based on competing with hot money from overseas) will pay. JK will be living in Hawaii by the time the magnitude of it becomes known and the effect of it sinks in.
That is true, but it seems they didn't manage to pull the wool over most people's eyes;
https://www.bnz.co.nz/about-us/media/2017/kiwis-blame-investors-foreign…
Boomers and early Gen Xers make up the largest voting block, and had the largest number of votes for National; so the lions share of the blame fall on their shoulders.
National also campaigned on the affordability of houses and claimed that in 2008 there was a crisis and wanted to make housing affordable. They were voted in (partly) based on that for their first term yet did nothing to solve the "crisis;" no capital gains tax, no interest free loans for FHBs, no prevention of foreign buyers entering the housing market, no stamp duty... They took no action to curb speculators or make investing in property less attractive or to promote owner-occupiers.
Why would they? There was a massive wealth transfer from new immigrants and foreign investors to boomers and older Gen Xers. Sure millennials and other FHBs are finding it harder with all the competition but that is the new world. The good old days of walking into a trade when you were 15 and buying a home when you were 19 at 2 x the average wage are gone. Fact is kiwis need to work harder and longer if they want to be successful.
That's what no one on this site seems to understand. For every FHB who got beaten at auction when their $700k limit got blown away there is a happy boomer who sold and walked away with $1m in foreign immigrant money. For every action (making houses cheaper for FHBs) there is an opposite and equal reaction (boomers get less when they sell).
National knows this and it has seen them win 3 in a row with a likely 4 on the way (playing off young and old again with the super age increase).
There is another demographic in what is happening in that Baby Boomers are selling and leaving as they hate the Auckland they knew and lived in for many years.
I (not a Pensioner) am in that boat in rural Auckland. With all the younger people from Auckland bolting out here for obvious reasons that houses are cheaper and their children can play on grass, I say good on them.
I no longer recognise my town and what has happened to it. I am off to a provincial town to be with family and grandchildren as are many from this age group. It is NOT about making money, it is about choosing a better, quieter life away from the appalling lack of infrastructure that accompanies the astronomical growth in the South.
Sadly, without regulatory oversight, a seller such as him/her is FORCED to take the highest price in order to be able to replace, faced with competition, which is why the solution must come from government. Get the foreigner out of the market, you do not have to make that horrible decision
Enough young people got out and voted for the election bribe of interest-free student loans.
Once they realise that boomer investor-voters are absolutely pitted against them in favour of foreign purchasers buying Auckland - and other parts of NZ - out from under them, perhaps as a voting bloc they'll start voting for the few - but hopefully growing number of - politicians who give a rat's posterior about what is left to young and upcoming generations of Kiwis.
Young Kiwis need to see the level of pure unadulterated selfish greed that's driving older investor-voters.
It is not just National... Its also Labour, the RBNZ and Treasury...etc
AND, what I feel is like a Mafia style, "clip the ticket" controlling zeal of Local bodies...etc..
The ideology of Globalization predates National coming to power...
Globalization unleashed the forces of deflationary pressures on wages and
the inflationary pressures of Capital Flows on asset prices.... in developed western countries with open borders..
NZ is like a little butterfly that is exposed to global forces.... getting tossed around.
Tweets from Aussie
Alice WorkmanVerified account
@workmanalice
Went to auction for a 2 bed 1 bath tiny terrace in Newtown. Opening bid was $1.1 million, sold for $2.8. Last sold for $490k in 2006!!
Richard wilberforce @Wilberforce55 24m24 minutes ago
Next door sold to chinese in may last year. Highest price on the street ($8.25m). Never set foot in the place. Derelict
It's going to be a nightmare to unravel
Diary price is going bad, NZ dollar drops sharply, real estate agencies having a career day.
Residential property managers are still unregulated, still unqualified, very little educated.
The income level has not yet increased.
When the mortgage rate goes up, people with large mortgages will fail to pay.
There are so many folks with many houses renting them to cover the mortgages and still afford to drive Ferrari.
You know what happens to those young kiwis bought their first home after the market collapses by 20%?
They become homeless.
That includes all the kids on newspaper saying 'how I bought my first house and I'm only in my early twenties', they won't own anything after a year.
Who will take the responsibility and go to jail for this?
No one, not the Reserve Bank, not the mortgage brokers, not the REAA.
(Already, REAA is good at saying it is not my business but generally no good for anything.)
But we will, like in the movie, just blame the poor, the immigrants and the older generations.
Whoever's slowest when it hits the fan.
I recently read a book which featured a corrupt property developer/real estate agent/landlord being strung up by an angry mob. Lindsey Davis' 'Venus in Copper', set in Ancient Rome, if anyone's after a good read. A series that's always got a basis in documented archaeological and historical fact.
DC, why no article about the 30% clearance rate at Barfoots last week.
Interesting on your auction page:
1099 Auckland properties sold by Barfoots, 1907 not sold -> 36.5% clearance rate (since inception of the data set).
All agencies 2451 sold out of 5587 -> 43.8% clearance
It would be interesting to have this clearance rates graphed monthly since the inception...
I'm sure there will be a significant decline - unfortunately your data may not go far enough back to pick up the period where auction clearances were 80% - being the norm in 2012-14.
Well it appears that a lot of Auckland's property is quite literally under water, so you would be best to check on your Tenants to see if they're ok. Unfortunately Mother Nature is not that choosy of which areas she would flood, rich and poor alike have had quite a deluge.
Auckland weather: Police catch wakeboarder riding Remuera floods: http://www.newshub.co.nz/home/new-zealand/2017/03/auckland-weather-poli…
More than 300 Auckland homes flooded as Tasman Tempest rages
http://www.stuff.co.nz/national/90338537/150-west-auckland-homes-floode…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.