Sales rates ranged from zero to 50% at Barfoot & Thompson's latest auctions

Sales rates ranged from zero to 50% at Barfoot & Thompson's latest auctions

Barfoot & Thompson had an overall sales clearance rate of just over a third at their auctions last week.

At the Auckland auctions the sales rates ranged from zero at the Shortland St auction on 21 July, where most of the properties offered were in west Auckland, to 50% at the Shortland Street auction on 19 July, where most of the homes offered were in central Auckland suburbs such as Epsom, Onehunga and Three Kings.

Sales rates at the Manukau auction remain improved at 40% compared to a few weeks ago, and the North Shore auctions achieved a 47% sales rate (see table below).

Prices ranged from $476,000 for an inner city apartment to $2.78 million for a house in Epsom.

The prices achieved on the individual properties sold are available on our Residential Auction Results page.

Details of commercial property sales are available on our Commercial Property Sales page and for rural properties go to our Rural Property Sales page.

Barfoot & Thompson Auction Results 17-23 July 2017
Venue/Date Sold* Not sold* Total % sold
On site. 17-23 July. 4 7 11 36%
Shortland St, CBD. 18 July. 2 3 5 40%
Manukau. 18 July. 6 9 15 40%
Shortland St, CBD. 19 July. 8 8 16 50%
Pukekohe. 19 July. 0 5 5 Nil
North Shore. 20 July.  7 8 15 47%
Shortland St, CBD, 20 July.  5 8 13 38%
Kerikeri. 20 July. 0 2 2 Nil
Waiuku. 20 July. 0 1 1 Nil
Shortland St, CBD. 21 July. 0 8 8 Nil
Total 32 59 91 35%
*Sold includes properties sold under the hammer or by 5pm the following day. Not sold includes properties remaining unsold by 5pm the following day, plus properties that had their auction date postponed or that were withdrawn from sale.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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How come it's always a third? Where are these 1/3 of buyers coming from? Are they just locals selling houses to each other?

A 'third' always sounds more substantial and spruking is physiological disorder based on greed.

Have you just suddenly realized DGZ how much the foreign investors took up around 50% to 60% of the Auckland property market in recent years. Well at least until January this year when the clamped down on capital outflows.

Wait until the local buyers start realize that there's no real reason to buy at auction any more now that the pressure is off.

What are you saying? Foreign investors were buying 50-60% of houses sold at auction? That's ridiculous. Around 40% were sold to investors. Even if all were "foreigners", your numbers don't work. I dont understand this hysteria around non resident buyers.

Really Bobster, care to explain then why Auckland's auction results suddenly dropped to such low levels for the last seven months? The only significant change was the capital flight controls that were enforced in January this year and caused the Auckland market to fall flat on its face.

Really, you are seriously suggesting 50% of properties were bought by foreigners? That's absurd. Bat sh@t crazy. Yes the currrnt downturn coincided with the Chinese capital restrictions, but that does not mean it was caused by them. The slowdown was caused by nz banks restricting mortgage credit as even they realised they were lending into a ridiculous credit bubble. This restriction was largely driven by requirements of the Australian regulator and banks own requirement to preserve their credit in the Australian market.

The NZ and Ozzy banks actually started restricting back in August 2015, where investors had to supply 40% deposits and then they further restricted on property portfolios for investors. But that didn't stop the Auckland market which continued to increase up until late 2016.
Foreign Investors have had a huge impact and I would say that they were purchasing up to 30% to possibly even 40% of the Auckland property market at auction.

The same has happened in other large cities such as Vancouver and has hugely impacted popular cities in Oz too. So yes, it has had a big impact, hence why you've seen such a huge drop off in auction sales in the last seven months.

It's not an LVR issue. It's not an issue of how much CAN banks lend, it's how much WILL they lend. And lenders had reached the limit of what they were prepare to lend, regardless of the LVR restrictions. The banks were getting more and more exposed to the bubble, this was getting reflected in credit downgrades and possibly increased funding costs, and thus negatively impacted on banks continuing willingness to lend. It's a classic credit contraction at the top of a boom. Now the process goes into reverse and the bubble deflates.

Yes it's a bubble that has been very much pushed up by foreign buyers and money laundering. Not just here but around the other gateway cities. Now that the breaks have been thrown on the market is starting to spiral downwards (So far mostly ours). Which is a good thing, as I pointed out with the latest IMF figures. NZ is one of the most over inflated property markets in the world in comparison to income ratios both for renting and purchasing.

I'm just not buying the "foreign buyers and money laundering" as prime drivers of this market. The evidenced numbers of non-resident foreign buyers is very small. These are just convenient excuses from the "this time is different" brigade for a domestic credit binge,

Nicely put Bobster although i doubt the bubble will be deflated much, that doesn't seem like the game the Western economies are playing.

I prefer to stick to the facts and looking at the latest auction results that also demonstrates how much an impact the absents of foreign buyers has had on our market. Of course the banks are restricting further on Speculative Investors, since they can also see that the property market is in decline with no top end buyer to support capital gains.

China’s Massive International Real Estate Buying Spree Is Officially Dead
https://betterdwelling.com/chinas-massive-international-real-estate-buyi...

It is not a fact evidenced by hard data that the Chinese capital restrictions had caused the current downturn. They correlate, but that does not imply causation. The best hard evidence we have (tax registrations) is that foreign buyers were and are a small part of the market: circa 3%. You are just assuming the auction figures are a result of reduced non resident purchasing, there's no evidence of that. I think any suggestion our banks restrained lending because they formed a view that "Chinese looking people weren't buying at auctions anymore" is absurd. Sales slowed because the banks slowed lending, not the other way around. It's classic bubble behaviour from banks. The bankers of the Ponzi scheme reached their credit limits.

Your missing my point. What I'm saying is; that the property market in Auckland has been bloated beyond income ratios, which has largely been helped by foreign investment flooding the property market, yes local speculators also help to push that market but they were largely locked out of Auckland when the 40% LVR restriction were introduced in mid 2015, for resident Investors.

What is absurd is that you could possibly believe the 3% figure for foreign investors, which even the Government admits is inaccurate since they couldn't even provide a decent questionnaire to collect accurate data on Foreign Property Buyers.

Since you're obviously new to Property Investment you lack the knowledge and experience of what has been happening to the NZ property market Bobster and it's pointless trying to explain things any further to you.

I advise that you buy as much property as you like Bobster in this falling market and make sure you get in to as much debt as you can manage. It will all be fine according to the RE's. :)

You must have a dent in your head sir, Bobster has been saying it is a ponzi scheme.

Local investors (and owner/occupiers to some extent) have been scared off/had their funding turned off too according to the RBNZ mortgage figures

http://www.interest.co.nz/property/88518/new-reserve-bank-figures-show-a...

I expect the foreign investor changes have had an effect too, and of course some of the difference to 7 months ago is seasonal.

Sold a third + a third + another third = a whole Groundhog day!

They are people who are owner occupiers who need to changes houses and are buying a house as a roof over their heads (what a quaint concept) That's the core demand in this market. Strip out the investors, that's what you are left with. Not pretty, is it?

Seems so normal to me, i dont see what the fuss is about. Maybe some people pick up a 10% discount? You can buy good value in any market so thats not exactly wow factor. Credit dries up a bit, prices flatten or trim down, then credit opens up again and prices stabilize or fatten up a bit. Bubbles dont 'pop' in to fundamental shortfalls of supply. If anything did pop youd see rates getting cut until it found support again. Thats the fiddle we all dance to in these managed markets.

Current prices are supported neither by incomes nor demand for housing as a pure accomodation assets. See the massive disconnect between massive prices rises and v modest rent rises. There are no fundamentals to support prices st this level. A 10% discount would mean a purchaser was buying a house in a market where the average price was still 9x income. Any investor who buys at this level needs a sanity check. Investors have been 40% of market demand.

Unless price falls caused a serious recession or otherwise posed a threat to the banking sector there will be no rate cuts. Prices in themselves will not be supported as a matter of policy at this stupid level. Anyway, with an OCR at 1.75 it would be like pushing on a piece of string. And 60% of bank funding is set by international rates anyway.

So nope, not buying that.

Markets are more than just the price today. Demand is a curve and as price falls you move along that curve in to rising demand. Its like with a stock market; there is a book of bids (market depth) and as price falls those bids get triggered and you see increased buying. Auckland housing likely has good market 'depth' because of fundamental shortfalls in supply. Market depth constrains the speed prices can fall. So while it it is reasonably true that there arnt fundamentals to support prices at this level, thats not interesting or even notable, its just business as usual in peaking markets.
Investors for the main do not buy at 9*income. They are concentrated in the markets where income multiples are more like 7, yields of 4.5% to 5%. The reason you dont see investors buying is in large part not because they dont have equity, they do, but rather they dont see value. Your point about the banks pulling the plug is also a major factor, but the investment market was just about out of chuff either way.
Even a mild recession will be met by rate cuts, i assure you thats the case. I dont think its the right thing for the country long term but im very sure thats what they will do. And a rate cut of 1.75% would be a total game changer, house prices would scream upwards and rise by 25% - 50%. House prices are not driven by the existing fixed rate book, but rather by the marginal cost of debt, during rate cut season thats the floating rate, which would scream lower, fixed rates would indeed follow as demand for fixed rates would plummet leaving an oversupply of long money.
You should focus much less on income and much more on affordability as income does not directly drive house prices.

A third of Aucklanders are trying to keep up with the Joneses.. My house is bigger type of people.
The other 2/3 are either struggling or didn't give a toss!

Interesting to see the number of houses put on the market for auction has tanked. This could be why in some auction results, the percentages look large. Statistics is a funny subject.

I think a lot of sellers are hesitant to put their houses for sale as the prices they are getting now have reduced from a few months back. Its called the anchoring effect - once your mind fixates on what you think something is worth, it is stubborn and won't take a loss at any case. This is until the value drops low enough and then the panic selling begins. In the finance world, they call this "sell your losers".

Anchoring effect is also known by the money lenders. Once they got you on a high mortgage and house value is dropping, you will end up in negative territory and have no choice but keeping up with the payments.

That's interesting.Thanks Mecheng.

You have it completely backwards. Houses are long term winners so you specifically do not sell them in down markets. Selling your losers would be in terms of selling assets that you expect to drop value, or perform poorly, over the long term. The response to hold property in downturns is exactly correct and simply means the investor was well positioned, physiologically and in terms of liquidity/cash flows, to manage a down turn. Thats why investors are always getting richer, they DONT sell quality assets in down markets.

Houses in Auckland are at 10x incomes. The long term average is 5x. If we weren't starting from here, the long term view might be sustainable. But from this point, the long term view (say, 10 years) is not positive. it would take decades of wage growth to revert to something like the long term average. Does it really make sense to put up with years of real terms capital losses and negative cashflow to get to that point? Especially if you are interest only with zero net yield or even negative geared? That's not an investment strategy, that's a slow motion car crash.

32 whole houses sold. It's not really denting the quantity of houses for sale. There are new C32 figures coming out tomorrow afternoon, although I'm doubting there will be any significant change in new lending.

Steady as she goes.

30 per cent is a reasonable outcome given 9 weeks from the election and post-upswing.

Some people think winter is another factor - but I'm a bit sceptical.

I hear that non-auction sales are doing ok. Frankly, I think auctioning is not the best selling method in Auckland right now.

There are always a lot of gloomy comments here - but people who come to this blog have particular biases and agendas.

"people who come to this blog have particular biases and agendas."

And what are yours?

Hi mfd,

You haven't figured it out, eh?

Best you find yourself another hobby.

If your views aren't 'National are wonderful, bring on the immigrants and house prices to infinity and beyond' then yes you have a bias and an agenda....got to love the ignorance!

Interestingly because of inflation and growth house prices to infinity is sort of what will happen over time.

I notice that people who come to this blog have 'my way or the highway' mentality.

Hi DGZ,

I agree.

Most of them want to bring on a property crash, then rush in and buy Auckland houses dirt cheap.

It's fantasy stuff, however, and their dreams will likely end in tears.

You've said multiple times you'd love for prices to fall so you can buy cheap houses. It's tricky to understand your biases and agenda when you constantly contradict yourself, so my current conclusion is you're trolling for a reaction.

Lol, hes saying he would LOVE to but isnt deluded enough to expect that it will happen. Hes saying people on here are deluded enough to think they will get a chance to buy Auckland cheap... Its funny because look around, this city is bloody gorgeous. Come hang out at mission bay for a while, grab a beer on the deck and watch the sun go down over Ragitoto, think that's getting sold at a 25% discount, yeah right!

Hello Laminar,

You are absolutely correct - that's exactly my position.

Why mfd and others don't get it - when I've spelled it out umpteen times - is beyond me.

I suppose it's because mfd and others have their hearts set on a crash so much, that they can't except anyone who argues that no crash is likely.

You may be confusing me with someone else, I've never pretended to know what's going to happen in the property market. I just like to add a little balance to those who seem to argue price rises are guaranteed without any appreciation of the risks they're taking and encouraging others to take. Admittedly, these days the balance of the site is a little more even but it wasn't long ago that the vast majority of commenters wouldn't even entertain the idea that prices could fall.

Was the city less beautiful a couple of years ago when prices were at a 25% discount to today? What a bizarre argument, the world is full of beautiful towns and cities, many of which are cheaper than Auckland. Good on you for loving the city you (presumably) live in, but don't be so short sighted.

Lots of good reasons to buy in Auckland. If people find a better place by all means go there. Go live in Paris, Dublin or Tallinn.

NZ Rank 1, Most prosperous country in the world
http://www.prosperity.com/globe/new-zealand

NZ Rank 13 - Human Development Index
https://en.wikipedia.org/wiki/Human_Development_Index

NZ Rank 8 - Happiness
https://en.wikipedia.org/wiki/World_Happiness_Report

NZ Rank 7 - EIU Where to be Born
https://en.wikipedia.org/wiki/Where-to-be-born_Index

NZ Rank 7 - OECD Better Life Index
http://www.interest.co.nz/news/81889/oecd-better-life-index-finds-new-ze...

Mercer - Auckland Rank 3
EIU - Auckland Rank 8
Monocle - Auckland Rank 22

I have found a better place, I live in Christchurch. All the beauty, all the NZ benefits, better cycling infrastructure, half the housing cost. More money for enjoying life.

Mfd I think that is an excellent attitude, I honestly do. We should all be striving to make our cities great places to live in. I would really love to see more places get invigorated. We are seeing places like Palmerston North and Hamilton get more desirable as Auckland reaches capacity and becomes too expensive.

Christchuch is a ruined city with sewage over-spilled in most areas after the recent flooding. Is that what you call enjoying life?

From reading your posts DGZ - you're certainly the expert on sewage over-spills!

The rebuild is going pretty well, new venues opening up every week, very exciting. Even with the very heavy rain at the weekend very few houses were affected in the city. I went for a lovely run up to sign of the kiwi on Sunday, views over the city of the snow covered Southern Alps and Pegasus Bay all the way up to the Kaikoura ranges, off to Twizel for the weekend to enjoy the snow up close. Yes, that's what I call enjoying life.

LOL.. that's home sellers' attitude "My price or buy somewhere else".. Time will tell

"My price or buy somewhere else"

This is not unreasonable. In other words if you can find a similar house for cheaper by all means buy it. It reminds me of a time, long ago, when the agent showed me houses similar to the one I was selling, trying to get me to lower my price, however they were no longer on the market as they had sold. A seller can always say, good luck buying that house that has already sold! Especially if you are in no real hurry. I ended up getting the agent to cut his commission.

Oh yes, the election, that watershed moment

30% is an abysmal clearance rate. Property's not moving in anywhere near the quantities it was. This is because bank credit has tightened, housing is severely unaffordable for owner occupiers and investors are not buying and many are probably selling. Any investor buying an investent property at 10x, or even 8x, average income needs their head read. Apart from those owner occupiers who are buying and selling in the same market demand is drying up

Dont focus on the percent alone - focus on the numbers. 32. That's pretty low.

All sales figures are low historically right now. That's way more informing than % passed in.

Yep, agree

This place I drive past has been on the market since November last year, then relisted in may with b&t.Still no takers. Asking to much?
https://touch.trademe.co.nz/property/listing/view/1327792828

Wow so cheap for a 6-beddy!

My feeling is it would have sold this time last year to a Chinese family or investor given it's newish with separate rental or extended family downstairs. So maybe those capital restrictions are having an effect , more so in the suburbs..

Noice!

They are asking for the top price at 38% above CV. It is also exactly the homes.co mid price estimate. I'd say they are not desperate to sell as they could still knock a hundred off and make a two hundred gain. It is getting a lot of rent which would cover the mortgage. One would have to look at it to ascertain why it hasn't been snapped up. Seems to have an odd driveway.
Zachary's current rule of thumb: Quick sale 20% above CV which would be 850K.

Yawn. Volume for sale still low, sales even lower. Has been like this most of this year. The new normal.

Nat has no interesting changing the rules, as it would go against its established voter base, and only a new govt/agenda would radically change the rules propping up prices, being immigration restriction, investor tax treatment, anti land banking rules (empty house/land tax), increased tenancy protection and overseas ownership ban.

End of the day we are either having a significant property price realignment down, or massive inflation in wages (and everything else to pay for that). Wage/inflation explosion will hammer everyone (the many), especially youth and old people. Old people always vote, and youth cant runaway as easily to Aussie or London so should get of arse and vote as well. A price crash will only hurt the stupidly in debt (specuvestors), and the banks (the few), who send all their profit to their Aussie masters.

So...vote for the many, or vote for the few, democracy = vote for your own self interest. Only 59 days to go.

I wonder if the agents are saying "Yes please list your price for auction, you have a 30% chance of selling it on the day!"

Or maybe not...

and just when tothepoint and zach were getting all excited by the 58% clearance at the Baileys autions, reality rears its ugly head again.

Pressure is mounting! dont anyone hold the needle too close........

Some of us here are realists......

We know that auction clearance rates fluctuate from week to week.

In any case, what's more interesting is that prices are remaining remarkably stable. Despite post-boom, pre-election etc, most Aucklanders aren't interested in selling at much-reduced prices.

Medium/long term prospects for Auckland remain excellent.

That this non-event headline has already attracted 48 comments, bears testimony to the feverish interest that people have in property.

"We know that auction clearance rates fluctuate from week to week."

I don't care either way, but haven't these been consistent rates for the past 6 months or so?

"what's more interesting is that prices are remaining remarkably stable"
It's not really that interesting, and easily explained away with even a schoolboy knowledge of economics and statistics.

"Some of us here are realists......" unfortunately you are not amoungst them

All you have for your arguments are "its the election"

But then again you have been outed as a lier previously, some say you are a RE agent, some have called you a troll. To also call you a realist.would just be stretching the truth a bit too far.

Hi thegic,

You write, "some say you are a RE agent....."

Have you read my posts on real estate agents? (There have been a number of them.)

Suggest you do your homework before shooting from the hip.

You lack credibility.

50% sales rate at Shortland St is still pretty good in my view.

15 sold out of 42 is not 50%, or are you just picking the one good day with your rose covered investor eyes

Over 30% really is not too bad for New Zealand. Most houses don't sell at auction nowadays. Not selling at auction is not the disaster everyone assumes. You just go straight to sale by negotiation if you are in no desperate hurry as all the marketing is in place. You should always be in a position where you don't absolutely have to sell.

Nice how you only look at the shortland street result for the 19th @ 50%, what about the 21st 0 from 8 = 0% (must have been like the morgue that day)

All up over the 4 results at shortland street 15 from 42 = 35.7%

Not too bad ... if you are one of the 35.7%

The other 65% are left with decisions to make

Tothepoint is getting increasingly desperate.

On the contrary, I'm very relaxed.

Things are panning out EXACTLY as I've been predicting/saying since the beginning of the year.