Prices at latest Barfoot & Thompson auctions ranged from $286,000 for a character bungalow to $2.41m for a brand new house in Epsom

The residential real estate market continues to drift sideways with Barfoot & Thompson selling 42% of the properties at auctions last week.

At the larger auctions the sales clearance rates ranged from 27% at the Manukau auction to 78% at the auction at Barfoot's Shortland Street rooms in the CBD on 5 October, where most of the properties offered were from central Auckland suburbs such as Greenlane, Royal Oak, and One Tree Hill.

At the North Shore auctions the sales clearance rate was 55% (see chart below).

Prices ranged from $286,000 for a three bedroom bungalow in Whangarei to $2.41 million for a brand new five bedroom/four bathroom house in Epsom.

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

If you are interested in commercial property check out our Commercial Property Sales page.

Date Location Sold* Not sold* Total % Sold
3 October Manukau 7 19 26 27%
3 October Shortland St, CBD. 5 10 15 33%
4 October Mortgagee 0 1 1 0
4 October St Heliers  1 0 1 100%
4 October Shortland St, CBD 8 13 21 38%
4 October Whangarei 1 1 2 50%
4 October Pukekohe 2 3 5 40%
5 October North Shore 11 9 20 55%
5 October Shortland St, CBD. 7 2 9 78%
6 October Shortland St, CBD. 7 10 17 41%
7 October On site 2 3 5 40%
Total All locations 51 71 122 42%
*Sold means sold unconditionally either under the hammer or by 5pm the following day. Not sold includes properties that remained unsold by 5pm the following day plus properties that were withdrawn or postponed.

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13 Comments

I see a bit of a trend..

Sideways is not good enough , we need a serious adjustment to 2010 to 2012 price levels before there is any value in this overpriced Auckland market .

Of course this will not happen to that extent , but a reversion to a 36 month average would be good .

And its a truism that markets do eventually revert to their long term average.

Quite simply if we hit the immigration pause button , this will happen quite quickly

Winston will ensure this

Yet housing affordability was at crisis levels in 2007 so is 2010 - 2012 far enough?

Hi Boatman,

The reality is that "sideways" is the best we can expect - before the next upswing.

For people like me, it would be nice if house prices fell a lot further and I could get a firmer footing on the property ladder.

But that isn't going to happen. There's a huge pent up demand for property - especially in Auckland. House prices are "sticky down" as economists term it.

up
12

If Winston manages to get the immigration pause button hit in these coalition negotiations, he'll be my Person of the Year!

I don't think this will happen in a heart beat, it took a few years to get up there and will take a few to slow back.
Simply stopping immigration or pulling it back won't be enough for an immediate dramatic effect. There is a massive back log of people still waiting to get into houses, which will drip feed supply for a while still, how long is anyone's guess. There are many that think that every "investor" is all of a sudden going to abandon their investment because the market takes a dive! They may be surprised at how many people buy for the long term (through cycles) and don't sell, simply retain incoming producing assets for retirement and feed this through inheritance to the next generation. Without construction of new homes there will remain a limit supply for a while yet.
Sure, people who invest to make a quick buck and a gamble on the market are at risk, but don't think there will be a mass sell down like some predict. We need to introduce more affordable homes to the market, without the available credit I'm unsure how they plan to do that!

Upside what do you mean by "affordable." Its odd, but 'investors' in Ireland, in particular Dublin used immigration and backlogs of waiting people as reasons in 2007/8. Investors as of this moment have circa 9600 properties to purchase in Auckland, yet sales have collapsed, and prices are the same as last year when there was 30 percent more demand ; and fewer migrants.

Comparisons to Ireland make no sense unless you think we are about to see unemployment explode alongside our banks?
Sales have crashed because policy/credit has suppressed buying but owners can see the shortfall and are content to wait. Unless there is a sudden increase in forced sales its not likely prices can fall very far.
Once China sorts out its black market they will spin up their new banks in NZ and credit will begin to flow in here on scale. Hopefully we have solved the shortfall before then or we could see prices climbing again.

I think Auckland prices will decline, unless we get continued tepid growth in the USA, in which case interest rates may fall into the 3s. The "collapse in sales is a 20-30% fall from a have to beat the new LVR restrictions mid to late 2016 frenzy, "while the bank will still honour my pre-approval" surge. Early 2017 there were 10400 listings on trademe for Auckland so listings have not even hit this level.

The difference between NZ and Ireland, is Ireland had less issues opening up new greenfield subdivision sites. So they had the US style large half completed estates post bust that were constructed to target investors. These low end estates are not being created in NZ, most new build housing is targeted at owner occupiers and the government is trying to figure out they can get affordable/ low end houses built. The difference between NZ and Irish immigration, is Irish immigration was principally from within the EU and was principally stimulated by employment related to construction. To the majority of these immigrants Ireland was a short term spot to relocate for work, these immigrants did not attend to raise their children in Ireland. Whereas, NZ is looked as a desireable location to relocate one's family and raise and educate their children.

Christchurch may be a mini Ireland type environment, with temporary relocation of those in construction and some residential construction eg townhouse/ apartments, specifically targeting investors. But, I would not generalise this to the rest of NZ.

Irish migration was until 2003 /4 driven by returning Irish nationals, then by non EU migrants and finally until 2007/8 EU member countries. I take it from your comments that Ireland is undesireable for relocation for education

Ireland is less desireable than NZ regarding permanent immigration. They may have some decent educational facilities. But I do not see vast numbers of migrants lining up to move permanently to Ireland, other than those from the Middle East/ Africa wanting to get into the EU. NZ has net positive permanent migration from the EU rather than the other way around, and I do not see this changing.

Comparing NZ property markets to Ireland's is inaccurate they constructed excess housing, targeting the buy to let market. Most of NZ's housing is being built to target end users ie owner occupiers. In other words NZ has actual demand from people who wish to live in these properties, Ireland constructed vast tracts of property specifically built for investor demand. Ireland inadvertently built ghost towns, there are no ghost towns in NZ. If anything demand in NZ is constricted by the LVR restrictions, rather than the 100% mortgages pre-GFC in Ireland that were thrown around in their terms to target the "mass market".

....and as each spring brings a new pile of ever cheaper listings, increasing the bloat, further depressing prices, specuvestor spirit, employment then this brings us closer to the great reckoning. If you are a naive shoe shine specuvestor that contributed to this mess then all this might sound a little negative - no apology!

Somewhere sometime NZ will get its next government
I do hope Winston brings common sense control to NZs
open door immigration.