A big week at Bayleys' auction rooms in Auckland, Hamilton, Tauranga, Matamata and Rotorua

It was a big week in Bayleys' auction rooms last week with 81 properties marketed for sale by auction in the upper North Island and sales achieved on almost half of them.

In Auckland, auctions were held at Bayley's offices in Remuera, Takapuna, Takanini, Royal Oak and East Tamaki as well as at the Head Office auction room at Viaduct Harbour.

Of the 37 properties offered at the Auckland auctions, sales were achieved on 18 of them, giving a clearance rate of 49%.

South of the Bombays, Bayleys held auctions at Hamilton, Rotorua, Tauranga, and Matamata, with 44 properties offered and sales achieved on 21 of them.

That gave an overall clearance rate of 48%.

Prices at the Auckland auctions ranged from $708,000 for a two bedroom, brick and tile unit in Mt Wellington to $3.75 million for a four bedroom home on the waterfront at Mellons Bay.

South of Auckland prices ranged from $420,000 for a three bedroom house at Matamata, to $1.45 million for a four bedroom house on a lifestyle block, also at Matamata.

Details and photos of all the residential properties offered and the prices achieved on those that sold are available on our Residential Auction Results page and details of commercial property sales are available on our Commercial Property Sales page.

Details of rural property sales are available on our Rural/Farm Sales page.

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117 Comments

Once again Bayleys is clearing a higher % that their competition especially in Auckland

If you were going to sell via Auction, you'd be stupid not to go with Bayleys at the moment

..surely its got to do with the stock. Would you really buy house A over house B because of whose marketing it???

Great comment

Clearly they are either convincing their customers to meet the market or making the offer compelling to the market.

sales achieved on almost half of them.

Smiles all round. This means less than 50%. Like the percentage number, the number starts with a 4.
Reads like "half" is the rolled gold standard, in a (no one ever sells more than half) kinda way.

I doubt they do anything different from any other agent. Sounds more like their mix of properties than anything else.

So you're best off selling via Bayleys because they will beat down your expectations more effectively?

That appears to be the sum of it. Maybe they make you feel better about taking less money.

Except the properties that sold got really good prices.

"good price"? You imply that they could not have gotten more from some other agent. We can't know either way.

Apples and oranges
Bayley’s sells higher end RE and hardly anything compared to Barfoot a& Thompson the biggest RE in Auckland by far
Surely this is a PR article sent to the media for promotion
The numbers are puny

Could it be seller can get some interesting freebies from Bayleys agents?

Since when does a clearance rate of "almost 50%" represent any cause for celebration?
What do the statistics indicate? I would expect to see a clearance rate that drops below 65% being below average, and below 50% representing dire straits.

I'm pretty sure even at the height of the property buying frenzy that clearance rates weren't that marvelous. I'd rate 50% as pretty good. I went to quite a few auctions in Shortland St and many didn't sell on the day.
50% is hardly "dire straits", it's not the end of the world if a property doesn't sell at auction as it is often just the start of the marketing process. Try auction, move on to negotiation. Agents always seem cagey about telling prospective buyers how the property went at auction though. Amnesia seems common amongst agents.

up
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You and I have different memories, I'm sure there was quite a long phase of 80%, 90% clearance rates being the norm. Is there data on this? Amnesia is clearly common to at least one of us too.

I also have a memory of the definition of 'sold at auction' changing a year or so ago (possibly just for one of the agents?) allowing a sale in the next day or so to count in the stats, so we may not be comparing apples with apples.

It's still sold at auction because when it sells later it is still under the terms of the auction. This is not unreasonable although why a buyer would not insist upon it being conditional at this stage is strange to me. You'd have to really want it I guess.

As I said, I think this was reported on this site as a change of policy. Not arguing over which is right, just that it makes today's figures look better than figures from during the boom.

It would be good to see the historical data. Someone must know. All I recall was that even at the height properties still passed in with no bids and I spent a lot of time waiting to move on to the next offering.

Zachary, mfd is correct, 80-90% clearance rates were more the norm - so enough window dressing please.

Market still heading down. Listing volumes will increase from mid January and buyer confidence will continue to weaken adding to the pressure.

Excellent work Bayley's. It's certainly a better success rate than the others, but that's all it is. It's still a dismal clearance rate indicative of an ailing market.

Yes, I agree, a clearance rate of 50% or so is not good.

50% is really good in the current conditions. Really, really good.

Do you have the data? A link or something? I was actually there and I don't recall that. It often seemed like 80-90% if you just stayed for the first ten but that was because the ones most likely to sell are auctioned first.

Zachary, its quite possible you're suffering memory fade. Peter Thompson reported they used to achieve 80-90% clearance. Remember Barfoots are the people getting the low 30% now:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1152...

Hope this helps your recollection of when things were at the height of silliness and how it forms the basis of coming age of tears.

auction clearance rates were as high as 80 to 90 per cent on a good day

There was the odd good day but they were exceptional. That's why they said "good day", like, it was an exceptionally good day today in the auction room. I'd hazard a guess that sales didn't average 80-90%.

Zachary, then you're saying that Barfoots declared 30% clearance rate is overstating their performance also - hmmm

It's gone from the height of folly to the bum grazing lows of despair.

Harcourts in Hamilton actively promoted an 85% auction "success rate" for a very long time

Oh, poppy? you forgot to remind us that auckland prices have dropped by $200k .... Please dont forget this in your posts otherwise we might forget this myth !!

Eco Bird, is that you? Has it dropped that much already?

Its weaker than I thought.

I understand 75-95% clearance rates were relatively standard at the height of the boom. A clearance rate of 50% or so sounds pretty abysmal to me.

There may have been 50% sold but only a small number of homes
Using Bayleys sales figures to derive a percentage of sales is laughable
Since when was Bayleys anything more than a boutique REA ?
B & T is the premier company with the big sales numbers across Auckland
As for amnesia Zachs right it’s a REA prerequisite along with lying

Eleven of the sixteen properties listed as sold in the results page auctioned by Bayleys recently sold above the new 2017 RV values. Prime properties still getting good prices.

And the other 5 and the ones that were passed in. But all properties are "prime" properties according to the vendor but no necessarily so for the buyer. . A more interesting analysis would be on those that were passed in - comparing the bid price to the RV as this would give a feel for what the market believes those properties are worth.

The other five sold for just below their 2017RVs and well above their 2014 RVs. I would love to have recorded the highest bid for properties that didn't sell.
Except for Pleasant Road which was over a million below RV but nonetheless hundreds of thousands above 2014 RV.

Assuming that a sample of 16 were representative of a population, do you have any idea what the MoE (margin or error) would be? If you don't, then your comment is meaningless. Intuitively, you would expect some houses to see above 3017 RV values. It does not mean that the auction of 16 houses prices proves that "prime properties are still getting good prices".

The prime properties that sell at these particular auctions are fetching good prices.

OK, so you agree with me. If 5 "prime properties" sold at above valuation, but 95 prime properties don't, then the statement that "prime properties are selling above valuation" is meaningless.

I just deal with what is actually happening not hypotheticals.

But you don't though, do you.
Ironically all you are doing is talking in hypothetical rhetoric. Your key assumption by doing this is that you can dictate any hypothetical limiting distribution in order to make your results statistically significant.

As mentioned, your sampling is meaningless.
You take only the properties that have sold and then cherry pick from that, so you double dip on your selection bias.
Firstly you assume that transacted properties converge in distribution (very weak assumption even notwithstanding the sample size as well) to the true population. That is an incredibly flawed perspective in an imperfect auction market.
Secondly, from that already crappy sampling assumption, you then go and segregate the good from the bad under some general assumption.

Like everyone says, ZS, this is nothing but an exercise in futility. Any person who informs their purchasing decision on such rubbish is a fool.

Um, this article is about specific auction results, you know what properties sold for. A lot of people are interested in how well they match 2017 RVs.
I gave good reasons for why I segregated some properties.

Nymad
You have to admit Zachs “ hypothetical rhetoric” is hilarious

I just deal with what is actually happening not hypotheticals.

Nope. You're just trolling and being shown up for your lack of basic statistical understanding.

Yep, totally agree. Spot on. You can’t only take into account the ones that sell and ignore the ones that don’t. Selection bias.

Makes you wonder why they even bother publishing these results really.

I was talking about your selection bias, not theirs. I am sure given the chance they would like to keep the results quiet. They’re nothing to shout about.

No selection bias, just reporting the facts. Sorry you don't like them.

While you are reporting facts - I think you are trying to infer that those results apply to the whole population. The facts you are reporting only relate to the population you have chosen and nothing more.

That is the whole point of the comment. Your analysis can only relate to the population of properties sold as it doesn't include those that didn't sell - you are excluding a large portion of the population. You can't infer anything from the population you have used.

There's an enormous (and growing) interest in property investment in this country - people can't get enough of it. One only has to glance through this thread - or any other thread on property that appears on interest.co.nz - to gauge the unrelenting enthusiasm. (Property items gain far more attention than items on any other subject.)

After the 2014-16 upswing, prices are still holding well - such is the underlying strength of the market.

For Auckland, houses in the inner city suburbs are still fetching premium prices.

There are plenty of people here who would love auction clearance rates to drop to zero percent - and for prices to collapse....... But these people need to understand that property is far too sought-after in NZ for that to happen, or anything close to it.

TTP

TTP, ha-ha-ha - you're such a funny fella! You must have been laughing when you posted this blather. Its of course just fiddlesticks!

You made my day with this.

Hi R-P,

Compared with what you and others were saying here not so long ago, the market is doing pretty well.

I know you don't like it - but things are far from dire.

TTP

...you're right on one count, things are not dire yet. It's only the beginning. I thank you for providing the entertainment though :-)

Please don’t respond to the village idiot, it merely encourages him. Try to limit the conversation to the grown ups.

Dire is NZers not being able to afford to house themselves, not whether or not our property is desirable to people who do not live here. Their time is now up, and better if prices reflect what people can pay.

You're saying this like it's a good thing - usually the more popular an investment and the more aware of it the common man is, the riskier it is. The more people wanting to get in at any cost because they've seen others do well, the less the fundamentals are taken into account and the higher the risk of a dramatic fall or poor future returns. You're describing a warning sign as a positive.

The best money is usually made in some quiet corner, where the competition is less furious, unless you're particularly good at riding the waves and jumping off at the right time.

Talk about clutching at straws Zach
A psychologist might advise you you’re cherry picking results in a market downturned to bolster your belief
Sadly that is akin to paralysis when you face the fact you’ve not sold at peak for profit.

Auctions in Auckland are a fairly recent thing for ordinary properties. Probably done to make RE more liquid which wouldn't be a bad thing. Trouble is it made it harder to upgrade properties resulting in many people keeping their original properties and becoming accidental landlords.

How does a more liquid market make it harder to upgrade?

I too am perplexed by this gem of a statement.

It takes a brave man or a reckless wife to buy a house at auction while still needing to sell the old one first.

REAs advise auction is unconditional it’s in the contract
There’s no sudden change there everyone is informed of that fact

Sales at auctions are unconditional, so you can't buy a house subject to selling your own place, that's why it's harder to upgrade properties

Buying a house on condition that you sell yours first is not possible using auctions. You have to be quite brave to buy a house before selling your old one first.

ZS,

https://en.wikipedia.org/wiki/Market_liquidity

Don't worry about the whole article - the first paragraph should give you a good idea as to what market liquidity is.

If most houses sold on the day they were auctioned the property market would be considered a lot more liquid than the old conditional sale system that could drag on, especially conditions like having to sell a property first.
The trouble was that with the increasing popularity of auctions you had to buy at auction to get the popular (ie: house you want). This mean't taking the plunge to purchase before selling first. But wait, what if you don't sell first? What if you become a landlord? Stress gone.

Like renting houses is ever stress free for long Zach ?
Last tenants I had were a computer programmer head hunted by a multinational & his accountant wife
Even they managed to permanently mark the flooring in the lounge area
I told the property management not to bother doing a final check & when I fly in later a couple of weeks later
I face the result. You cannot trust any tenant period

The last tenant we had were a lovely young couple with a child - except they were a front! We had to enlist the aid of the local 'motorcycle club' to convince them to leave. The tenants knew all the ins and outs of the Tenancy Tribunal etc. and the time it would take, so a few dollars contributed to the club's sinking fund worked a treat...

...and! We just got back from the Gold Coast and the penthouse above us had this happen! Now tenants aren't all schoolies, but unless this apartment was owned by one of the parents ( who didn't care!) the owner has some work to do...
http://www.smh.com.au/queensland/schoolies-trash-hotel-room-post-gloatin...

BW
You’d think the skoolies aspect would be cleaned up long ago
That and the syringes on the beach before the sand tractor cleans them up for the day
Slackness in Australia by parents standing behind their deplorably self entitled children allows this level of destruction I note the weak police statement that it was a good year !
Australia’s Gold Coast is a little Hicksville but Sunshine Coast is actual Hicksville like the Wild West Of Old
By the way BW just talk face to face with your tenant & advise them you are moving into the house for family reasons. When dealing with them always start with all the things you agree on first. This attitude saved me a lot of money & time. Tenants generally are good people but also don’t care so much about your home in general.
There are always gem tenants you can leave on auto pilot yet even they will eventually request you upgrade
things because they’re bored and thinking of moving. Then a couple of months after you’ve upgraded they advise you they’re moving !

Careful what you wish for...once engaged with you so called club, you to are now wide open for exploitation. Be prepared to be extorted at some point...they don't forget.

Guess who put me onto them? The Tenancy Board (or whatever they were/are called!) in Wellington. This was for a Christchurch property, and they knew exactly who the 'tenants' were; and that they had a 'file as thick as your arm' outstanding. All we did was meet a pleasant young chap in the carpark of the BP station on Cranford Street, paid $50 for him to 'deliver the papers' and voila! They were gone that night, leaving half their belongings behind ( this was after months and months of 'doing the right thing' and getting nowhere)

Wow.. a disengaged landlord living elsewhere extorting a community they're not a part of.. imagine that!

Even they managed to permanently mark the flooring in the lounge area

My goodness.. someone drinking, eating or doing anything that could lead to spilling or marking the floor is preposterous! How dare they live and have mishaps like normal human beings, pay your mortgage for you, provide security to your asset and have the gall to leave a trace they once existed as more than a distant cash machine into your account?

You landlords are a funny bunch.

Tut tut Pinecone
You don’t think I own NZ property do you ?
The point is these fine tenants failed to advise they’d destroyed the flooring
I don’t see how I’m being unreasonable to expect they notify management of their damage ?
I wouldn’t call them “ normal” they were both extremely highly educated elites who you would expect to behave with a greater level of responsibility

Sorry Zachary...wrong. The market is no more or no less liquid than last year....you are confusing liquidity with expectations.
Property is still liquid in a declining market, just put your reserve at a $1. You'll sell.

Hi Zachary,

Have to compliment you on your command of the subject area and writing skills.

There are several people here trying to tackle you all at once........

But you fend them off with consummate ease.

With respect and admiration,

TTP

TTP, what is fending others off got to do with doing the deed to meet the need after getting married? I suggest you stick to the subject matter at hand :) Yeah I know it has a double meaning - just having fun!

Your so entertaining lol!

xx yours Poppy

He aims to entertain, he takes his role as village idiot very seriously indeed

Sales at auctions are unconditional, so you can't buy a house subject to selling your own place, that's why it's harder to upgrade properties

Yes.
But if the market is liquid, who cares.

The point ZS made was that he said liquidity was increasing but this was limiting selling/buying.
That doesn't make sense.

The point I was making was that high liquidity mean't you had to grab that slippery fish quickly before it slipped out of your hands. The only way to get it hooked was to go unconditional as soon as possible however only a few are willing to go unconditional before selling their own house first. I did it once but would never do it again, not without a well thought out plan B to hold and rent it out.

You might want to check what liquidity means because the problem you are describing would imply that the market is less liquid not more liquid.

Example: in a market that was perfectly liquid you could sell your house the day you bought your new one so your upgrading problem wouldn't exist.

I never really wrote that it was more liquid everywhere. While I didn't express it very clearly what I wanted to state was that auctions were an attempt to make it more liquid, an attempt that didn't really work. Some houses were liquid, others not so much. The house you want to buy, very liquid, the house you want to sell, not so liquid. See the problem?

Frankly, no

You’re in a hole, stop digging

No I'm not lol. I'm just trying to be nice to you guys, but no more! You're like retarded when it comes to property.

But you’re the guy who says household debt vs income is indefinitely sustainable at 170% cos that’s what you need to say to justify your belief (hope?) that house prices are perfectly sustainable at 10x income? So, err, sorry, who’s the one that is intellectually and developmentally challenged? ps we don’t use “retarded” anymore. Lol

I'm sure you guys understand that property liquidity can be improved and that liquidity considerations are important factors when choosing a property. However getting people to generally accept auctions as a way of buying and selling property has been a brilliant way of assisting property investors liquidity difficulties. What could be better than a four week campaign ending in a quick unconditional sale? I'm just not sure that this has been in the interests of those that want to upgrade their properties.
Sorry about grumpiness before. Too much nicotine gum!
Also if we can handle 170% household debt vs income currently then it is sustainable. Whether it can go further is another matter.

How many days Zach

Retarded AND incompetent.

TTP

Wrong again.
You are confusing liquidity with expectations.
Sure auctions can increase liquidity, but only in the case that expectations are matched.

What you are talking about are issues arising from imperfect expectations, not issues arising from liquidity. Liquidity isn't necessarily different for certain properties, but expectations and efficient bargaining outcomes are.

You guys are ridiculous pedants.

I don't know why you bother Zachary. BTW: Nice stats for Kohi in the latest QV report, it's still gaining after the election. Only up $6,000 to $1,756,000 but people voting with their money speak volumes louder than the doomsters. Wasn't it supposed to lead the downturn? They must have missed the memo.

Don’t know why Zach bothers ?
Spruiking is his passion

Good news Ex Expat, are there some latest figures out from QV?

Yes there are!
Price drop in Kohimarama: Has your home been hit? Check out the latest valuations
The report showed that of the city's most expensive suburbs, five - Remuera, Stanley Point, Epsom, Mission Bay and Orakei - dipped in value in the three months to the end of September.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11952937

I guess reality is staring to hit home for you DGZ.

What is reality? It has nothing to do with me...I just go to work everyday :-P

It's the leafy suburbs that drop the most, like they did in 1990. All those high salary wannabes that are used to carrying large debts without a second thought. It all began with their six figure student loan. Its these very people that have never seen a decent downturn and wanted to live the high life which under normal interest rates may have been out of their reach. In their eyes a downturn could never happen so no wonder it could all soon be toast.

Those that can truly afford these houses have nothing to worry about and they probably couldn't give a toss what their places are worth.

Your only what your worth after you minus what is owed.

Yes, thank god the truly wealthy will be okay, bless them.

Really, based on what evidence? You’ll be talking about benzine, rationing and coupons next. The Eastern Suburbs are full of Boomers who have seen it all. It’s Heavens holding pen with I suspect not much debt held at all on average. I have none, am still working, and am extremely financially conservative.

Ex Expat, good on you :) Agree with your debt free ways. I cannot see the sense in paying interest on anything that is at risk of declining or is actually declining in value - its bad debt. I receive considerable interest income - spread amongst several banks.

Are you suggesting Eastern suburbs Boomers would have largely avoided the temptation to accumulate a few rentals? - that's just dreamsville.

It's the Boomers that tapped their new found paper equity and just went for it! They are the worst offenders.

True and a lot of the are going to become unstuck as their property values dwindle.

Haha, nice passive aggressive comment on bad debt. I too have bank deposits, albeit it’s a mugs investment as a long term strategy as it doesn’t keep up with inflation and it’s a risk with OBR. My goal is to be in the strongest position to profit when the recession hits. Providing private equity to cash strapped businesses when the banks desert them is the real way to make money.

Ex Expat, you sound like an aspiring white knight with a preset vision that the next recovery will be an automated event out of a textbook. Hopefully it is.

My largest investment is a grandparented arrangement with Rabo. 100% of the principal and any future interest earned is covered by the parent bank in Netherlands. Its not an OBR concern. The parental guarantee was removed in May 2015 for new deposits. As for the not keeping up with inflation - what inflation? Outside of the ever vulnerable construction sector there isn't any. I have heard others call term deposits a mug's game but have since discovered they are unprepared borrowers and prolific spenders.

Isn't that a variant of fake news? Old news?

There was link in the Herald article on my PC that’s not available on my iPad. I’m sure you can find the list if you look on a pc.

"House prices have more to fall, economists say" (from the Land that owns our banking system)
http://www.afr.com/real-estate/house-prices-have-more-to-fall-economists...

Hi bw,

But whether house prices will actually fall in the short-term is an entirely different matter.

Longer term, house prices will almost certainly continue rising. (That's what most investors are focused on.)

TTP

How long term are you talking though? I think Somebody on this site wrote that the last few years growth in Auckland has been the equivalent of something like 27 years of average house price growth following the trend.

Definition of long-term is arbitrary - but often assumed to be beyond 5 years with regard to housing markets.

How long is the "last few years"?

TTP

The great thing is that there is as much debt funding as you want, can take!.

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Contractors usually have their own gear.

These auction reports quickly deteriorate into trolling opportunities and tit-for-tat battles with the protagonists. That doesn't mean that they're completely worthless. Grappling with trolls is all part of the digital experience.

I'd have to say, J.C., that your definition of trolling is very broad indeed. Greg Ninness publishes an article describing a "big week at Bayley's auction rooms". 37 properties offerred in Auckland and 18 sell, 16 of them houses or units. ZS checks them out and reports back that 11 of the 16 sold for more than their 2017 RVs. Some would describe this as searingly on topic while you claim it is trolling.

Well spoken, Zachary!

J.C. needs to think again.

TTP

Thanks TTP.

If it weren't "trolling", then you would likely to be able to handle basic questions about statistical validation and relevance of a sample to a representation of a market. But you cannot. Therefore, there's a high likelihood that you're trolling.

Comparing recent sales prices with RVs is perfectly reasonable and very topical. You're kind of obsessed with this. Just don't read my comments and don't respond to them if they trigger you so much. Why not make a comment about what this article is about like I do instead of following me around?

Not sure if on comment or not – still think a manageable and easy does it “correction” is at play – some of the notable market drivers are no longer so prevalent as before – but there is nothing currently upsetting the boat in any dramatic fashion.
In this environment a downward movement in price is hardly going to be some sort of dramatic heart stopping “crash” – employment stable, interest rates, whilst showing an upward trend – hardly throwing all and sundry under the bus, rental yields – not overly pretty in some cases but hardly collapsing.
So for those looking for that “first rung” – be patient, the market may be slowly moving in your favour – keep saving and actively looking –no hurry, it’s a long term proposition / commitment after all.
Sometimes all a bit too excitable for common sense to prevail – it’s simply a market, with all market variables at play at any given point in time.

Or they can accept houses are never going to be as affordable again without a significant crash, and then the likelihood of the government and banks steering out of that path is high. Either save for a rung at a similar scale to now or move. There is no longer affordable housing in most major cities in NZ. Once the damage is done it can take generations to right itself, (more likely to need significant wage changes). Whether we will still be alive when it does is another matter.