Sales rates lower at Bayleys' latest Auckland auctions, higher down the line

This two bedroom home unit in Blenheim sold for $306,000.

Things were a bit livelier at Bayleys' auctions outside Auckland last week, with the Auckland auctions a bit more subdued.

In Auckland Bayleys marketed 34 residential properties for sale by auction last week and achieved sales on 11 of them (32%).

Most of the remainder were passed in for sale by negotiation, although two had their auctions postponed and one was withdrawn from sale.

At Bayleys' Hamilton auction, a mix of 10 rural and urban properties were offered with under the hammer sales achieved on four of them, giving an overall clearance rate of 40%.

At the Marlborough auction four properties were offered and two sold under the hammer, giving a 50% clearance rate.

We also have the auction results for Eves Real Estate in Tauranga, which auctioned 21 properties last week and achieved sales on 11 of them, giving a clearance rate of 52%.

The results from all of those auctions, with photos and details of all the properties offered and the prices achieved on those that sold, are available on our Residential Auction Results page.

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

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82 Comments

Yes the low sales is slowly working its way down the country.

2018- THE YEAR OF THE CRASH.

You forgot the line about the $200k loss

In fact, Bayleys latest figures aren't too bad at all.

The property market is proving more robust than a number of people here will dare admit.

TTP

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11

A robust turd still stinks

Interesting comments regarding the sale of a life style property on the West Coast.
'''Buyers should be aware that the current RV will not be entertained''
Not sure if that means they want more or less.

Possibly means no tea and scones at negotiations if RV is mentioned.

I received today the October sales for the Eastern Suburbs. 36 sales, some over some under the new 2017 CV, interestingly the avg sale price ended up being 1.00 to the 2017 CV, the mean sale price 0.98 to the new CV, so very very close indeed

Yvil, clenching onto October sales as a benchmark of confidence? - we are now in December. This is like grabbing at tuffs of grass while dangling over a cliff! The market is rapidly deteriorating. It's a bit like celebrating the latest (out of date) November QV sales data. What a waste of alcohol that was!

Not clenching onto anything, just sharing some data I got today for those interested

Hmm, sounds like the method to calculate the new RV was just to use the October averages to me....

The ratio of auction sales to real estate media releases about real estate auctions is starting to look dire. They really need to think through their comms strategy better. The sheeple are already drowning in property propaganda.

Same grim figures, different day. Lower interest rates have failed to ignite any interest - more cuts won't either. Vendors need to meet today's buyers with massive discounts on price. It's only going to be worse tomorrow if they find themselves in a forced sale situation (that's if they're not already)!

It does bother me that some FHB might be getting spruiked into buying now. Prices still way too high.

Latest November QV report appears to be out of date then DGZ, Zachary?

I guess the consolidation of asset holdings will go into full swing after the Christmas and New Year season. The miniscule rises in prices for some anecdotal properties are likely to be a bull trap for prospective buyers. It looked pretty inane that hordes of buyers actually bought in places like Te Puke, Huntly, Pokeno, Flexmere and the likes with the speculative hopes that the wheels will keep rolling.

Although Auckland was the initiator for the downward trend, the real sting will come from the provincial and small towns when the heat comes back to the original source - Auckland.

The oil is no longer there to grease the wheels. Too little too late, too much, too late. Policies and its implementations are always out of date and this may further drive the doward trend with higher velocity.

Inventories thoughout the country are continuing to build as we speak. As sellers and buyers expectation gap widens, inventory turnovers grinds to a slow motion. With the velocity of monies slows in the property market, a period of free fall for property prices are not out of the question

We are beginning to see the demise of demand as credit is getting harder to obtain, buying frenzy has since peaked and subsided and current sentiments of most people in the market are bleak and many other buyers and prospective investors had given up on this asset class.

Hard times ahead for many I guess.

Will be interesting to see consumer spending in Q2 2018. If there are media reports about hospitality and F&B doing it tough, that could be an interesting indicator. Also, car sales. However, don't expect to see much difference from FMCG.

Yes I think all you property negatives are probably right?
The market is going to crash unbelievably to the point where every investor,in the country will have their property on the market to sell!
Things are going to get so dire that life won’t be worth living and there will be no rental properties available as all,of you prospective buyers will have bought for your own occupation.
You will be able to pick,them up so cheap,it isn’t funny.
You will be able to name your price and get it!
You will be having a enjoyable Xmas knowing this won’t you?
Do you feel so much better now?

If it's any consolation, these "property negatives" are likely to have no more mystical powers than you to predict the future. You share a common bond.

Chin up, old boy, you’ll be ok.

Come with meeeeee
And you'll seeeeee
A world
Of pure imaginaaaaation

Where do houses go when they stop being used as rentals?

Sounds about accurate.

Back to where they were 3-4 years ago will be fine. Right before this buying mania took off. Just a normal typical market for average incomes.

@John Wheeler - one of these days you can say you were right!, but when is anyone's guess....
Beware the next Boom (after the Crash)!

If we do have a major housing crash it seems probable that our attitudes to housing in the future will be more like our overall attitudes to investing in the share market after the 1987 crash.

Yep. It would be a huge psychological shock.

Which will mean it'll be a major opportunity for those that use logic rather than emotion when making investment decisions... so long as the banks don't go stupidly cautious on their lending criteria. I'm certainly hoping that the Australasian RE market drifts down slowly for the next 5 or so years and the international equities don't.. That should leave me sitting pretty to snap up a good property or two.

Thats right.

But not many use logic. Its normally fear. Fear of the market getting out of reach, fear of losing money again.

You will be alright, but a lot of people out there wont.

The various Australasian markets (except Auckland) are due to move into oversupply in the next 1 - 4 years. They might move abruptly.

Auckland is likely to have undersupply until 2040s and may never recover.

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Yes TM2 most non leveraged kiwis want things to drop, but I would suggest that most just want the balance between NZ wages and house ownership to return to what it was before domestic and foreign speculators went nuts in a junkie like frenzy on cheap money and leverage.

If that leads to an Icelandic like reset and tanks foreign and domestic speculators...better that than the ongoing destruction of wage earners dreams (home ownership) and retirees nest eggs (savings....that thing banks used to give a crap about).

PS those that leveraged up in Te Puke, Huntly, Pokeno, and Flexmere deserve what they get.

No point replying to TM2. He is so deep in the rabbit hole that he will deny everything that do not suit him till the day his hole (Christchurch properties) cave in on him.

TM2 – interestingly enough you have just rather accurately described a couple of South Western US Sates following the GFC – apart from the xmas thing maybe.
And no – not a wind-up – obviously very different markets, very different financing and very different times.
I guess my point being – what would have been perceived as absolutely ridiculous (and fortunes were made by those few betting on “absolutely ridiculous”) actually came to be.
Outright certainties in the market can be hard to find – managed risk more the norm – “managed” and “risk” being probably points of never ending conjecture.

We all know that Auckland is expensive for what you get in housing!
Reality is that at some stage it would flatten out at best but this is so.ely due to measures that have been brought in by the Reserve Bank and nothing else.
Housing is still just as affordable in most parts of NZ as it always has and if you can’t see that then you need to open your eyes.
Opportunities are always available for those that have their eyes open and prepared to accept them!

This is a great start but we probably need a long period of these sorts of clearance rates to bring down prices. A stagnant/slowly decreasing housing market over the long term would be ideal for everyone.

The issue is that in the long term, clearance rates will climb again.

They won't stay low forever.

TTP

Yeah but they may go up in line with wages and affordability, which is fine.

Not take off like a rocket in 3-4 years and property that was worth 600K is now being marketed for 1.2 mill. Which is nuts.

TTP, your very own interpretation of long term (eight years) clearance rates will climb again - a very safe thing to say.

Meanwhile, in the interim, all hell is about to break loose - impatient sellers are piling up by the day! You missed out that part lol!

A lots going to happen in eight years!

30% clearance seems to be the norm at the moment, which is fine unless you are one of the other 70%

Speaking of clearances, I keep waiting for JK's recent sale to be recorded;

https://homes.co.nz/app/address/auckland/parnell/103-st-stephens-avenue/...

I don't think it will ever be recorded unfortunately. Have you driven past it lately? The build on his ex-tennis court is really coming up thick and fast. I think he might be able to move in by June 2018!

Hope it doesn't upset the feng shui.

I don't think it will ever be recorded unfortunately.

Why not?

I am sure he would have added some sort of confidential clause in the S&P agreement to prevent the selling price from being published.

How interesting, I had no idea you could opt out from the price becoming part of public record under the land transfer process/legislation. If not a matter of public record, how would the IRD apply a 'bright line' test - and how would QV do its work with respect to council (rating) re-valuations?.

I did understand that you could (via a S&P agreement) prevent disclosure of the sale price for the term of that agreement but had no idea that would have any validity beyond the date of settlement when the S&P agreement ceases to have effect and the land transfer process kicks in.

Must research it - I can think of a number of instances where opting out of the public record would be preferable and so am surprised I hadn't heard of the option before.

It seems very curious that it is not advertised or advised to general sellers as a potential option.. that or I need to get new lawyers.

Kate, I would be very surprised if IRD were denied access to any sales prices. I have seen an instance where a sale price was not publicly disclosed. I suspect it settled well under the most recent and very generous CV. It was a real estate agents own home in the patch where he operated too. If it were either close or over the latest CV, trust me, it would have been made public.

I wonder being that we are on the unhappy part of this credit cycle, will we see more sales prices suppressed from general public record. What the people don't know won't hurt them lol!

Commercial sensitivity?

Up here you can get all the previous sales details of any property as well as a plethora of advanced information all online for free.& mapping every available property in any area along with property taxes etc.
NZs very behind the times in information on property
Perhaps that’s why people try and make sense of it here talking street numbers etc Laughable !
Then again another idiot just blew up a bomb in Times Square so maybe NZ perhaps safer

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Here's the reality of the housing situation. Shortage of teachers. The social consequences have reached the surface. What will we do when teachers, nurses & police leave Akl or avoid it. Factories, head offices & the average kiwi & immigrant seeks greener pastures where home ownership is achievable. It'll be the elitist land gentry utopia every jaffa & wealthy migrant dreams of. Just be sure to have enough for boarding school, private health insurance, your kids house deposit & private security guards.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11957620

Bluff
Sames happening in NY & SFran
Working classes can’t afford city rents
There really is no upper limit here on what rich will pay to live where they choose & much has been written here about lack of affordable accommodation for those that make these cities tick everyday.

Time to put in some very low offers on these hyped up phoney prices. 20% below the asking price for a start. That million dollar home should have an offer of only 800k. Remember your due diligence incase something comes up . Oh wait ! I just remembered that Auckland medium house prices have actually crashed 200k since March this year, and there asking price will be based on there new impressive Council R.V. . I am going to withdraw my offer ! Yes i think 600k sounds more like it. But wait ! Once the momentum of the property decline kicks in hard early next year from all the new listing from panic sellers then that 600k house will only be worth 300k. Thats a 70% drop from asking price. Actually i am going to do nothing and just wait, easy.

2018 - THE YEAR OF THE CRASH.

70% is a bit extreme! For prices to drop that much would suggest that either our economy had imploded and massive job losses followed or interest rates had skyrocketed.

IMO, more likely a 25 - 30% correction (in Auckland) from the speculation and foreign money fueled, overvalued prices we have at the moment.

Back to 2012-2013 prices be great. Its what NZers can afford before foreign money started coming in.

Love your work John Wheeler.

Wonder what could happen if people need to sell and no one wants to buy as buyers still think the market will drop more.

Interesting times indeed.

Not a lot of movement yet John Wheeler
At least not in areas I’m interested in
Central Auckland up
Coastal NShore a mere 1% drop
No cause to break open the champagne yet

John Wheeler, you are having a shocker!
You have got no credibility at all when you continually go on about dropping prices as much as 70%,
You have to be taking the piss Surely!
If you aren’t, are you prepared to put your money where your mouth is and put up a wager, with the stake to go to charity, or are you just being dumb?

The Man - Actually im not taking the piss. Most people on this forum think about a property crash due to domestic reasons. There is way more to the equation than just what is happening in little old NZ. I suggest you do some study on the Financial Reserve ( and no im not talking about our financial reserve ). I have no need to put up a wager for charity because I give alot of money to charity every time I sell one of my developments, and thats been 40 so far. No offence The Man, but I do believe you are a Real Estate Agent that has never owned a shred of property in your life, I can tell by your comments , your desperate to keep your job. And I have learnt very quickly in my game to never trust Agents.

2018 - THE YEAR OF THE CRASH.

Back yourself John. I will bet $1,000 average house prices do not crash by more than 35% in 2018. Easy money for you if you actually believe what you are saying...

Charity of your choice is fine. If you are such a philanthropist taking an easy $1,000 from me will be a breeze.

HeavyG
I’ll hold your bet in trust
Send to : M&A 10022 NY

As long as John agrees.

If you look at the charts for NZ RE 2007 - 2009 https://www.rbnz.govt.nz/statistics/key-graphs/key-graph-house-price-values - a 10% drop for about 12 months. That's about what we have had now. And if you look at the actual growth rates - pre 2007 makes post 2013 look quite subdued.

History would suggest 5 - 6 years of sub 5% PA capital gains.

Nimbo
I’d agree but disagree
The Chinese factor that grossly inflated Auckland house prices was the major cause this time.
This was a new paradigm that has yet to finish playing out
Will these Chinese sell or retain their Auckland properties ?
If so in what numbers ?
I do believe the trend is down but as yet don’t believe anyone knows how far and Central Ak has seen some gains in price.

If their stock market boom/busts are anything to go by, then I think they might sell heavily if there's a significant change in market sentiment...(given the speculative nature of the buying)

Several times in the past authorities have had cause to intervene to stem Shanghai stock market losses. Asian Financial Crisis same, Hong Kong's Hang Seng was propped up by authorities state pension fund I recal. Herd get excited on the way up, herd panic on the way down. It's almost as like there is a lack of understanding of what buy and hold means. It's a pure gambling mentality.

Euphoria - Borrow - buy - anxiety - panic - sell.......then go into hiding.

I think, apart from the obvious overleveraging factor, this is another one of the reasons the coming real estate slump will be unusual in that the downward spiral could easily become self sustaining as the panic REALLY sets in.

Unlike China, authorities cannot decree that speculators be insulated from losses on real estate. NZ does not work like that. For starters the favoured party National is no longer in Government!

I just can’t see these foreign buyers being people who will hold onto property here if there are material falls. Surely they will head for the exits. I suspect their knowledge of our housing market was limited to the fact prices were going up, and that’s all they needed to know. I suspect they are heavily reliant on Chinese language information, which is almost exclusively sales pitches by agents. I really don’t think they look at us, a tiny island economy at the bottom of the world, as a safe haven for their money. If the market goes seriously into reverse these owners will surely cram the exits.

I'm inclined to agree, I don't think they had any idea as to where they were buying, the difference in suburbs/neighbourhoods/regions, just Auckland or Wellington/Hamilton/a.n.other region, sold sight unseen with the promise of inexhaustible tax free capital gains..

Yep. They look like a flight risk

What do you think if the NZD falls as the result of a global/domestic event (regardless of what house prices are doing..)?

I doubt it would matter much. If house prices persistently and materially fall, I suspect these foreign buyers will disappear. Do they really have any idea as to what the long term value of houses here is? Doubt it. They are momentum investors, if that momentum goes into reverse so will they. I feel a bit sorry for them really, it will be no fun trying to get rid of a house on the other side of the world into which you have tipped a significant chunk of your life savings.

I feel sorry for first home buyers who might have scrimped together all their current life savings (as short as their life may be) only to be outbid by these investors on the other side of the world.

Haha, yes indeed, I must admit my sympathy for offshore buyers who take a bath does not run deep

don't agree, they are buying a bolt hole, clean air, safe place, education, health. The thousands of empty houses speak to not needing the income, just buying long term landing place.

But they’re not buying residency, merely a house? They have no right to live in it, so how can this be a bolt hole for them? And if their money is out of China, they don’t need to repatriate it back there, but neither do they need to keep it here.

Have you got any data to back up the claim of thousands of empty houses? And I mean can you demonstrate that it is more than the usual number of houses that are temporarily empty due to recent/upcoming sales or change of tenants.

No he hasn’t, the claim has been made many times and every time it gets knocked down

The last census had about 33,000 homes empty in Auckland... it is a subject for discussion as to whether that number is meaningful or has any bearing on housing availability.

A friend of mine delivers mail for DX on a wee motorbike. A while back he told me of this one street, full of empty houses, where he delivers mail for two Chinese people, who seem to own that whole street.

Bobster
You’re a troller

Oh, gosh, sorry to upset you, which bit was troley?

There is no data, everyone's is just guessing since nz don't hold a full registry of who owns what. But I had seen some Chinese borrowing both oversea and local to the hilt and some have so deep pockets that they can hold for eternity. Very hard to say indeed

I recall 2006 - 2007 and everyone was saying the Americans were buying all of our coastal property. Dont hear much about it these days.

I think that you have it backwards. The chinese that are investing in NZ have been taking a loss due to the loss in value of the NZD. As the NZD depreciates, the value of any investment decreases as measured by the value in CNY. The more the NZD depreciates, or the higher the CNY appreciates, the larger their loss.

Oh yes I recall that uproar also.. Americans are buying NZ and on and on. But boy did they get their fingers burnt with those purchases.

Nimbo, if you like statistical analysis - then this thread contemplating the "Magic money" or missing billions is super interesting;

https://publicaddress.net/speaker/house-prices-and-the-magic-money/

Figures 3. and 4. being the 'crux' of the analysis.

Yeah quite interesting. A lot of missing billions since 2003. That's 15 years ago. Surely someone must know where it came from. A big chunk of the missing billions were from pre 2007 - surprising the author couldn't draw more of a conclusion in 2015. Thanks for sharing.