Sales rates were down at Barfoot & Thompson's latest auctions but the Pukekohe auction was the standout with a 50% sales rate

It was hard work at Barfoot & Thompson's latest auctions with sales achieved on less than a third of the properties offered.

The agency marketed 93 properties for sale by auction last week and achieved sales on 26 of them, giving an overall sales clearance rate of 29%.

The bright spots were the Pukekohe auction, where half of the properties were sold, and the Shortland Street auctions on September 4 and 7, and the North Shore auction where the clearance rates were 40% or more.

However at the big Manukau auction where most of the properties offered were in suburbs such as Flat Bush, Papatoetoe, Otahuhu, Beachlands and Half Moon Bay, 21 properties were on the order of sale but only six (22%) were sold. 

The cheapest properties sold were a CBD apartment near the Auckland High Court which went for $533,000 and a three bedroom house on a 677 square metre section at Otara that fetched $540,000.

The most expensive sale was a four bedroom house on a 779 square metre section at Takapuna that went for $1.815 million.

Details of the individual properties offered and the prices achieved on most of those that sold are available on our Residential Auction Results page.

Barfoot & Thompson Auction Results 3-9 September 2018
Date Venue Sold Not Sold Total % Sold
4 September On site 2 6 8 25%
4 September Manukau 6 21 27 22%
4 September  Shortland St, CBD. 2 3 5 40%
5 September Shortland St. (Mortgagee/High Court) 1 4 5 20%
5 September Whangarei 0 2 2 0
5 September Shortland St 3 11 14 21%
5 September Pukekohe 3 3 6 50%
6 September Shortland St 1 3 4 25%
6 September North Shore 5 6 11 45%
7 September Shortland St, CBD. 3 4 7 43%
Total All venues 26 63 89 29%

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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82 Comments

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Hahaha. TTP, Nic Johnson, fellas, come quick!

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Holy moly what a spring rebound

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Don't worry, haven't you heard:

Blue skies and not too many clouds on the horizon for the property market this summer

This result before the foreign buyer ban! Gulp.

Hahah...nice one ...LOL

Lol.. you're on a roll today.. you're outdoing nzdan.. ;)

Woke up this morning and my house seemed very different. I'm sure it had five bedrooms upstairs last night but when I woke up this morning I was in the living room and the stairs had disappeared. Did someone steal half my house overnight? I can't find it anywhere!

Maybe the same place ya missing marbles are ;)

Not so simple Simon! Well done.

Do you suffer from lost marbles syndrome. .

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29% sales success rate, really wow. And some say that the market has bottomed out. You've got to be kidding.

Why would anyone in their senses buy the existing damp houses when they would get better value through KB...

A) because it is literally a lottery to get a chance to buy a KB home.
B) at 500k in regions it is still out of most FHB price range.
C) in many regions, the kiwi dream of a 600sqm section for the Dog and kids is still possible at below 500k - why would you want to spend 500k on a town house suitable for retirees as your first home esp if your handy and have been watching the block and are keen to 'reno' your way to 100k plus tax free equity gains to be used to buy the next one and or a rental.

You do realise this ingrained kiwi culture that only gets more ingrained after every property boom we have is going nowhere fast

If the land is that much cheaper in the regions then when kiwibuild gets there eventually, they won't have to jam them onto 200m2 sections. There would seriously be nothing wrong with the KB houses on a 350m2 section for raising a couple kids and a dog. Might not be pet pony/lamb friendly, but kids and a dog would be fine.

Even the Papakura ones would be so much better with an extra metre or two of section width taking them to maybe 220-240ish m2.

edit: apparently the KB ones are ~260m2. They don't feel like it.

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Obviously this weeks results are merely an oscillation, with auction results consistently at 50% for several months now. The Auckland market has proven very resilient and the DGMers are now running for cover.;)

The hits just keep coming don't they. If I wasn't so lazy I should start a greatest quotes of 2018 list.

Poor TTP, burned again

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The last I heard was that vendors were adjusting to the less confident buyer - obviously more adjustment is required. What's up with the uptick in mortgagee auctions then? Given the weakening confidence, it's easy to think its just the beginning.....

Rising level of mortgagee non-sales... What's it say about the vibrancy of the market when 80% of mortgagee sales don't sell.

That is really quite worrying. Anyone fancy doing a bit of homework on the mortgagee sales to find out when they were bought? My guess is that Uncle Westpac and Aunty ANZ our generous Australian relatives, may not be too happy with us if they can't even get their loan covered at Auction!

Aren't you the king of data mining at LINZ? Take a break from spamming Stuff and you will likely find the time to do some research.

Stuff is too much fun Ex Expat, albeit the standard of reporting is very myopic and obviously driven by the vested interests. Knowing how you can't resist a comment who are you over there? At least I'm consistent with my name and message for the youth of the Country to be very careful about getting involved in the bullshit that so many have waded into.

Also there are even more heavily indebted fools on Stuff than there are here so I have more people to play with.... albeit the censorship is a bit of a bugger sometimes.

I don't visit Stuff on a regular basis or comment there (Herald is bad enough for Journalism).. Someone linked to a story and I saw your name in the comments.

Stuff comments? aka the cesspit? They are only gnats whisker above youtube video comments in my experience.

I've attempted to get a link and reference to interest.co.nz onto Stuff but they always censor it... it would be good if a few kids got a wider perspective than the drivel that gets fed to them there and on the Herald. Both sites seem to be trying to 'brainwash' the property cult. I've got kids as I believe you do and I would hate for them to wade into the top of the market just to prop up someone else's retirement fund. The market since 2013 was never going to end well, but still kids are being offered 6-7 times earnings and interest only mortgages to prop it all up. It's just not right, no other generation was given such a long rope to hang themselves with. If people have bought the bubble, I can't help them and many of the speculators I have little time for, I guess I've seen too much of the negative effects of debt on marriages, families, kids and communities to wish it on a whole generation of New Zealanders - we've lost half a generation already.

My biggest regret was not buying property in my late 20s. I had the income, but blew it on travel and other frivolities, then had similar discussions to those in these articles about the merits of renting over owning.

I have made my way in the world with no help from parents etc and I consider close to 20 years of my life to have been overly obsessed with saving a deposit and paying off the mortgage. I want better for my children. Relieved of the shackles of a mortgage they may find a different way in life.

My wife and I have been open with our children about the content of our wills in that one way or another they are guaranteed to inherit sufficient money for a more modest debt free home in Auckland or a significant deposit for one similar to the quality we have now. They also have the option of simply moving into the one we have now and we downsize into the one we are looking to purchase early next year.

Ex Expat, I think its sad that someone who proclaims to be financially comfortable still carries such regrets. Travel is fun, I have done plenty and plan to do much more.

The disenfranchised need not wish these precious days to pass unfulfilled.

I still have children at home. There's only so long you can expect them to survive on noodles while you travel.

...that's a bit disrespectful to those in genuine hardship don't you think? There's more to life than amassing property portfolios and unnecessary stress causing debt. If your kids have a balanced upbringing, they should flourish in the real world and over time build wealth independently of inheritance.

It's a bit depressing if parents can't imagine their kids future being filled with hope and financial opportunities like ours was.

This is one of the reasons I packed up and moved away from Auckland. I couldn't really see the future of my boy working his arsx off for a deposit on his first home in Auckland. Now he's on his last year at one of the top schools in Aust (state funded independent school) and soon sitting for his meds school exam. Once he's graduated, I am done, no need to fund him for his future.

Does suggest we've really let society go in the wrong direction if we've reduced social mobility to the point you reckon your kids are dependent on an inheritance if they're to build a reasonable life in their place of birth.

I was brought up in a modest lower middle class home. Both parents worked. We went to State schools. Each sibling had a bedroom. The family had one car, we watched a rented colour TV and holidayed rarely unless it was staying with relatives. We certainly never went anywhere by airplane. The family home last sold for $875,000 in 2017. That home is easily affordable IF my children choose to revisit that lifestyle, however why should I limit them to that when I have brought them up in a very different environment? In short, I choose to allow them to maintain the lifestyle they've become used to, if they want to remain in the same Tribe.

FYI: My family home has double the floor area of my parent's home and is situated on 60% more land than theirs. The expectations have changed in 40 years.

My own family's example:

My parents bought their first house through a Housing Corp ballot that helped foster supply. Before that my father studied full time at university while they had one child at home (Bursary, Family Benefit).

They bought a house in Auckland later on (typical 1960s build, like the many built at the time when there was a focus on increasing supply) at three times my dad's income, paid it off a few years later while my mother was a stay at home mum. Had a black and white tv initially (hand-me-down).

Similarly, all their siblings worked average jobs (often single income) and bought typical houses at affordable prices.

They sold their's for quite a lot a few years ago (right at the peak) because it had a lot of land (enough for another four or five houses, more if terrace houses).

By international measures, $875,000 isn't particularly affordable relative to median incomes...more a level of acclimatisation in our Stockholme Syndrome market). It's going to mean they'll have to be in pretty high paying fields, likely have two people working full time, and probably defer having kids till later in life. At least, for many it would. Probably only affordable if credit stays very cheap for a reasonably long time too.

Nothing wrong with you giving your kids a great start, at all.

My general stance is we're better to design our systems in a way to increase social mobility for the hardworking, rather than the opposite. E.g. it's not the first time in NZ's history the country has had a shortage of affordable housing.

Hi Ex Expat.

I completely understand your concerns and the breakdown of the system is going to put a huge burden on society. Wouldn't it be nice if your kids could be independent of you without having to leave the area they've grown up in to move to a cheaper part of the Country. How many Grandparents are missing out on time with Grandchildren who have left the Country to earn a crust or are on the other side of the Country. How much pressure does that put on marriages when there isn't the wider support of extended family nearby. The banks have created this catastrophe because they have never been properly regulated and successive Governments have turned a blind eye to the social issues that have been created by a debt explosion. It is not just Auckland, it is a disease of the Western World. Maybe at the end of the next downturn things will change. I have three kids and they are apathetic towards NZ at the moment and I wouldn't be surprised if at least two of them move abroad in the next couple of years.

See above. As I've said before, I'm encouraging them to move offshore. It worked well for me.

Similar boat here, I'm just shy over 30 and spend the better part of my 20's partying most weekends. I'd be more comfortable now had I been more frivolous with my money and bought myself a house much sooner. But i wouldn't have had fun!

We were extremely fortunate to buy where we did and for how much we paid last year as it effectively rewound the clock. Our mortgage will only just cover a 20% deposit on a Kiwibuild property.

The total number sold is quite low, well lower than even the recent average sale numbers.

This is far more indicative than the low sales rate.

Had a chat with my landlord the other day, a full time property professional who has been in the business for years. A definite "doom and gloom merchant".

Interesting to observe the pettiness of the DGM above - who are being fed scraps.

Indeed, it has been slim pickings for them......

So much so, that Retired-Poppy spends most of the time in-hiding these days. Greg's column in the weekend (concerning house price stability) really knocked the stuffing out of him - and others.

TTP

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There are none so blind as those who will not see.

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I've never said I was confident house prices are going to fall.

I have pointed out continuously that working class people being able to afford houses here is not doom and gloom. If there's a doom and gloom scenario - 90% of the country is already in it.

TTP, is this honestly the best you can come up with? Hardly in hiding dude. You pine for my presence daily do you? Too much time on a Real Estate Agents hands perhaps? I hardly think people need me repeatedly reminding them of the global risks that are already in plain sight......

Anyway, cheer up buddy. What will be, will be ;-)

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Mon, 10/09/2018 - 16:58

"Auction clearance rates in Auckland are now commonly around 40-50% - and sometimes more than that.

Prior to June 2018, clearance rates at these levels were a rarity and - surprise, surprise - the DGM embraced the lower rates with unmitigated enthusiasm.

If the DGM dislike the re-emergence of higher auction clearance rates, then tough!"

Author unknown.

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What a difference one day makes.

TTP - can I direct you to a quote you made yesterday.

'Your rant above brings to mind the time-honoured wisdom: "When you're in a hole, stop digging".

TTP'

(TTP 10/09/18)

Hi Nic Johnson,

I could respond to your comment above - but I'm reminded of the time-honoured wisdom: "Arguing with a fool only makes you look like one".

TTP

Was that not a response?

D'oh!

From what I have seen, the houses on the market at the moment are either super expensive in the DGZ or poor quality homes (ugly as or plaster) with sellers asking too much. That being said, I have found 4 decent homes in the last 6 months and they all sold at Auction.

Thanks Greg - for some reason the gloomier headline cheered me up!

What does a negative person like you do for fun ? The market will decide where it goes from here no amount of wishful thinking either way will effect it. Why get so hung up with house prices it appears an obsession ? What is it you are looking for or wishing for ?

Hi Shoreman

I'm actually a very positive person and can see a whole swathe of opportunities on the horizon. I would also like the young to be able to have a chance in life without being crippled by rent or debt.

That being said I think that you're probably more hung up on house prices than I am. I'm just having a bit of fun poking the over leveraged and while I do enjoy a mental joust, sadly all of the smarter commentators are already on my side of the fence.

Understanding that markets go down as well as up, doesn't make you a negative person and sometimes the best form of action is inaction. But they don't tell you that at the property seminars that are sponsored by the banks. Did you know that the ANZ are the lead sponsor of the NZPIF?

Oh yeah, I'm not a massive fan of under-regulated banking either.

This really does point to your character. Having fun poking the over leveraged. Every single day, every single property article whether it’s positive or negative. Trolling people who have had a go with smugness. No idea about their status or situation. No thought about their stress or personal well being. Over leverage at this point in the cycle would not be “fun” and is likely to get worse. Why rub it in? You literally have no life. Perhaps you should stay under your trolling bridge or stay on the Stuff comments section with other bottom feeders.

'This really does point to your character'

edited as my previous was unfair.

I'm very sorry that some people who weren't equipped to deal with the risk of too much leverage in a downturn have somehow been persuaded by financial advisors and the banks that it was I good idea to do so and take on too much debt that is not their fault as they weren't being greedy about house price appreciation expectations and only borrowed because 10% per annum sounded really realistic with wage growth at 1.5%..

God bless Erehorn and her negative gearing.

Nic

do you understand how stupid you sound? well we borrowed the money to rip off the young and they've stopped paying us and some people are telling us that the houses we borrowed money to buy are worth less than we paid for them, because the banks have tightened up their lending and there are no foreigners and no one has any cash...

'and is likely to get worse, Why rub it in?' .... that's your quote not mine!

You really have no idea! You make the case that anyone that is over leveraged is some greedy property developer with multiple properties and negative gearing. Stop and think for a minute of every other potential circumstance for people to be in a situation that they could be extremely worried about the future if house prices decline. FHBs that bought at the peak with their meager deposit, people returning to NZ from overseas that have worked their buts off and bought for their families etc etc. Your constant schadenfreude makes you look mean spirited and frankly someone I definitely wouldn’t want to know. Constantly negative. No one wonder you spend so much time trolling on property comments sections. You literally have no life!
By the way, I’m not female, I’m hugely in positive equity on my family home and don’t have any investment properties. I just have had enough of your constant schadenfreude.

over-leveraged is over-leveraged Erewhon.... It just means borrowed too much.....it is that simple. Prices went up, then they stopped, now they are falling. There will be lots of people who didn't over-leverage who will be looking at the future will glee....having been locked out for far too long, by silly leverage! I have a feeling that I'm wasting my time here so good luck.

It really is getting very tiresome Nic, all this 'Chicken Little' prattling on. I wasn't going to say anything but Erewhon put it so eloquently that I feel a need to back him up with two thumbs up. Enough already!

No big sales at Auction this week either. Top price 1.8. Start of the top down correction is under way.

Nic, interesting point. In light of the FBB, others suggested a pending rush to get in. This might suggest yet another cause for buyers holding off.

Why buy a house in Auckland when you can get one for nothing!
https://www.stuff.co.nz/auckland/local-news/western-leader/106974415/wom...

Does not bode well for the flood of listings coming through the pipeline with a foreign buyers ban imminent.

realestate.co.nz already has around 12000 residential listing, this is about where it was the middle of last summer.

I reckon there will be over 14000 in a few months time

https://www.realestate.co.nz/3398073

580k for 267 sqm of land; $2172 per sqm ; Houses themselves are depreciating assets, its land value that grows and for 580k you are getting ripped off getting 267sqm in Papakura

Well, if you can just arrange for a whole bunch of good employers to move to the middle of the King country we can all divvy up a 20ha farm and live in quarter acre paradise.. and still have decent jobs.

You make it all sound so Simple Simon!

Agreed. Top end that is zoned single dwelling is about to nailed without overseas cash propping them up....JK and Hoskings have already voted.

...I can imagine some very worried trust executors, in the "leafy suburbs" of Auckland....if those 2 proponents of the "great Auckland property dream", JK and his one time side kick and media puppet, Hosking have either sold up or subdivided, they would know the writing is on the wall, for that once valued at $7.5 mil 5 bdm villa on the Northern Slopes ....... what intrigues me is what will all these smug, arrogant baby boomers do now, when their "property portfolio" starts going in the "other" direction .....

For a young professionals looking to settle down. Melbourne, Brisbane (and in some cases Sydney) are much better proposition than Auckland.
Had a couple of new IT people at my work moving over from Auckland. One of them sold their crappy 3br Grey Lynn, now bought a 4br renovated character home in New Farm, Brisbane. Walking distance to James Street market (incredibly trendy), 10 mins walk to cafes by the river and a new VW Golf Gti.

Real picture will be out by November.

Wait and watch.

If the non resident buyers are only 3% than have doubts if it will make any difference but Yes if national lied and manipulated the data than one really has to wait and watch.

Think on it a bit more Richard

One foreign buyer injects $3,000,000 cash into the Auckland market. That money then gets spent on the next Auckland house $1,000,000, a purchase in the Hawkes Bay and a flat in Wellington. Plus all the subsequent transactions that the sellers of Hawkes bay, Auckland ($1,000,000) and Wellington property then are able to make. The impact is enormous when you actually think about it.

Have you ever watched dominoes falling in sequence? that's what the foreign buyer facilitated. Without them it's just debt that someone has to want to take on and be able to access.

As you say, a price change, up or down, causes an avalanche effect which may be large or small. I hadn't thought about the up one when it comes to housing, only in terms of a short squeeze or blow off top in commodity or share markets. Thanks for that.

Prices are set at the margins, so a single new overseas buyer in a region like Golden Bay can reset the price for all properties there. That is pretty much what happened in the millenium bug scare when a very few Americans paid looney prices for a very small number of properties there. The whole region went from very cheap to very expensive almost overnight. Imagine if your neighbours house sold for $4million, that would reset your expectations.

Hi Roger

I've sold a few houses over the years and remember during the aftermath of the Brexit vote no one knew where the prices should be without the European buyer wanting to live with us in the UK. Now in the UK the transactions are usually linked and its not uncommon for 5 or 6 houses in a chain to contract at once and then all complete later on. Imagine 6 sales where people have lined up purchases on what they have been offered, they know their equity to transfer to a purchase and the mortgages are all agreed and then the buyer at the bottom, they guy who has the most to lose because he is not already a home owner decides he's uncomfortable and reduces his offer on the house at the bottom of the chain of transactions by £500,000. What happens next? Either, everyone agrees to swallow the loss up the chain - or what often happens, the chain of transactions collapses. That's where we are now, very few people know what anything is really worth without the cash injection to start it all off and the banks are all lowering mortgage rates to tempt people into filling the abyss left by the foreign buyer.

Indeed Roger;

“A term that's circulating more often is the "marginal" buyer. These are the outliers who pay huge premiums over the "consensus price" that experienced agents would come up with based on previous sales and micromarket factors. Even though they make up only a small subset of buyers, they determine market value.”

I see the marginal buyer as something of a false and temporary price setting mechanism which can encourage or enable a fair degree of misplaced optimism in subsequent transactions – what happens when the marginal buyer “disappears” – who then supports this somewhat artificial price structure.

Yes – as others have alluded – listings are starting to take a meaningful jump.

I really do believe that with some of the previous demand side drivers either being weakened or removed completely market dynamics may take a somewhat different shift over the next few months.

An increase in willing sellers – a decrease in willing and able buyers – with price being the primary variable.

Probably nothing overly dramatic will happen – not many willingly drop 10’s if not 100’s of thousands if they can avoid it – and unless a swan of dark coloured hues should paddle by I would imagine most sellers will not participate in such a loss unless absolutely necessary.

However – it may be that the landscape has changed – will be interesting to see by just how much.

Hi Custard

It's likely to be the gambling 8% of the market who carry 40% of the nations mortgage debt that will set the bar.. Are they all honourable thieves? I think that's unlikely and reckon a majority willnrun for cover like most gamblers do?

Kenny Rogers singing in the background!

Have you worked (or are working) in the banking/financial sector there Nic?

I'm just an independent like you....

Given the comments by others regarding marginal sellers and buyers I decided to research the properties listed as sold at auction on the first page of the results that achieved prices in excess of $1m.
The facts are of interest in the context of "marginal price setting".
73 Eban Ave, CV 1.080m Sold 1.073m last sold 1994 235k
19 Bob Charles Dr, CV 1.300m Sold 1.350m last sold Nov 2017 1.600m
3/82 Castor Bay CV 1.615m Sold 2.035m last sold 2013 1.300m
24 ewen Alison CV 2.050m Sold 2.250m last sold April 2018 2.450m
45 Green Hithe CV 940k Sold 1.125m No Sale data
136 Foley Quarry Road CV 1.535m Sold 1.351m last sold 2002 600k
9 Divich Avenue CV 1.100m Sold 1.080m last sold 2015 920k

With regards to the "marginal pricing" effect Castor Bay was built in 2014 and last sold in 2013 so was a new build on a subdivided site.Both Foley and Divich sold under cv 2017 but both sold well above CV's set in the year prior to their previous sales.
The analysis is basic and random but may be of interest (pardon the pun).

I'd like to focus on 19 Bob Charles Drive. It proves my point that the market is collapsing. The other sales are clearly outliers /sarc

*cough* Ewen Alison..*cough*

LOL it's clear as mud. The market is tanking, heading towards 2002 levels. So sorry to give you the bad news.