At the major auctions the sales rates ranged from 18% to 44%

At the major auctions the sales rates ranged from 18% to 44%

Barfoot & Thompson achieved sales on a third of the properties at the agency's latest auctions, with more than half of them selling for more than their council rating valuations.

The agency marketed 135 properties for sale by auction last week, achieving sales on 44 of them (33%).

Twenty of those properties sold for more than their rating valuations, 17 sold for less, and either the selling prices or valuations were not available for the remainder.

At the major auctions where at least 10 properties were offered, the sales rates ranged from 18% at the Shortland St auction on 21 September where the properties offered were mainly from west Auckland, to 44% at the Shortland St auction on 19 September, where most of the properties offered were from a mix of central Auckland suburbs such as Glen Innes, Mt Roskill, Remuera, Epsom and Onehunga.

At the Manukau auction, where most of the properties offered where from the southern and eastern suburbs that previously fell within the former Manukau City boundaries, the sales rate was 35% and at the North Shore auction it was 19%.

Details of all the properties offered and the selling prices and rating valuations of most of those that sold are available on our Residential Auction Results page.

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Barfoot & Thompson Auction Results 17-23 September 2018
Date Venue Sold Not Sold Total % Sold
17-23 September On site 2 3 5 40%
18 September Manukau 11 20 31 35%
18 September  B&T Shortland St 3 9 12 25%
19 September Whangarei 2 1 3 67%
19 September B&T Shortland St 12 15 27 44%
19 September Warkworth 0 1 1 0
19 September Pukekohe 1 4 5 20%
20 September North Shore 6 25 31 19%
20 September B&T Shortland St 5 4 9 56%
21 September B&T Shortland St 2 9 11 18%
Total All venues 44 91 135 33%

 

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Who chooses to go to Auction? Only those people who know that there is likely to be competition for premium 'product' they are selling. Self selecting group makes the results less pertinent to overall market.

13
up

True, and yet the clearance rates are still abysmally low. Says a lot about how sick the wider market really is.

And it's nearly mid spring. Should be boom time

11
up

Maybe. Or is it just naïve and gullible people who are sucked in by the REA spin.

North Shore an obvious stand-out – and East Coast Bays a noted area of interest for foreign buyers – or perhaps that should be "previous" interest.

Only one auction result so yes – probably can’t make too much out of it.

However, an area to watch for any possible impact of the FBB – and any impact would only be revealed over a 3 to 6 month period I would have thought.

I wonder what “damage” the marginal buyer has done.

Agree the FBB will take 3-6 months to feel any impact, and whether that legislation is actually effective. Interest rates still down, and Council constraint on development still significant. Could still go either way I guess, especially if Immigration is not slowed further, and bank rates stay at their printing press driven lows. Im personally still bearish.

Grabs popcorn and continues to watch.

Toothypointy,your erudite input?

Oscillations.

I told my Dad over breakfast this morning that when I visited The Shore, I thought it had quite a few suburbs that exemplify the Million Dollar Dog Box Syndrome. Sure the coastline strip is great, but inland not so much.

Dad said something about Top Dogs always getting the tasty treat, or some such thing, so I turned up the volume on my bluetooth headset and finished my 5-star health rated nutrigrain (without strawberries).

SOTTP

Welcome Son!

Pragmatist

Is it time to call bullshit on the Australasian housing markets?

Lets just say that the pantry has plenty of popcorn, and i'm bookmarking a few Australian property bulls youtube sites.. Glad my friends over there have been in their place a while, and both are on 6 figure incomes, so they'll probably be okay..

Actually, his job is very construction industry related, and hers is in luxury goods.. so might not be so good for either of them.

He's visiting his bank wondering why he received a letter of notice (divorce )

Auction clearance rates in Auckland have risen markedly since May/June this year. Over this period, there have been numerous auctions that have recorded clearance rates above 40% (and even 50%). For instance, last Saturday's headline reads:

"Sales rate goes up past 50% at Bayleys' and Eves' latest house auctions" [Gregg Ninness, 22nd September]

Auction clearance rates above 50% were virtually unheard of through January to April this year.

It's a laugh watching the DGM go into hiding each time a higher clearance rate is reported by Greg. The DGM run for cover en masse..... soon becoming conspicuous by their absence.

In any case, the DGM are a shrinking group - their demise being readily apparent these days.

TTP

4 weeks to go before the introduction of FBB. Does anyone know if the ban relates to the date at which contracts are signed or the date that the sale completes?

"Agreements to purchase land entered into before 22 October 2018 will not be subject to the new rules."

https://srblaw.co.nz/ban-foreign-buyers-passed-law

Nic, what is your prediction regarding what will happen to property prices in the 2 months following the FBB?

Hi BLSH.

Initially very little. Sellers will be in shock and without the cash from foreigners the level of equity that people will have to trade up will just evaporate. There are very few second time movers because so many up to the eyeballs from buying the first home and the gap will be too great to breach for much of the middle market.

There is already 32,000 listings for sale, that will grow and grow as the mismatch continues and then the stories of people having to sell for a lot less if they want/need to get out will filter through our little communities and the newer stock will eventually start to come on and undercut the unsold / overpriced stuff.

You won't see it in 2 months... There will be two months of very low sales volumes then it will magnify month on month. I can see 20% off the top of the market within 12 months though and money getting much harder to borrow. It already is.

Westpac remain my 'black swan' event that could make things a whole lot worse. New Zealand is about to become the land of opportunity for those that are cashed up.

Yes, very little.

20% off Auckland upper quartile within 12 months?

Yep..

BLSH you'll like this story from my past life which I've just shared with Nzdan

'I once had some dealings with a Japanese businessman who had got himself in a bit of strife because his wife had found out that the 18 bedroom house he'd bought in the UK wasn't for her exclusive entertainment but was being shared by another female visitor that he liked to spend time with.

Mr X, we'll call him had bought this wonderful house for just over £10,000,000 in 2005 and had spent a cool £3,000,000 on doing it up a bit and getting the 18 acres of grounds manicured. Then in 2007 his wife busted him. In 2008 the house was on the market for £12,500,000. Not a whisper from the market. Price came down to £10,000,000 and in mid 2008 an offer of £8.5 million was turned down by Mr X. There was a bit of a mortgage on this place and my involvement began at the end of 2008. Anyway long and short of it is that in early 2010 with Mr X having lost control of the right to sell himself was relieved of the burden, the banks accepting a bid of £4.5 million (against their £5.25 million mortgage) to get shot of the whole thing. The moral of the story is that Mr X shouldn't have borrowed so much and probably shouldn't have got caught cheating on his wife.'

If only he’d bought in Auckland instead, and covered his tracks with the mistress.

Scary stories like this have clearly had quite an impact on your world view.

You learn a lot over the years BLSH, but I wouldn't see that as scary. The chap who bought it for £4.5 million in 2010 sold it in 2017 for £7.5 million.

Leverage can be a vengeful mistress in a downturn. Cash, equities and property have rarely moved in tandem. I actually think we'll see the end of the stock markets bull run first. That'll happen quickly... If you're in cash, there will be money made on that recovery whilst asset prices like housing and commercial tank under the debt burden of households. Then it's just timing the back in or seeing if there is something else that takes your fancy.

I see that while over half sold over CV many of the others were very close to CV.

Estimated selling price for the bay areas; Kohi, Mission, Freemans, St Heliers will still be 30-40% above CV. Just sayin'

Previously wasn't it 100% of the properties that were sold in Auckland selling at a premiums of at least 5% to July 2017 CV?

Now 38% (17/44) of properties selling are below CV ...

The weighted average here is -0.2% below CV - https://www.qv.co.nz/property-trends/residential-sales-prices
.
The data shows the following percentage premium (discount) to 2017 July CV for the following suburbs in Auckland:

1) Freeman's Bay +2.0%
2) Remuera -1.0%
3) Kohimarama +3.0%
4) Mission Bay +1.0%
5) St Heliers 0.0%
6) Orakei -1.0%

The area with the highest premium to CV was Paikiri +32% (note only 1 transaction)

The area with the highest discount to CV was Awhitu -15.0% (note only 1 transaction)

Reference to the 2017 CVs took a while to be reported in sales results. The earliest email I can find was for the February results. The sales levels were low in each Eastern Bays suburb so the prices/CV were all over the place. However, on a Bays wide basis, 63 properties sold for a total of $107 million and averaged 98% of the 2017 CV.

Individual suburbs were:
Glendowie 99% (12 sales)
St Heliers 107% (22 sales)
Kohimarama 92% (18 sales)
Mission Bay 92% (6 sales)
Orakei 93% (5 sales)

It would appear that prices in these areas are slightly higher / flat over the last six months, although I can see that numbers for Kohimamrama could support a more bullish conclusion. Waiting for Nictradamus Johnson’s 20% collapse with bated breath.

FWIW: Core Logic estimate my Kohimarama home at CV, where it was 101.28% as at 2/9/18

Ex Expat, on another thread you said your home had reverted back to the 2017 CV. What September spot valuation were you using then? Your fridge door must be looking awfully cluttered by now! Market forces say it's pointless reflating when it suits you to do so.

Retired Poppy, I’m entirely consistent. Look above where I say the current Core Logic value is at CV. I only noticed the Core Logic value in the last few months.

Edit: Just checked the app and a new estimate came out on 23/9. It’s now 99.1% of CV. That’s a drop of $21,000.

BTW: I only post these to present a consistent source of info. The comments here are all over the place with some very ordinary efforts like the one last week that didn’t bother to look at the S13 sales aspect. Meanwhile some like my niece are getting on with life buying a new build 2 bedbroom unit for $589,000. She bought small and close to work as the COL fuel price gouge is going to kill the properties with long commutes. They won’t vote COL n3xt time if they have a brain.

I don't have access to Corelogic, I assume you pay for that service? Anyway, according to Homes.co.nz my property is valued at 15% above CV and 20% above what i paid for it last year.

The NZPIF keep hounding me for an interview but I'm too good for them.

I have a standby home loan facility with ANZ. On their Go Money app there’s a tag next to the facility with the Core Logic estimated value of their security and date it applied. I don’t access any reports or sites that require payment. I find it interesting that ANZ is dynamically valuing its security.

I would have thought every bank should do this. What I find interesting is that they make this information accessible to the customer. I suppose it's a good lead in for extra lending during good times.

Ex Expat, exactly, its their security. For a small fee, your bank can discharge it.

"I find it interesting that ANZ is dynamically valuing its security."

That really is an interesting development by the largest lender in NZ.

Remember that this works both on the upside and on the downside.

This is equivalent to a mark to market valuation approach in financial markets, and it has led to forced sales by asset holders when the LVR becomes too high, and the equity cushion is too small. Property investors who are at high LVR's could be forced with loan top ups or pledge additional collateral to ensure banks are covered by the value of the collateral. This behaviour could magnify any downturn in prices.

I wonder if the other big banks are undertaking this valuation process.

But is ANZ dynamically valuing its security in its loan book for regulatory assessments?

Or is this just something they are showing to customers to gently encourage them to use the house as an ATM and top up the loan .. keep them in debt longer and enjoy the interest income.

So 67% haven't sold. Here are a couple of articles from the corresponding week last year.

Noteable takes. (Last years Clearance rate this corresponding week was 54%) Back in 2017 buyers were still happy to buy on the North Shore (clearance rate 71%). This year, not so much...19%.

Last September was Barfoots worst September for sales since 2009 with just 658 transactions. (It was election month), surely they'll be able to beat those volumes this Spring?

https://www.interest.co.nz/property/90004/barfoot-thompson-sold-54-prope...

https://www.interest.co.nz/property/90163/septembers-sales-barfoot-thomp...

Excellent YoY review...

About 20% more homes going to auction for this year as compared to last year. Even with many more homes going to auction, there were 28% fewer sales this year than last year. The trend isn't currently very favorable.

yeah simple maths suggests it's not a favourable outlook for property this spring

A brief aside. Just about to turn out the light in my hotel suite in San Diego. Great place and been having a right time of it. Could easily move here and think I found my spot in Coronado. However the sheer volume of homeless, vagrants and the plainly unhinged is impressive on a scale that simply overwhelms Auckland even when you consider that the San Diego population is less than that of our greater city. It’s a very sad indictment of modern society to see the way in which some people see fit to simply waste their lives away in the gutter. The only answer I can see is making such behaviour a criminal act with the ensuing punishment so heinous it actively deters it. Unfortunately you cannot save everyone. Some people are just what they are but that should not mean we have to tread lightly over them in fear of unleashing a violent outburst from them or their earnest yet woefully misguided enablers. Aucklanders should take a good look at the situation and before we lose all perspective by resorting to euphemisms such as rough sleepers start by calling them what they are - an urban blight which should not be tolerated, permitted or assisted to continue. Anyways, my rant over. Time for a well deserved nap.

It does sound like a nap might be overdue.

Ah, the beatings will continue until morale improves approach. Maybe that'll work this time, unlike every other time.

Didn't realise anyone could think this. It's so incredibly naive.

There is a portion of society that is basically incapable of looking after themselves. Helen Clark's government decided to 'set them free' so they're now all on the streets with 'the community looking after them'.

We need to bring back the institutions that look after people who can't look after themselves.

It's a very sad indictment of modern society to see the way in which those less fortunate are treated.

You can easily judge the character of a man by how he treats those who can do nothing for him - Forbes

What's scary is that you attitude towards others is possibly shared by a majority of people.

It is no measure of health to be well adjusted to a profoundly sick society - Krishnamurti

I think the real impact of the FBB is already being felt in Auckland due to the de-commoditising of houses.
At the height of speculation there is ample evidence of OSBs selling to each other with no intention of occupation or renting, This effectively changed the housing stock into a means to get money out of the buyers country into another currency and to speculate in the same way one would on gold or bitcoin or any other commodity. The effect on the local house market was to fix new upper prices on a street by street basis on the LBI scale. This activity decoupled housing from wages and affordability and linked it to the commodity bubble which was fuelled by cheap money domestically and overseas. Existing homeowners saw immediate and rapid equity growth and many either traded up or invested in the housing commodity market themselves. The bubble was further strengthened by a stable economy and a strong NZD. The slowdown in price growth stopped/slowed the inter OSB market and the domestic speculation was curtailed by bank lending and legislative changes.This has brought Auckland back,albeit slowly, to pricing housing on a wage/affordability basis. A number of Kiwi's have paper profits . some geared against some not, that were created by the housing market being confused with the commodity market. The downward pressure on house prices will continue from the economy, the FBB and legislative changes. This must result in the valuation basis on houses adjusting to a non commodity basis. Additionally, I think the LBI scale will reset prices on a street by street basis as evinced by the current price trend.
We live in interesting times!.

OSB = overseas Buyer
LBI = ?

Last Buyer In or LFI Last Fool In is a commodity market phrase for price setting.

In NZ, is the debate still how much are property prices expected to rise?

In Australia, the debate is now how much are they going to fall.

http://www.abc.net.au/news/2018-06-19/house-price-falls-from-if-to-how-m...