Latest auction data suggests sales are being achieved on one in three properties taken to auction with around two thirds selling for more than their rating valuation

Auction activity continued at a steady gait in the week ending November 23, according to auction activity monitored by interest.co.nz.

We monitored 310 auctions around the country over the seven days from 17-23 November, which was little changed from the 301 we monitored over the previous seven days.

The agencies we monitored and our methodology did not change during that time.

While there was a very slight, slight change in the number of properties taken to auction in each of the two weeks, the sales rate was unchanged.

In both weeks, the overall proportion of sales achieved was exactly the same at 35%.

That suggests a very steady auction market, although there was some movement in the proportion of properties that sold for more, or less than their rating valuation.

The proportion of sales where the price was above the property's rating valuation dropped from 74% in the week from 11-16 November to 63% in the week of 17-23 November.

However auction results provide only a partial view of the overall property market and the results from week to week can be affected by many factors, including changes in the mix of properties being offered.

We will have a better idea about how the market is tracking next week when we will have auction data for the full month of November and the major real estate agencies start reporting their full sales results for the month.

But the early data suggests the market is maintaining a steady momentum rather than a galloping pace.

Individual auction results are available on our Residential Auction Results page.

Investors interested in commercial property can find details of commercial sales on our Commercial Property Sales page.

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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41 Comments

35 Torrence St, Epsom is quite interesting. Sold for 1.317M last week yet last sold in 2015 for 1.330M. Leafy suburb, brick and tile. Looks quite nice:

https://www.barfoot.co.nz/765305

Noticed a few selling over RV, but for less than the previous sale...., growing number of speculators realising they overpaid

It certainly looks that way. For the example above an earlier owner paid 748k in 2012. Selling now for over 1.3M is a gain of $1,600 a week which is very high. That vendor in 2015 made a staggering $3,400 a week!

Last week's seller is fortunate to lose so little. They should perhaps have done some research in 2015 and quickly worked out that such a gain was not really reasonable nor typical for properties in this price bracket. Ignore the ZS principle at your peril!

They may have made a lot on a previous sale themselves so this loss may not be as painful as it seems.

Barfoot's 22/11 Auction 52 Marua Road Ellerslie repeats this trend.
Sold in April 2014 for $1.18m against a CV of 770k.
Sold in April 2017 for $1.9m against a CV of $ 1.725m
Sold in November 2018 for $1.190m against a CV of $1.725m

Seems pretty painful..

A 700k loss in 18 months should ring an alarm bell. It looks like the 2017 sale was for a 1012 m² property and the 2018 one for a 348 m². Subdivision so not a painful loss it would seem.

There looks to be a structure very close to the rear of the dwelling?

Curses - beaten by Zachary as I was having a closer look.

Slowly the price benchmark of properties been sold will drop and will have ripple effect.

If one property in an area goes for low price(for any reason) price in that adea will sfart falling. Same as what happened earlier during boom if one property went for high price - other properties in that area went for high as a result lifting the hkuse price.

Now will be opposite.

Give some time and prices will be atleast 20% to 30% below the high achieved earlier (Already down by 10% to 15%).

Speculators who bought at rediclues high price earlier will be hurt the most unless are able to hold for few years and wait for the next boom.

Trivial appreciation compared to 2015 market
Keep spruiking buddy

I think trivial appreciation should be a goal. I'd certainly be happy with trivial appreciation from here on and current FHBs would rather that than price declines I'm sure.

I'm wondering if the greed for big money was what caused the massive price rises. It could be a bit of a Chinese trait. I'm told #10 Chinese girls wont look twice at you unless you're worth at least 10M. Everyone chasing big money like house appreciation in excess of $1000 a week. Makes you long for the simpler days of the cultural revolution.

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Wow, is all i can say..

We are stuck with 1/3rd sold..

More houses being built and less selling, clear direction where prices will head towards...

Sorry to break it to you PP2F, heading up imo. Income from employment as well as rents are both rising which improves affordability and yields. There may be less selling at or via auction but more houses are selling in general

Yawn..

Hahaha good response

A third sold and not much more than half of those selling over RV, yet the article is upbeat. Why bother trying to sell at auction at this point? Not much different in terms of auction sales rates in Sydney and prices are plunging at record pace.

Cos the agency has the opportunity for force a sale. Aka get paid.

Greg concludes his offering today with, "...... the market is maintaining a steady momentum rather than a galloping pace."

And that's pretty much the case.

2017 and 2018 have been years of consolidation after the frenzied activity through 2014-16.

2019 may prove much the same though there are now reasons to believe the next few months may show increased buoyancy - with a modest lift in prices.

In any case, the soft-landing scenario is playing out - which makes for a benign form of adjustment.......

Steady as she goes.

TTP

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The captain of HMNZS Real Estate sails without fear through the eye of the storm and claims the forecast category 5 to be nothing more than a storm in a teacup.

Hi Independent_Observer,

"The captain of HMNZS Real Estate sails without fear through the eye of the storm......."

What storm?

TTP

The storm in full force across the Tasman.

3C/22 Fleet Street, Eden Terrace - City Sales Auction
- Passed in at $850,000
- Back on market $1,090,000
Ouch!

It indicates how much the market has changed. Gap of appox 25% between what the vendor expects and what the buyer/ market is ready to pay.

Foreign buyer Ban has had its effect and is continuing. What will happen after the new law that starts from 1st January is to be seen. Even if it is minimum but when you multiple with FBB will be huge.

Next year will be interesting.

FBB came into effect in October, what "new law" coming into effect 1st of Jan are you referring to? the relaxing of the LVR's?

"Anti-Money Laundering and Countering Financing of Terrorism Act and regulations ... drafted by July 2018. The legislation goes live on 1 January 2019."

"From 1 January 2019, all real estate agents across New Zealand will have new obligations under the Anti-Money Laundering and Counter Financing of Terrorism Act."

Perhaps this is being referred to.

I have left a couple of CHF 1'000 bills in my pants in the washing machine, is that what you mean?

D

Doesn't look that big or flash an apartment overall. Over a million for an apartment like that seems like awfully bad value for the buyer.

If it's not going to sell, put the price up! It may as well 'not sell' for $1,000,000 as $850k....

I see a growing trend in Hawkes Bay of homes now with an asking price ! Will have to track this to see if those asking prices get reduced.

Masterton is the complete opposite. Deadline sales and price by negotiations everywhere.

It's probably just me, but the focus on content about auction clearance rates is little more than clicks for advertising. The conversations around specific examples are becoming tedious.

My advice is don't read these auction results articles and their comments if you feel that way. How hard can that be?

Obviously I enjoy the focus on specific sales. It is 100% on topic. I'd like to see more offered up for analysis. I look for the sales that look like fodder for the crash theory and then pick it apart.

My advice is don't read these auction results articles and their comments if you feel that way. How hard can that be?

I don't. They're banal and largely meaningless in terms of the content and the comments. Usually don't waste more than a few mintues.

Obviously I enjoy the focus on specific sales. It is 100% on topic. I'd like to see more offered up for analysis. I look for the sales that look like fodder for the crash theory and then pick it apart.

Talking about indivudal sales of houses has little to do with theories about property bubbles and crashes. It's more representative of human behavior associated with bubbles.

I suspect you have an ulterior motive for your comment. It's like going on a rural article and complaining about people talking about cows and silage.

I don't read them... well only for a few minutes.. LOL

It's more representative of human behavior associated with bubbles.

That sounds quite interesting to read.

Thanks Zachary,

You objective approach is much appreciated.

TTP

"November sales down on October but prices steady, similar comparison to November 2017"

Headline for next week?

Last November was the worst sales volume in Auckland since 2010 with just 1925 sales.

It would have to be a diabolical month for sales for this November to be less than that, given the higher inventories, however with the poor clearance rates it is very possible.

Housing market is over.

Like it or not it is over for some yeads to come. Houze selling in a million are now gling for high 800s to early 900s and in furure do not be surprised if in january is high 700s to early 800s.

Wait and wagch.

No Way Josè....half of all akld suburbs now have a median price above 1m dollars and nearly 80 percent is above 800k. None below 500k! In 2013 20 percent of suburbs were less than 500k median

Like it or not the housing boom / bubble is over atleast for few years.

Having said that anyone who has invested in house at the right time and right price have and will make profit over number of year.

Don't bother Houseworks

Here's what I think's going on. Inventory values have shifted downwards, but because there hasn't been a downwards shift in buyer's access to credit the "averages sell prices" are still relatively stable. People with $1 million to spend are purchasing a house that could have potentially sold for $1.2 million 6 months prior.

In other words, buyers are tapped out and the vendors who have owned property for a decent period of time are accepting "perceived" discounts on current market value, but still winning on capital gain because a $1 mill capital gain now is awesome, who cares if you could've made $1.2 million if you sold 6 months ago.

But why wouldn't a buyer who has access to $1 million just buy an $800k property and be happy with it? I think there's been such a massive uplift in values over the past decade, there's an all in or nothing mentality from buyers. A bit of FOMO.

We could get to a stage where buyers and vendors start realizing how stupid the discounts are getting. "I can't believe you're getting a 4 bedroom house in a DGZ for less than $1 mill, what's going on?". But if you're a muppet and focus solely on the average sale price, you could assume that the market is still healthy when in fact 30% could have been shaved off the unrealised asset values.