It appears that properties are now slower to sell in Auckland's central suburbs such as Ponsonby, Grey Lynn, Remuera, Glendowie and St Heliers

It appears that properties are now slower to sell in Auckland's central suburbs such as Ponsonby, Grey Lynn, Remuera, Glendowie and St Heliers

Buyers had plenty of choice at Barfoot & Thompson's auctions last week with the agency marketing 161 properties for sale by auction between 11 and 17 March.

Of those, 46 (29%) had sold by the close of business the day after the auction, with the rest mostly passed in for sale by negotiation, which generally also makes them available for offers from conditional buyers.

Of the major auctions where at least 10 properties were offered, the highest sales rate of 44% was for properties auctioned on-site, followed by the Shortland Street auction on March 12 and 15, which both had sales rates of 36% (see table below).

The Shortland St auction on March 12 offered a mix of properties from central suburbs such as Epsom and Mt Roskill and west Auckland suburbs such as Glen Eden and Henderson, while the auction on March 15 mostly offered properties in west Auckland.

The lowest sales rate among the major auctions was the Shortland St auction on March 13, where 35 properties were offered, most of them in upmarket, central Auckland suburbs such as Remuera, St Heliers, Meadowbank, Epsom, Ponsonby, Mt Eden and Grey Lynn, with sales achieved on six of them, giving a sales clearance rate of just 17%.

It appears that the properties in Auckland's leafy central suburbs are now the slowest to sell, a complete turnaround from the situation over the last few years when those suburbs usually had some of the highest sales rates.

Details of individual properties offered and the results achieved are available on our Residential Auction Results page.

Barfoot & Thompson Auction Results 11-17 March 2019
Date Venue Sold Not Sold Total % Sold
11-17 March On-site 7 9 16 44%
12 March Manukau 6 22 28 21%
12 March Shortland St, CBD. 4 7 11 36%
13 March Shortland St, CBD. 6 29 35 17%
13 March Pukekohe 2 9 11 18%
14 March North Shore 9 25 34 26%
14 March Kerikeri 2 0 2 100%
14 March Shortland St, CBD. 4 5 9 44%
14 March Mt Roskill 2 2 4 50%
15 March Shortland St, CBD. 4 7 11 36%
Total All venues 46 115 161 29%

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73 Comments

12
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...the higher they go, the bigger they fall

The article doesn't say that prices are falling, it says that there are very few sales in the leafy suburbs. This means that the top end buyers are not prepared to pay the asking price and that the sellers are not prepared to discount their asking prices = low number of sales.

14
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Yvil's getting nervous. A slump in "Leafy Suburbs" sales was predicted by many here (including me). Note the steadily increasing Auckland listings? 14,384!

What comes next? FALLING PRICES.

CoreLogic 94.78% of 2017 CV @ 10/3/19 (95.22% on 3/3/19)

Where do you get this statistics mate?

They are stated in my ANZ Home Loan facility on their iPhone App. They state the property they hold a mortgage over and the CoreLogic estimated property value. Just checked and they updated it again to 96.5% of 2017 CV as at 17/3/19. I figure it’s a reasonable benchmark to look at. I post the value regularly whether it’s up or down. It’s a counterpoint to the cherry pickers.

They aren't willing to set a low reserve at Auction.. its only after the auction fails that they stick a price on it and hope to reel someone in.. Then a few weeks later the asking price gets lowered.

eg: 257A Main Highway Ellerslie, failed to sell at Auction on 7th Feb, so they tried again with an auction on 28th Feb, Whoops, that missed too. Asking price of $1.65m, knocked down to $1.595m, and just dropped it again to $1.555m.

257B sold, but 257C also still on the market. Not sure if same seller or not, but same agent.

I used to live around the corner at Eaglehurst Street, that's a very noisy and busy street 24x7

We were practically neighbours then. I was in Micheals Ave.
I used to have to cross from Michaels Ave to Eaglehurst every morning on my way to work. Getting out of Michaels Ave and across all four lanes requires a healthy amount of throttle as you have limited sight lines due to the contour of the road.

That little children park in Michael Ave used to be our playground!

I remember a few times buying things on clearance at the warehouse only to find multiple clearance pricing stickers under the top one. It didn’t sell for $4.99 so they lowered the price to $2.99, it didn’t sell so the lowered to $.99 and it was sold. Be patient Yvil, that’s how markets work.

C H, "lowest sales rate" refers to the numbers of sales, not how much a house sells for. Very low sales in the leafy suburbs simply means that buyers are not willing to pay the asking price and sellers are not prepared to discount the asking price = very few sales, not the same as falling values

Yvil .........your words ...." simply means that buyers are not willing to pay the asking price" ....I will say my mantra again ...a house is only worth the amount that someone is prepared to pay for it ...no amount of "wishful thinking"on your part and those of your ilk are going to change that.

Yvil's point is that you cannot claim house prices are falling when the article is about low sales numbers.

E.g. Period 1 10 houses sold for $100k, period 2 no houses sold. Are you saying house prices fell in period 2?

You are both right you are just talking about different types of valuation.

What valuation is CH talking about? The article was talking about sales volumes not prices.

CH, I didn't any questions at all.

Yvil ...have just edited my post and taken out the "...your own question" ...however my point still stands.

11
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We're somewhere between denial and fear at the moment on the bubble cycle, that's why auction clearance rates are so low, sellers still grasping for an alternative reality:
https://transportgeography.org/wp-content/uploads/stages_bubble.png

That picture is just the Nasdaq crash... It doesn't apply so broadly. You can already see it makes no sense as the Auckland housing market has been flat for years, which does not fit with how bubble theory interprets psychology. Auckland has stable prices because market forces are balanced. Houses are stretched on an affordability basis but total supply is constrained below equilibrium. Low sales would be the logical extrapolation. Hopefully prices trim down but ive been waiting for that to happen now since late 2016.

If market forces were balanced we wouldn't see increasing stock and falling sales. If it was a lack of supply it makes no sense there are so many properties that aren't selling.

What people are willing to pay for a property is now lower than what people want to sell the property for, hence low sales. The only question left is who blinks first.

Market forces on price are balanced, that is certain because prices are stable. Lack of supply is not so simple as you seem to think. For example there is almost no supply at prices that people want to pay, supply and demand is curve and not a single point. The greater point im making however is that fundamentally there is an established short fall of houses. This leads sellers to feel comfortable waiting as buyers are in effect forced to pay more to access the supply that is been withheld from clearing prices.
These two forces, difficulty to pay and unwillingness to discount are currently balanced with the the result been slow sales.

If prices are stable, how do explain the Auckland HPI being down YoY? And I'm not talking about an isolated month here and there, I'm talking about 6 consecutive months.

Property market bubbles do take longer to play out that stock market bubbles for sure, but just because it’s been flat or trending down slightly doesn’t mean it won’t play out like that classic graph. It certainly has on the way up. We’re certainly past the peak.
Bubbles are fascinating, and can be taken advantage of but also difficult to time. I think there’s another mini-bubble playing out with Canadian Cannabis stocks at the moment (and no doubt other places when legislation passes). Stocks are moving on news and ignoring fundamentals - psychology rather than financials.

That is not a classic graph, it is literally the Nasdaq.

Splitting hairs. Very similar to most bubble dynamics including crypto bubble, and for that matter every bubble from tulips to Railway Mania to 1929 to 1980s Japan. Haven’t looked at Ireland property bubble graph but I’m sure it’s similar.

12
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Perhaps foreign buyers were really the one's who could afford these leafy areas. Now they're gone everyone left in the auction room is thinking i'm not paying that much.

Vendors may need to adjust their expectations.

12
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No more foreign buyers or credit junkies now to buy in the leafy suburbs at inflated prices only locals with their affordability levels.

Most sellers list their properties because they have a reason to sell, so eventually they will have to meet the market which is probably 20% less than what they are asking as was our case.

So what suburbs in Auckland, Sydney or Melbourne are being hit by Sub-Prime lending?

Any comment on prices and rv?

Macquarie chief economist Ric Deverell said that when house prices start falling "there is no doubt people start to think about selling".

"These are big liquid markets so it's not a case of not being able to sell, it's at what price."

However he said that much of the evidence in both real estate and equities markets points to people holding back from selling when prices fall.

... but only if they believe they can get a better price within the timeframe they have to sell.

If you are 30 and plan on living in the house for the next 30 years, of course you can hold. If you are a retiree who has the majority of their wealth tied in the family home (which is required in near future to fund your retirement), the equation looks very different.

... and we have a large slice of the population approaching retirement age who just happen to have a high proportion of wealth tied up in housing.

yes and they purchased a lot lower so can still make decent $$$ even if they sell 10-20% lower then here, not forced sellers , still making good $

"These are big liquid markets so it's not a case of not being able to sell, it's at what price."

A big liquid market is a market where you can sell at a short time frame at the current market price. The biggest liquid market is the foreign exchange market.

If a property vendor has to cut their price to sell in a short time frame, that is a illiquid market - it is not a liquid market .

Watch out below!

All going to plan. Some consolation after suffering months and months of bull ppty drivel posted here.

It's the low quality investment properties which is the worst affected imo.

Good to have reality in the market place.

The problem still remains not enough houses for all the immigration. Did anyone see the immigration rate zoom back up to 59k in last year?

There are plenty of houses sitting empty because people believe house prices will always go up. Just take a drive around and you'll see tonnes of them. We don't have a housing issue, we have an empty housing issue.

As Auckland spreads out the more central housing becomes less valuable. Job growth that used to be as default within the central urban mass is instead planned in nodal developments of Pukekohe/Paerata and Silverdale. Future demand does not look great for the central suburbs.

From June 2016.

This article will have a different meaning and a different level of importance for some people, given the market environment changes, market price changes and market sentiment changes since then.

If a large proportion of these mortgages are to be reset after 5 years from IO to P&I, then that is June 2021 ...

https://www.interest.co.nz/property/82308/new-official-reserve-bank-figu...

FYI, the REINZ median sales price at June 2016 for Auckland was 821,000 vs the most recent median sales price of 850,000.

People are no longer willing to pay for the extra value in grammar Zone (overrated school IMO), they'd rather spend the difference in the house price and put their children in private education. I know a few who adopted this strategy and it paid off for their kids

Well considering that many kids going to those kinds of schools turn into spoiled brats, I'd rather have my kids at a middle of the range public school.

https://i.redd.it/n0kntgzobxm21.jpg

I wonder if thats in the St Kents promotional brochure.

ACG College was in that subliminal message!

That photo was in the Herald I think I had a close look at that because my friends kids go to St Kents and I wanted to hassle him about the photo and St Kents can only win rugby by poaching other players. His kids is in it, funny.

The child in photo is quite naughty but the other child is really nice, it depends on the kids as well, but if you have an attitude like some on here, then private schools will only bring out the worst. I think that's why in the ABs no matter how successful players are, they are brought up in teams where the collective is bigger then the individual. So most are down to earth, and love being like normal kiwis. Rugby in general is great, it is a very down to earth environment, that is really inclusive.

Shock as Aussie apartment values tumble - Warning: Granny Herald link.

Here in Brisbane, the value of 1 br and small 2 br apartments are declining, there are just so many on the market. But for the large 2br and 3br+ apartments, prices are holding very well, most have sold sign on them especially in the sought after areas near river or CBD.

Houses are way overvalued in those inner leafy suburbs, and will come down. It has been a big part of the speculative bubble in suburbs such as Ponsonby and Grey Lynn. It’s actually shocking to drive around now and see the bubble values on some of those places. Sure, it’s the land value, but it’s well over 30% overvalued.

Today we have a weird market where the price and total supply of land are both at record high levels.

About $4'000/m2 for land in Ponsonby.

Driving down Manukau Rd on the way to the airport after Xmas We stopped for lunch and I was surprised at how dilapidated the houses I could see were. You'd think that if they were worth so many millions they would attract a coat of paint.

Not if you are a landlord just farming people till the day you rip the house down and build a number of units on the site.

Yep, that's the impression I get when I visit Auckland these days too. Wandered around Onehunga and One Tree Hill recently and most properties looked shabby with both the house and yard in need of maintenance / tidy up - and no doubt many were million dollar+ properties.

Yes Auckland has changed so much in the last 20 years. Not many people seem to take pride in their property any more.

Its a shame

... just wondering how relevant the auctions action is , compared to property sales from non-auction methods ... 'cos I don't know anyone who'd buy a house by an auction nor buy by a deadline sale ...

Us old fashioned coots believe in negotiating face-to-face with the vendor , or with their agent ...

Well, as an indicator, I just looked at the last 20 listings added to one of my lists:
15 Auctions
2 Tenders
1 deadline sale.
2 priced

Of course with ~30% auction clearance rates many will end up priced or by negotiation in about a months time. No idea what the ratio is of how they finally actually get sold.

Grey Lynn is by far the best place to live in Auckland, it'lll be 'if i dont get my price i'm not selling.' As simple as that.

People there won’t have to sell if there’s a 30%+ decline, unless of course they are highly leveraged and need to, and have really stretched themselves to buy there. If it’s a home with a good deal of equity, rather than a speculative investment, why sell?

Some potential scenarios for your consideration:

1) If the house owners have borrowed against the rise in house price to buy a portfolio of investment properties for their retirement, using equity release and deposit recycling financing techniques. Especially if they kept maximising their borrowing to maximum allowable LVR's (of 70% until August 2016) and borrowing on interest only terms, and buying properties in Auckland at peak prices. Some of these portfolios could be cashflow negative on interest only, especially if the purchase was 100% financed by debt. These property owners going from IO to P&I could face significant increases in debt payments.

2) some of the above category will meet the cashflow shortfalls from their household incomes. This will enable them to maintain their debt service payments, even if the investment property portfolio is cashflow negative. If the combined household income falls for some reason - such as one income earner from the household experiencing a decreased wage or a loss of employment if there is a recession, or an sudden and unexpected death in the family, or a relationship breakup, etc.

I recall going on an introductory visit to one of the property mentor programmes in July 2016 to investigate what these property mentors were teaching potential students. Some of the other potential students were house owners with equity where they were encouraged to borrow against their home and use the proceeds to purchase investment property.

A lot of parents have put their own homes up to guarantee the mortgages of their kids. In the event their kids get divorced or otherwise need to sell, and they are in negative equity, the banks will foreclose on the parents house to get the rest of the money. The old "Bank of Mum and Dad" doesnt look so safe now does it?

Hi Grey Lynn Gangster.

Indeed, Grey Lynn is a great suburb to live - nice and leafy. And walkable to both Ponsonby's "strip" and the CBD says it all.

There are few properties currently listed in Grey Lynn and Ponsonby at present......

The same applies to highly sought-after Freemans Bay - where most places for sale are apartments and not the preferred stand-alone, freehold houses (the latter being as scarce as rocking horse s--t).

People with houses in those areas avoid selling - because it's too damned difficult/expensive to buy back in a few years down the track. Most people in those suburbs are pretty savvy - so don't expect oodles of cheap houses to come on the market there.

TTP

TTP, sure, “cheap” will be relative to the suburb. 30% down from $2m is still expensive for most people. The gentrification in those suburbs will not go away. There will be cheap houses again in many areas though as prices decline, especially if we follow Australia’s level of decline, which seems very likely. The the return of the under $500k average house.

There are 67 properties for sale in Grey Lynn on Trademe right now. According to stats NZ there are 1338 dwellings in the area so 5% for sale (ponsonby is at 1.15%), hardly a small number I would of thought.
I know a few RE agents in this area, times are tough in the 1m+ zone.

Hi TTP too true, the GFC happened and i remember the rest of Auckland taking a hit, while my neighbours just sat it out. Too many good reasons to live in this area, and you are right Freemans Bay is as good or better as my home town.

Wow a fairly bearish Tony Alexander, never thought I would see it:

https://m.oneroof.co.nz/news/36112?ref=nzhhome

Grey Lynn.... please. It’s dull, littered with cars and overpriced af.

Not a patch on Paddington in Sydney.

You can live in Grey Lynn without a car, its not a mish mash of crap leaky houses, it's full of artists, musicians, and urban professionals with a mix of students to keep it creative and interesting. It doesn't have a line of suburbs behind it therefore traffic is always sweet if you need to use a car. It has the best restaurants in Auckland at its disposal and the best parks and soon to be the home of test cricket. You can shove Paddington up your arse, too many flys and cockroaches for me. Grey Lynn til i die. And suck it the prices will not fall for all the above reasons.

Well spoken, Grey Lynn Gangster. You're right on the money!

As much as I'd like to become a neighbour of yours, I'm realistic enough to know there's zero chance of that happening - because Grey Lynn prices are destined to remain rock solid.

Enjoy your home! It's a fantastic investment, offering you a great lifestyle. (The rest of us can only remain envious.)

TTP

Agent TTP ah-hmmm "It appears that properties are now slower to sell in Auckland's central suburbs such as Ponsonby, Grey Lynn, Remuera, Glendowie and St Heliers"

Are Grey Lynn prices are destined to remain rock solid? Unlikely.

GLG, you mean Ponsonby, Grey Lynn, Kingsland etc *used to be* full of artists and musicisans, before it got very gentrified. There might be some (older, wealthier ones) but artistic folks tend to gravitate to suburbs that are cheap not yet gentrified, but then get that way because it becomes known as a creative area. Difficult to find cheap suburbs in Auckland at the moment, but plenty are not gentrified yet. Artists and musicians tend to live further west these days I think you'll find.

Musicians, artists and students.

The only Musicians able to afford it are American musicians, as the ones on their bones of their arse are no where near there, as for the artists these guys will be dead once their paintings are of value to afford Grey Lynn, and the students only if they are related to John Key and daddy is helping them out. Grey Lynn is full of Bankers and Business people now. Nothing wrong with that, but the eclecticism has well and truly gone. The only guys there now will be comparing the Pinot with their Merlot. Not to mention which kids goes to the best schools.

If you want to have a cultural place you have to move from Auckland. Even places like Waiheke has lost its Charm. Still some real NZ places around but Grey Lynn isn't one of them.

I like Grey Lynn though, my friends are there, they certainly are not artistic. Maybe creative with numbers.

Bottom end of the market selling well 69% clearance rate at Shortland street on the 19th, where the stock was mostly inner west auckland - Blockhouse bay, Avondale etc.
But Yesterdays Eastern Bays/Remuera auctions quite the contrast.. 26 lots went up during the day, 4 sales so far.. and another 7 not declared yet.

Will be interesting to see the prices they fetched.