Barfoot & Thompson's auction sales rate settles at just under 25%

Property

Most auctioned properties are being passed in and opened up to offers from conditional buyers

16th Apr 19, 10:08am by Greg Ninness

There was an increase in the number of residential properties Barfoot & Thompson auctioned last week but the sales rate was almost unchanged from the week before.

The agency marketed 172 residential properties for sale by auction last week (8-14 April), up from 154 the previous week, and achieved sales on 39 (23%) of them, almost unchanged from the 22% that were sold the previous week.

Most of the unsold properties were passed in for sale by negotiation, which would usually make them available for offers from conditional buyers, although a few were withdrawn from sale or had their auction date postponed.

Of the major auctions where at least 10 properties were offered, the highest sales rate was at the Manukau auction where properties from south Auckland and Manukau's eastern suburbs were offered and the sales rate was 29%, while the Shortland St auction on April 12 where most of the properties offered were from west Auckland, and the North Shore and on-site auctions, all had sales rates of 19%.

There were no sales at a couple of the smaller auctions, at Kerikeri and the Shortland St auction on April 9, where the properties offered were from central fringe and west Auckland suburbs.

So auction sales remain subdued and over the last couple of weeks Barfoot's overall auction sales rate appears to have settled at just under a quarter.

See the table below for the full results, while details of individual properties offered and the prices achieved are available on our Residential Auction Results page.

The comment stream on this story is now closed.

**Barfoot & Thompson Auction Results 8-14 April 2019**
Date	Venue	Sold	Not Sold	Total	% Sold
8-14 April	On-site	5	21	26	19%
9 April	Manukau	7	17	24	29%
9 April	Shortland St, CBD.	0	5	5	-
10 April	Mortgagee/Court	2	2	4	50%
10 April	Shortland St, CBD.	10	27	37	27%
10 April	Pukekohe	1	4	5	20%
11 April	North Shore	8	35	43	19%
11 April	Kerikeri	0	4	4	-
11 April	Shortland St, CBD.	3	5	8	38%
12 April	Shortland St, CBD.	3	13	16	19%
Total	All venues	39	133	172	23%

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45 Comments

by Chairman Moa | 16th Apr 19, 10:19am 1555366778

If the housing market was a dead cat, we have just passed the eighth bounce!

by jerry_NZ | 16th Apr 19, 10:25am 1555367151

So, what changed from the days of >80% clearance rate? Surely not overseas buyers absence...

by Joe Wilkes | 16th Apr 19, 9:20pm 1555406400

3% Nationally but actually when it was nearer 20% in the most affluent suburbs that goes a very long way to spreading the issue of over-leverage nationally once the central Aucklan premiums are passed on. 'Marginal' buyers were created across the nation.

by Retired-Poppy | 16th Apr 19, 10:27am 1555367259

Realestate.co.nz, listing for Auckland appears to have stabilized at around 14,311. Yet Waikato-Hamilton has kept rocketing up - 2841. Looks like the chill is spreading south. Like Auckland, Hamilton property valuations ride at an unsustainable altitude. Probably more so.

by Pragmatist | 16th Apr 19, 11:38am 1555371483

No, Auckland has peaked and listing numbers are declining fairly steadily.

https://imgur.com/a/gBggjjS

by Masher | 16th Apr 19, 11:57am 1555372653

Sell at a loss or be a mortgage prisoner? Tough choice.

by tothepoint - d… | 17th Apr 19, 8:03am 1555444994

Hi Masher,

The vast majority of house owners will stay put - and reap big rewards further down the track.

A house is a much-coveted asset. Once a house owner, people like to maintain that status.

TTP

by Retired-Poppy | 16th Apr 19, 12:20pm 1555374041

Maybe so. I had observed it's been around 14,300 for around five days now :)

by mfd | 16th Apr 19, 12:49pm 1555375755

How much of that is seasonal?

by Pragmatist | 16th Apr 19, 1:34pm 1555378452

No idea, I don't have data for previous years. I expect now that we are past the summer selling season a fall off would be normal, but would love to know if its falling faster or slower than the past. Doesn't really matter, next months RIENZ figures will answer the question, are listing dropping because they are selling, or frustrated vendors dropping the listings off the market.

by theglc | 16th Apr 19, 2:21pm 1555381267

Nice Graph!

I guess for those that cant sell during summer for what they want, no point sticking it out for winter. I notices a house close by that had been on the market for 6 months has gone off the market.

For those that are more motivated to sell will be digging in for a long cold winter.

by blobbles | 16th Apr 19, 10:30am 1555367405

At this rate, aren't auctions just a waste of time and money for the real estate agents and sellers? If there is less than a quarter being sold through this method, what is the point? I certainly wouldn't choose to sell this way...

Or is it sellers constantly"testing the market" to see if it has recovered yet?

by tothepoint - d… | 16th Apr 19, 11:36am 1555371409

Agree with you blobbles (like your pseudonym!)

We'll have to wait for the next market upswing for auctions to again be a relevant/rational means of selling houses. (As I've said here before, I don't anticipate the next upswing will eventuate before 2021 - at the earliest.)

TTP

by Retired-Poppy | 16th Apr 19, 12:23pm 1555374200

Agent TTP, have you considered that John Mauldin's analysis is more in depth than your own? https://www.interest.co.nz/opinion/99146/john-mauldin-mauldin-economics…

by cmat | 16th Apr 19, 1:27pm 1555378022

Don't question the validity of TTP's good-vibes analysis that clearly points to 2021 as an inflexion point.
Then following the well founded Ashley-Church-Theorem(1) of "past performance is a guarantee of future returns" we will see the market double again to 2026.

(1) The Ashley-Church-Theorem is based on a stroke of genius whereby you simply extrapolate your own interpretation of NZ property price trends over the past 30 years, at all times remaining totally myopic and ignorant to any global macro-economic factors that may unnecessarily cloud your simplistic intellectual prowess.

by Retired-Poppy | 16th Apr 19, 3:03pm 1555383824

cmat, well said :) A recovery in 2021 is as likely as a broomstick sprouting flowers.

by tothepoint - d… | 16th Apr 19, 5:26pm 1555392373

Unbridled negativism would be an unlikely formula for success in achieving one's house/home ownership ambitions.

TTP

by tothepoint - d… | 16th Apr 19, 6:54pm 1555397659

Hi Retired-Poppy,

Who, here, has said there will be a recovery in 2021?

TTP

by Nzdan | 17th Apr 19, 6:08am 1555438093

I think Houseworks might have maintained that position. “Market flat and then uptick in 2020/21”

by Retired-Poppy | 17th Apr 19, 8:16am 1555445778

You did. You even referred to it as an "upswing"in 2021.

You're either forgetting what you post or you're about to to a major backtrack. Which is it?

by tothepoint - d… | 17th Apr 19, 1:22pm 1555464133

Hi R-P,

Go read my post above (and others in previous threads).

I have consistently maintained that, "I don't anticipate the next upswing will eventuate before 2021 - at the earliest."

You have a bad habit of misquoting people - which is unethical.

TTP

by delboy | 16th Apr 19, 1:21pm 1555377680

Assuming upswing starts 2021 then 2024 they'll reach the levels of the 2016 high and in 2028 they'll be double what they are now.

by Voiceofreason | 16th Apr 19, 12:28pm 1555374513

Blobbles, yes auctions seem like a waste of time now, and quite unusual internationally to have auctions at all really. It's likely that it's the agents managing to talk those vendors into an auction, in order to force a quicker sale. The property will still likely sell even if not on auction day, and the prices are likely a lot lower than the vendor expects.

by tothepoint - d… | 16th Apr 19, 12:54pm 1555376077

Hi VoR

You write, "....... and the prices are likely a lot lower than the vendor expects."

With all due respect, you need to be careful about making statements that you can't substantiate.

TTP

by Retired-Poppy | 16th Apr 19, 1:23pm 1555377790

Agent TTP, why the veiled threats? When called out, what are you ever able to substantiate?

VOR is entirely correct. Auckland median prices are indeed falling (latest -2.7pa) and "prices are likely a lot lower than the vendor expects" In this buyers market, vendors are slowly discovering the need to be more realistic!

by Voiceofreason | 16th Apr 19, 7:58pm 1555401510

Of course people want their current CV, and increasingly that seems not to be happening in Auckland.

by nymad | 16th Apr 19, 2:27pm 1555381658

Is it unjustified to comment on an article written about a 23% auction clearance rate that vendors expectations appear to be above those of the buyers?

by JimmyJames | 16th Apr 19, 10:42am 1555368162

23%. These numbers are getting too low. We need a property spruikerman to save us.

by RickStrauss | 16th Apr 19, 11:45am 1555371924

50% at one auction! Things are picking up!

by Pragmatist | 16th Apr 19, 12:26pm 1555374381

It was really 100%, the other two were withdrawn.. but being mortgagee auctions they went 20 and 30% below RV. The two 0% auctions balance it out..

by Nzdan | 16th Apr 19, 12:41pm 1555375309

If you remove the Mortgagee Results (obviously an outlier) then the total clearance rate becomes 22%.

by Wrong John | 16th Apr 19, 11:56am 1555372593

Is this to be the housing winter of our discontent? Or will prices settle down nicely? I'm glad I'm not selling this year.

by Masher | 16th Apr 19, 1:20pm 1555377624

I'd rather be selling this year than next year, personally.

by Joe Wilkes | 16th Apr 19, 12:54pm 1555376084

We need far more Ashley Church and Tony Alexander. Put them on TV 24 hours a day and let's get this party started again.

by CourtJester | 16th Apr 19, 2:42pm 1555382537

Don't forget the 3% Chinese buyers who have gone missing, we'll need them too. Although we've been told that they had a minuscule effect on the market anyway. Now I'm just wondering, where will all the money come from?

by Joe Wilkes | 16th Apr 19, 7:51pm 1555401082

Never fear, Ashley is back at Oneroof, the Ministry of Housing Propaganda.
https://www.oneroof.co.nz/news/36198?ref=nzhhome
The Title of the Article - New Zealand risks becoming a nation of mortgage prisoners...and yet Ashley hasn't considered that if large numbers of people (30's 40's) choose not to be mortgage prisoners at the top of the cycle then there are plenty of sellers entering retirement with mortgages who may need them anyway, even at lower prices... That way the next generation of retirees don't face that risk themselves. There are good bits in this Oneroof report and it looks like the University of Otago have been getting some of their thinking from alternative sources.

by CourtJester | 17th Apr 19, 1:02pm 1555462920

Good point, not feeding this monster of a bubble is the best long-term investment for young people. In addition to that, looking at the latest median price stats (AKL down 4+ percent), not buying a year ago saved me more than my annual rent. And that's just the capital loss, it doesn't include mortgage interest and other costs associated with owning a home, not to mention the opportunity cost (I kept my deposit-money in term deposits).

by Joe Wilkes | 16th Apr 19, 1:23pm 1555377834

https://www.interest.co.nz/charts/real-estate/volumes-sold-reinz

A casual look at the Auckland sales volumes for March 2019 shows approximately 2/3 off the peak March volumes of 2015, despite the significant increase in the overall housing supply since then.
Couple of thoughts.
500,000 or so rooftops
22,000 sales in 2018
23,000 sales in 2017
29,000 sales in 2016
30,000 sales in 2015.
104,000 sales in the 4 years either side of the end of 2016 market top or in other words around 20% of the rooftops who, if they wanted to sell, would face the risk of a loss against purchase, without acounnting for the associated selling costs. Many of these won't have to sell, but the market of houses that real estate agents can actually sell at prices owners may want to consider, is already going to be about 20% smaller than it was in 2016. Best guess is that at current trends, the volume of sales will fall to between 15,000-17,000 sales this year so things are about to get pretty tight for RE commissions.

by CN | 17th Apr 19, 9:18am 1555449492

FYI, since 2001, the lowest volume of sales in Auckland was 16,190 as per REINZ numbers - that was in the 12 month period ending February 2009.

Remember that in February 2009, there was the Global Financial Crisis and the New Zealand economy was in a recession, & the unemployment rate was rising to over 6%, and there were a large increase in mortgagee sales.

Current economic conditions are GDP growth of 2.3%, & a relatively lower unemployment rate of 4.4% (having recently bottomed at 4.0%). In this economic environment, Auckland house prices are down from their peak of about 3-4%. What will happen if there is a recession in New Zealand, and there is an increase in mortgagee sales?

by taimaiakka0 | 16th Apr 19, 2:28pm 1555381735

Market is down but not overall because of interest rate. For the market to fall much - it has to across and not just selectively few.

By April we would have know and knows, the direction of the market and now by July will know how bad the correction is so far.

FHB should wait and watch if they do not want to burn their deposits or % of their deposit.

So wait and Watch.

by stuart786786 | 16th Apr 19, 5:08pm 1555391302

First step is fall in volumes followed by drop in price.

Volumes have dropped and prices have started to fall. Still much fall is yet to come. This is just the begening of the end.

by THE MAN 2 | 16th Apr 19, 7:54pm 1555401288

Reality is that investors are sitting on the sidelines in Auckland and first home buyers can not really afford them on Auckland
Personally don’t buy anything unless I get a 6 per cent return and upside
Returning to NZ tonight and possibly buying at auction on Thursday if I can buy at the right money

by mealsonmeals | 16th Apr 19, 6:57pm 1555397845

"Just under 25%". Fair comment.

But 0.18% before the headline would need to be rounded down to "Just above 20%" instead of up to "Just under 25%".

by rchadz | 17th Apr 19, 12:14pm 1555460077

So out of curiosity - does anyone else get updates from Homes.co.nz on the value of their house? It was all working great last year as their value of my house increased from GV by about 3.3%. However, since late last year I have continued to get notices that the value of my Auckland/Glenfield house has dropped in price. Now it is saying that I am 12.2% below GV (drop of 5% last month = ouch).
Is it that they have a really great crystal ball or are they seeing things that NZH nor anyone else can see? I know that in Glenfield last month only 1 house of 11 sold at auction, and that was 7.8% below GV. It's all a little unclear to me, and disconcerting.

by Ocelot | 17th Apr 19, 11:37pm 1555501070

If it's your home and you intend on staying, why does it matter?