Sales on a third of homes at the latest auctions

Property

Sales were achieved on a third of the properties at the latest auctions but prices were weaker in Auckland

10th May 19, 9:41am by Greg Ninness

A third of the homes found new owners at the auctions monitored by interest.co.nz in the first week of May.

The auctions of 237 residential properties around the country were monitored by interest.co.nz during the week of April 29 to May 5, with sales being achieved on 81 (34%) of them.

That includes those sold under the hammer and a few that were sold immediately prior to or after their auction.

The rest were mostly passed in for sale by negotiation, which would make them available to conditional buyers.

Where the selling price could be matched with the property's Rating Valuation (RV), 41% sold for more than their RV and 59% sold for less.

In the Auckland market, which dominates auction activity, the sales rate was slightly lower than the national average at just under a third (31%).

Prices also continue to be slightly softer in Auckland, with 37% of properties that sold selling for more than their RV and 63% selling for less.

Residential real estate sales usually pick up in May, after April which is usually a quieter month due to the school holidays and Anzac Day and Easter breaks, although it is too early to tell May is following that pattern this year.

It will also be interesting to see what, if any, effect this week's decision by the Reserve Bank to cut the OCR, which caused an immediate fall in mortgage interest rates, has on the market.

Details of individual properties offered at auction are available on our Residential Auction Results page.

Investors keen on commercial property should check out our Commercial Property Sales page.

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46 Comments

by Nzdan | 10th May 19, 9:53am 1557438828

What crash?

by Chairman Moa | 10th May 19, 10:08am 1557439717

Sydney Melbourne clearance rate is hoovering around 50% mark and the banks already declared as a crash. Auckland's 30% nah....

by tothepoint - d… | 10th May 19, 3:39pm 1557459553

Indeed, Nzdan.

In fact, people here have generally given up talking about a “crash”....... albeit a handful of diehards talk of a “slow crash”.

The latter, of course, is a meaningless expression and, thus, a pathetic argument.
It represents a corruption of the English language.

Enjoy the weekend!

TTP

by theglc | 10th May 19, 10:20am 1557440413

"In the Auckland market, which dominates auction activity, the sales rate was slightly lower than the national average at just under a third (31%). Prices also continue to be slightly softer in Auckland, with 37% of properties that sold selling for more than their RV and 63% selling for less."

Just another abysmal auction clearance for Auckland !!!

Less than a third selling and close on 2 thirds of those are selling at under RV.

OCR cut wont change anything because the stress testing levels remain unchanged and house prices in Akld are clearly on the decline with a considerable way to fall.

Buckle in and dont forget your crash helmet.....

by Pragmatist | 10th May 19, 10:27am 1557440867

Was still fairly low volume due to holidays, wait and see what the next few weeks brings.

by GenerationXY | 10th May 19, 11:47am 1557445633

These results are from after the Holidays.

by Pragmatist | 10th May 19, 11:53am 1557446019

Still affected by the holidays however, open homes the weekend/week before the auction are important.

by tothepoint - d… | 10th May 19, 4:38pm 1557463082

The OCR cut - combined with the recent CGT DENOUNCEMENT - will underpin the Auckland housing market. (And we can expect another OCR cut - perhaps before the end of the year??)

Other cities & towns may also see a firming in activity.

As always, the housing market is a moving feast - but the price trend over the long-term is upward.

Currently, the hardest hit group are those with bank term deposits - and, unfortunately, many of them are people of meagre means (such as pensioners).

TTP

by Retired-Poppy | 10th May 19, 5:25pm 1557465909

Vendors, there is no need to panic, this is just another "one off" aberration of many "one off" aberrations. Agent Tothepoint has guaranteed on various threads that another bull run is iminent and on the back of the recent OCR and CGT announcements, FHB's who let 2018/2019 pass by without committing, will certainly live to regret it. Going by his heated rhetoric, as soon as 2020.

Howz that for reassurance? Watch this space.....

by tothepoint - d… | 10th May 19, 7:53pm 1557474834

Hi R-P,

You write above: "Agent Tothepoint has guaranteed on various threads that another bull run is iminent and on the back of the recent OCR and CGT announcements..."

R-P - Can you show where I, or anybody else here, has "guaranteed" any such thing? It's quite possible that the OCR cut and CGT rejection might lead to a slight uplift in activity in the foreseeable future, as a number of experts (including RBNZ) have indicated. But a "bull run" is far-fetched and plain silly.

I've made my position clear on a number of threads over the past few months. I don't believe there will be any significant upswing in housing market activity/prices until 2021 - at the very earliest.

If there is any change in this position, I will make that clear here.

TTP

by Retired-Poppy | 10th May 19, 8:01pm 1557475305

Agent TTP, now your back tracking and calling it "a slight uplift in activity in the foreseeable future" by tothepoint | 4th May 19, 9:32pm "For sure, within a few (short) years, there'll be many people wishing they'd purchased during 2017/2018/2019 when, as they will lament, "Auckland house prices were damned cheap".......

Are you still guaranteeing those FHB's who failed to commit in 2018/2019 will regret it in 2020? If not in 2020, how soon will they regret it exactly? 2021/2022? Also, when exactly is your "bull run" happening? You are on record 7-May as saying it will happen again. You must come up with something more credible than "when the DGMs aren't looking"

Here's a chance to demonstrate to readers you know what your talking about.

by tothepoint - d… | 10th May 19, 8:09pm 1557475763

Hi R-P,

I ask you for the second time:

Can you show where I, or anybody else here, has "guaranteed on various threads that another bull run is iminent and on the back of the recent OCR and CGT announcements..."

If you can't substantiate your allegation, then you're not worth wasting time on.......

I've no time for bare-faced liars.

TTP

by Retired-Poppy | 10th May 19, 9:05pm 1557479151

Agent TTP, for being called out for making unsubstantiated predictions, you have become rattled and now calling ME a liar. If you cannot substantiate your predictions maybe it's best you don't make them in the first place. The risk that even one person out there believing you is just too great.

It's not me whos the liar. If you make such outlandish predictions in future, have the courage to stand by them instead of creeping away. When you use the words "for sure" it means it's DEFINITELY going to happen. It's only a matter of when.

You're such an Agent ;-)

by tothepoint - d… | 10th May 19, 10:58pm 1557485926

Hi R-P,

So, you can't substantiate your allegation.

The truth is that NOBODY here has "guaranteed on various threads that another bull run is iminent and on the back of the recent OCR and CGT announcements..."

Not a single thread on this forum has made any such "guarantee". You know that as well as everybody else here.

TTP

by Cowpat | 10th May 19, 5:56pm 1557467784

Pointy, of any current age group, pensioners are most likely to own their own homes, mortgage free, and quite possibly own an 'investment property.' If they have bank deposits as well , then they surely are not struggling.
You need to appreciate the facts once in a while.
The very people still likely to be 'hardest hit' are those wishing to purchase their first home , the same ones that have struggled to do so for a considerable length of time not withstanding an ever decreasing OCR. As a result the average age of a first home buyer has continued to increase, while home own ownership rates have plunged, and will continue to do so..

by tothepoint - d… | 10th May 19, 8:19pm 1557476374

Hi Cowpat (my bovine friend)

Did you know that 40 percent of people 65 years of age and over have no other income aside from their National Superannuation?

Many others 65 years of age and over exist on National Superannuation and (modest) interest payments from bank term deposits. Over the last four years or so, as interest rates have fallen, these people have increasingly found it necessary to dip into the principal - as the (much reduced) interest earnings have not been a sufficient supplement to their National Superannuation.

If you talk to Grey Power, they'll soon put you right on the facts. Low interest rates are having a serious impact on the welfare/wellbeing of many of our senior citizens. It's a major worry for them.

TTP

by Retired-Poppy | 10th May 19, 7:57pm 1557475073

Agent TTP, you say "these people have increasingly found it necessary to dip into the principal" isn't this this the reason why they put money aside in their working years? Its missguided to serve up pity to those who know they can't take money with them to the afterlife and prefer to enjoy it whilst they are upright.

Laughable

Anyhow, you're blinded to the demographic time bomb of retiring boomers who are asset rich, leveraged and cash shy. Its hiding in plain sight. Will they ever want cash in bank, interest and complete departure from the hassles of Landlordism? Current and pending legislation says that in ever increasing numbers that they will.

by Trapped Millennial | 10th May 19, 10:20am 1557440439

The % selling above RV and % selling above ratio is slowly growing more and more negative.

by DitchSkipper | 10th May 19, 3:26pm 1557458763

Shhhhh. You're not allowed to point out the truth on these articles. You tend to get people in a tizz.

by Retired-Poppy | 10th May 19, 5:20pm 1557465633

Well said TM!

by Pietro | 10th May 19, 10:34am 1557441289

Aucklands prices have declined more from their peak than Sydney/Melbourne. Only the fact that our two main media organisations are in bed with the real estate industry has stopped this being reported as such. Prices were crazy @2016 and my guesstimate is that they were up to 30 per cent above fair value. I bought a house in 2013 and it had almost doubled three years later. A flat a relative bought for $280,000 in 2009 now has a CV of $720,000. The identical one next door sold for 600k a few weeks back. So that's either a huge profit or a big drop. Some real estate spruiker said on NZME radio last week that Auckland prices double every 10 years. May have been the case when inflation was in double figures but hard to see when we're struggling to get a cpi of 2 per cent. Still, who knows? A bob each way has always been a good bet.

by house hunter | 10th May 19, 3:15pm 1557458117

Median prices in Sydney are down 14.5% from peak. Median prices in Auckland are only a few percent down from peak. I'm curious how you reconcile those facts with your first sentence.

by Pragmatist | 10th May 19, 11:21pm 1557487279

Well said house hunter. Can't believe that your post had only 1 thumbs up and Pietros has 10. I don't think any sane person can point to evidence that Auckland has already fallen more than Sydney and Melbourne.

by Voiceofreason | 11th May 19, 11:54am 1557532468

"Aucklands prices have declined more from their peak than Sydney/Melbourne"Some suburbs in Sydney are now down about 20%. We're not anywhere near that yet in Auckland, but I have little doubt it's coming.

by JimmyJames | 10th May 19, 10:35am 1557441353

The next generation needs to step up to the plate and take on more debt than their forefathers before them. That’s how everyone gets magically rich. Hopefully they got the hint from Adrian Orr.

by Market Interest | 10th May 19, 10:49am 1557442179

Those that didn't sell will just go to Price by Negotiation. So they'll still sell, just not on the day.

Given that the banks are taking at least a couple of weeks to provide pre-approval - some of my colleagues have had theirs take 4 weeks - the auction day result pretty much only reflects how many cashed-up buyers who happen to be keen on a particular property happen to be in the room at the time. And possibly not even then, if there are no other bidders.

BTW I've noticed that a lot of properties around the EGGS zone have suddenly started selling. Anyone else seen this trend? The only disclosed prices have been good - probably won't know the others until August - but they're disappearing. I'd be interested in any insights if the icnz community has some on these areas.

by Cowpat | 10th May 19, 11:13am 1557443597

Market interest, where are your colleagues buying ?

by Market Interest | 10th May 19, 11:50am 1557445829

So far Massey, Henderson and Beachlands. But personally I'm over the commute.

by Pragmatist | 10th May 19, 4:11pm 1557461482

"Those that didn't sell will just go to Price by Negotiation. So they'll still sell, just not on the day."

They didn't sell becuase there was a disagreement between the vendors and "the market" about the value of the property. Slapping "by negotiation" on it doesn't change that. Somebody has to move or it'll just sit there and go moldy like a few on my watchlist. They've been up for Negotiation for months now..

by Tui12 | 10th May 19, 12:00pm 1557446453

It’s well down. Sham Eaqub for example bought in June 2017 for $1.6 its currently valued at $1.35 and he’d be lucky to even find a buyer at that.

by richard1965 | 10th May 19, 12:36pm 1557448614

Sham Eaqub....and he is an expert.

Now even his prirority and analysis will change. Wait an watch.

by NoFax | 10th May 19, 12:03pm 1557446601

I am at a loss why anyone still tries auctions? Any ideas?

by theglc | 10th May 19, 12:18pm 1557447495

RE agent pressure!

by alittle | 10th May 19, 4:05pm 1557461148

ALso help RE Agent to condition the Vendor to sell at lower price.

by PocketAces | 10th May 19, 6:07pm 1557468459

And give themselves a whole lot of free advertising

by PaulO | 10th May 19, 12:24pm 1557447840

It's essentially a sale without conditions - so super easy for the agent.

by Chairman Moa | 10th May 19, 1:20pm 1557451240

sellers are like sheeps

by HeavyG | 10th May 19, 1:40pm 1557452434

A good way to convince a seller that their expectations may be too high (i.e. reality check).

by Chairman Moa | 10th May 19, 1:54pm 1557453298

That's the old trick agents are using, convince vendor to go on as auction (auction fee + marketing are payable by vendor anyway). At auction, if reserve is not met, they will put a huge amount of pressure on vendor to put it on the market, using bird in the hand tactic.

I've been through that once before many many years ago.

by keenaucklandobserver | 13th May 19, 9:54am 1557698052

so....lie to them with an unrealistic high appraisal? And then give them a reality check with a method that they have paid for? Sounds about right. But vendors themselves can't take the truth that the price that they were expecting isn't going to happen. And the mainstream media with vested interests isn't helping.

by Big_Data | 10th May 19, 6:04pm 1557468243

NoFax - Auckland agents have no idea how to sell in a down market. Give them a couple of years to adjust to the idea that their pretty pics and flowery words won't have people beating down their doors (because they never did - FOMO and low rates drove the bubble).
I am so tired of seeing properties listed without prices. Just price the damn house. If you don't know what it's worth you have no business charging for your 'services'. 'Testing the market' has dubious value when prices are rapidly heading south. You do not have the luxury of time. The longer it takes to sell, the lower the price you will achieve.

This is a price war and a beauty contest. The only homes selling are those that appear to be bargains. Buyers aren't idiots. They can see there is uncertainty in this market. To pull the trigger you'd have to be pretty confident the price you paid was ahead of the direction those prices are heading. That means you need to obtain sales quickly and prices need to be marginally ahead of where the market is going. You need to price aggressively and bite the bullet. If you hit trademe marginally too low, worst case you'll have multiple bids. If you hit it too high (or with no price at all) that home will sit and fester, and all the 'new listing' interest you could have had will be wasted while you languish on page 33 as another unsold home joining the ever-increasing ranks of the unloved.

Buyers are monitoring new listings but they're not monitoring price reductions as avidly. Agents need to wake up to the new reality and adjust their strategies, and stop b*****tting vendors about what's possible. Time is the enemy. A quick sale is the best way to go and that means facing reality and taking losses on the chin.

by Country Mouse | 10th May 19, 10:33pm 1557484411

B_D "Agents need to wake up to the new reality”
How right you are, we moved to Auckland some two years ago. Sold up in Christchurch and moved here with some good equity. As an avid reader of interest I was not about to buy into the Auckland market at that time. It took some gentle persuasion to convince my better half but we have been renting (at an outrageous number) for the last 18 months and very pleased to have made that call. While in Christchurch we bought sold renovated and took some opportunities in the “as is” earthquake damaged market in CHCH. So are quite familiar in dealing and negotiations with real estate agents sometimes in quite complex sales. So over last year we have started attending open homes and getting a feel for the market, Back to your comment "Agents need to wake up to the new reality”

Observations…

Glad we rented, enough said

Auckland REA are hopeless. Crikey where do you start? This lot seem to have only ever known a rising market. Point out glaring obvious flaws and they look at you in slack jawed amazement. Openly tell them you are cashed up and exactly what you are looking for, only one (seriously only one) has ever followed up and that is just recently. Point out the vendor is unrealistic on pricing again they look like a possum in headlights. Don’t even try to have a discussion about a falling market. The contrast between REA in the two towns is very evident. Yours are appalling.

Auckland is great place to live BTW. Loving it might buy in about another year I think.

by keenaucklandobserver | 13th May 19, 9:50am 1557697838

Vendors like it too because it's a sale without conditions.

by Glitzy | 10th May 19, 1:56pm 1557453384

Hi Greg, is there any way a user can download the core data of the residential auction into XL ? I'm curious to see the trend since the FBB came into force re volume of sales in incremental price buckets. Anecdotally it seems North of NZD2mm there has been a drop off in sales volumes. Thanks for your reply.

by Sluggy | 11th May 19, 8:48am 1557521338

I have a friend who sells in the 1.2 ish down bracket, he is quite busy. Another who sells in the 2m plus bracket, she is extremely slow.

by keenaucklandobserver | 13th May 19, 9:56am 1557698214

Which areas?