Auckland's auction clearance rate has dropped below 30 percent for the first time in more than five months, according to sales figures supplied to OneRoof.co.nz.
A total of 92 properties from 334 scheduled auctions sold under the hammer in the week to November 2.
The clearance rate - often a key indicator of how the property market is performing - dropped 2 percentage points from the week before to 28 percent, and continues a downwards trend that began more than a month ago.
The last time Auckland's clearance rate was above 40 percent was the week ending September 14, although the rate has averaged 36 percent since the last week in May, when OneRoof.co.nz started recording auction results in Auckland. There is note of caution, though, as the sales figures supplied to OneRoof.co.nz do not record post-auction sales.
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The figures come as Auckland's biggest real estate agency, Barfoot and Thompson, revealed that Auckland house sale prices in October hit a new agency high for the year, at $937,277.
The Auckland area with the highest clearance rate in the week to November 2 was Papakura, at 36 percent. However, that was reflective of the area's low number of scheduled auctions - 11, with four properties selling under the hammer.
The next highest clearance rate was in Auckland Central, at 30 percent, followed by Franklin (27 percent) and Manukau City (25 percent).
Most of the properties that sold under the hammer (55 percent) achieved a sale price of between $500,000 and $1 million, and that price bracket has made up the bulk of Auckland auction sales in the last month, holding steady at around 44 percent.
Twenty-nine percent of recorded auction sales achieved a sale price of between $1 million and $1.5 million.
Just five properties sold at auction for between $1.5 million and $2 million and three for more than $2 million. Four properties (or four percent) sold for less than $500,000.
The median price was $884,500 down from $920,000 the week before. The average median sale price for October was $969,250.
The highest price achieved at auction for the week to November 2 was $3,060,000, for 70A Selwyn Avenue, a four bedroom home in Mission Bay marketed by Barfoot and Thompson agent Julie Kennedy. Also breaking the $2 million mark were: 81 The Strand, a three bedroom property on the beachfront at Onetangi, on Waiheke Island, which was marketed by Bayleys agents Sherryn El Bakary and Carley Allinson and sold for $2,750,000; and 23 Mewburn Avenue, in Mt Eden, which was marketed by Barfoot and Thompson agents Ryan Harding and Matt O'Rourke and sold for $2,370,000.
Clearance rates can be used to gauge whether the current conditions favour buyers or sellers. They are typically expressed as a percentage and show the number of properties that were sold - or cleared - at auction during a specific time period.
A low clearance rate suggests conditions favour buyers while a high clearance rate is generally considered a signal that the market is "hot" and that buyer demand is high.
In the last five months, the clearance rate in Auckland has dropped below 30 percent on only one other occasion, at the start of winter. The clearance rate for the first week June was 29 percent, with 51 properties selling out of 181 scheduled auctions. The median sale price for that period was $1,142,500 - above the $884,500 recorded last week.
Barfoot and Thompson auction manager Campbell Dunoon said the Auckland market was property specific at the moment. "Although our auction success rate is down slightly on the same period last year, good properties in good locations are still selling under the hammer for good prices.
"Stock levels are healthy, and, more importantly, so are attendance levels at our auction rooms. The buyer interest is there, and that's a good indicator of what can happen if a property passes in - the vendors have a pool of buyers they can negotiate with.
Price was an issue, Mr Dunoon said, adding that there was still a gap in many cases between what buyers were prepared to offer and what vendors were prepared to accept. "Both groups seem to be in an wait and see mode," he said.
In Australia, the housing market has been jittery over the fact that the clearance rates in Melbourne and Sydney have dipped below 60 percent.
Bayleys national residential manager Daniel Coulson says the fact that Auckland's clearance rate is lower than Sydney's should not be a cause for concern.
Mr Coulson told OneRoof.co.nz last week: "The percentage of properties in Sydney and Melbourne that go to auction is much higher than in New Zealand. During the height of the market in New Zealand, Auckland was on par with Melbourne and Sydney but now auctions make up about 25 percent of property sales in the city."
Mr Coulson said that clearance rates in New Zealand often depended on the location and quality of properties on offer, but they also varied according to the agencies running them, with some more fast-paced than others.
He added: "Many of the properties that fail to sell under the hammer in New Zealand are sold shortly after, with the auction process helping push along negotiations. Clearance rates in New Zealand also don't reflect the fact that many vendors decide to hold onto their properties even though there has been strong bidding in the room and they've been presented with a market value price.
"Although there are similarities between New Zealand and Australian property markets, they behave independently of each other and there are different dynamics at play in Australia that don't apply here in New Zealand, such as the fallout from the royal commission into banking practices."
Harcourts NZ CEO Chris Kennedy said there had been a slight drop in the number of auctions listings year on year. "October takes us into the summer selling season and this will as always produce stronger results.
"We always see a change in auction listing stock given the slower winter period, so the current numbers being reported are not surprising."
Barfoot and Thompson said that although its auction clearance rate was slightly down on last year, the average price for October had hit $937,277 - the highest point for the agency this year.
Peter Thompson, Barfoot and Thompson managing director, said that volumes were also up. "In comparison with where the market has been for the past nine months, October trading was extremely active. Spring arrived and the market came alive. The average sales price for the month at $937,277 was the highest this year and up 1.5 per cent on the average for the previous three months," he said.
In January, the average sale price was $934,753. By August, it went to $928,266 and $929,757 by September.
Barfoot and Thompson sold 884 properties in October, well down on its 1027 sales in March but also well ahead of its 593 in January this year. This year's October sales figures were the highest in three years, it said.
While October's average sale price set a record for 2018, it is still below those notched up in 2017. The highest average sale price recorded by Barfoot & Thompson was $968,570 in March last year.
