In the week before Christmas, it seems Aucklanders are abandoning auction rooms – real life and virtual – leaving properties un-sold and vendors hanging.
In the past week in the city’s biggest auction rooms, Barfoot & Thompson, just one third of properties sold under the hammer or later that day, a total of 130 properties selling out of 374 up for auction.
The week before, according to figures from the agency, just under half (47.5%) of the 354 properties sold.
These figures are well down on the company's November success rate of 61.2%, when 736 out of 1201 properties sold. And during lockdown, from August 18 to the end of October, when properties were scarce and demand was high, 910 properties sold at auction, a success rate of 78.2% the company told OneRoof.
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“It’s unbelievable, all in these last minutes,” said Barfoot & Thompson auctioneer Marian Tolich.
She noted that previously-hot properties in areas zoned for development density have particularly missed out.
“Some have come unstuck, particularly those where people have bought, got partway through consents and were now trying to on-sell for a profit. They’re trying to get another $300,000 to $500,000 that’s not there.”
A five-bedroom house on Acorn Street, Royal Oak, Auckland sold for $4.17m after 220 bids were placed. Photo / Supplied
Tolich was disappointed that few first home buyers were there to snap up the units and granny flats that had earlier been monopolised by investors, who are now no longer bidding.
“There were no takers, even for the $400,000 ones, I kept thinking ‘first home buyers, where are you?’ Though banks haven’t made it easier for them to buy existing houses, new terrace houses with lower deposits are more attractive.”
She said even in the pricier suburbs like Ponsonby, passed in rates had been growing by the week, despite higher numbers of properties available.
“Maybe people are over it for the year, thinking they’ll hold back and reassess in the new year. Agents say they are getting fewer people through open homes, and definitely the speculative market has gone.”
Tolich said the slowdown was evident three or more weeks ago, but the general public are only just catching on now. In-the-know vendors have listed their properties and already booked auctions starting from January 17, the earliest for many years, she said.
On the North Shore, Martin Cooper, owner of Harcourts Cooper & Co, told OneRoof that from a 92% clearance rate in October and 83% in November, just 57% of auctions last week sold under the hammer, with another 71 lots to be called this week.
A home and income, on a site with development potential on Ngataringa Road, Devonport, sold for $3.1m. Photo / Supplied
“There’s an increased supply of listings on the Shore, from 900 last month to 1600, so buyers’ choice is wide. For the last 10 years, average monthly sales have been 400 to 500 so that’s a lot of property to sell through now,” Cooper said.
That was to be expected, he added, after 107 days of “blockage” through lockdown, savvy vendors are now getting a jump on the market for January.
“We’ve got agents working through, there’s still good demand from buyers who are thinking ‘I’ll just go now'. People want certainty.”
Top price this week at Harcourts’ auctions was $3.1m for a 984 sqm property in Ngataringa Road, Devonport zoned for suburban density. The three-bedroom home, with two additional rental units, on the market for the first time in 50 years, had a ratings valuation of $1.75m.
Ray White national auctioneer John Bowring said that while auctions are still the best way to make an unconditional sale, the problem is the gap in price expectations between buyers and sellers.
“Vendors think prices are still going up $5000 a day, and that’s not the case now. Banks are making it harder for buyers – people who a couple of months ago had approval for $2.6m borrowing, that’s been cut to $2.4m.
“Some vendors who might have made $1m profit, three months or even one month ago, are now looking at $750,000. But that’s still good money.”
In South Auckland, a modest three-bedroom house in Cobham Crescent, Otara, fetched $995,000. Photo / Supplied
But, Bowring added, really good properties are still getting the bidders and good prices. He said a good house on a roomy section in Acorn Street, Royal Oak, sold for $4.17m after 220 bids were placed.
“The $4m to $7m market are not that affected, they don’t rely on the banks and can probably write out a cheque for that. It’s the $1m to $3m that has slowed right down. “
At Bayleys auctions this week, Auckland clearance rates slipped to 45%, from their November rate of 71%, with Hamilton down to 38%, Tauranga at 44%, Christchurch at 54% and Whangarei at 53%.
And at Ray White Manukau’s auctions, the bellwether of investor and development buyers’ sentiment, success rates have slipped from 70% from the end of November/start of December week to 50% this week.
A modest three-bedroom house on a 700 sqm development site in Cobham Crescent, Otara, fetched $995,000, still 88% above its CV, but nothing like the records earlier in the year, where development sites sold for more than twice their CVs.
