New Zealand

Auckland Real Estate: Online Bidding Pushes Prices Further-Auctioneers

Huge demand for large section houses that can be developed into terrace houses under the new rules.Photo / Peter Meecham, File

Ella Stewart RNZ

Auckland’s housing market continues to skyrocket despite the city spending more than 100 days on blockades while bidders buy homes online.

Kiwis are desperate to get home, but the invisible homes are disappearing, and there is a great demand for large section homes that could develop into terrace houses.

The Reserve Bank raised its official cash rate by 25 basis points to 0.75% this week.

Last year, when the country was first blocked, it left real estate companies in trouble. Barfoot and Thompson had no way to hold a live auction at the venue and contacted an Australian company called Auctions Live.

Since then, auctioneers have begun selling homes from their home lounges using online streaming services.

One roof

Now, three months later, bidders are still spending millions of dollars from the sofa.

RNZ’s First Up was put up for sale in 150 lots behind the scenes at Barfoot & Thompson’s online auction.

The first thing I went under the hammer was the 1031 square meter section on Mount Eden. It was a multi-rental property consisting of one three-bedroom family home, one two-bedroom unit, and five one-bedroom units. The bid was $ 5 million.

After several negotiations between the seller and the interested bidder, the property was sold for $ 6.52 million.

Famous auctioneer Marian Trich said last year’s online auction made Auckland even more successful this year when it was blocked in mid-August.

“We can’t see the buyers, but they can see me. They make their bids, they punch it into the app, it appears on the screen I have, and I accept or reject, and it’s a TV screen running behind me. We’re actually doing it from various auction sites, but now we’re also dealing with phone bidders. Agents can enter our premises, but they must be masked and set aside. “

Barfoot & Thompson Auctioneer Marian Trich.Photos / Fiona Goodall, Getty Images, Files
Barfoot & Thompson Auctioneer Marian Trich.Photos / Fiona Goodall, Getty Images, Files

Since the blockade, Barfoot & Thompson has seen about 7,500 people register online and up to 12 people registering for each property.

The next property auctioned was a four-bedroom home in Linfield, a suburb of Auckland, with views of Manukau Harbor. Bids started at $ 1.7 million and eventually sold to online bidders for $ 2.01 million.

“When a bid is placed, it can be crazy because there is a verbal” live auction bid “. There are announcements, the screen lights up in front of you, and sometimes four bids are placed at the same time, but in reality, which one comes first is calculated in milliseconds, “explains Tolich. increase.

Since mid-August, approximately 43,000 bids have been placed online, with 1500 successful bids worth over $ 2 billion.

Tolich said the blockade stagnated demand in the market, especially when Auckland moved to Level 3, which meant open homes were possible, albeit with strict restrictions.

“In the first few weeks, some people had already seen the property and wanted to buy it. After that, it was quiet for a week or two, but the buyer can resume inspection of the property. When it came to, I bought it in a hurry.

Some house hunters sold before the blockade and were desperate to find a new home.Photo / Bevan Conley, File
Some house hunters sold before the blockade and were desperate to find a new home.Photo / Bevan Conley, File

“I’ve heard that there were cases where I had to sell before the blockade and buy desperately because I had to leave the house. Some people now have to buy because of the pre-approval of financial expiration. And, of course, now that interest rates are rising, there are definitely people there again. “

Based on government-sponsored resource management changes, developers can build up to three homes on most sites, up to three stories, without the consent of the resources.

Tolich said the change would allow people to bid on the property without looking at it in plans to develop a terraced house.

“Especially in Auckland, there are traditional kiwi-style houses over 600 square meters, and you can build 5 or 6 terraced houses under the unity plan. People and developers looking at them I’m not really interested. Home.

“Usually, the homes that the first homebuyers liked to use are now being bought at prices that have been significantly increased by the developers.”

With over 20 years of experience, Mr. Trich said he saw everything, but the continued rise in real estate prices was unprecedented.

“Previously, it was unprecedented to pay $ 500,000 for Epsom’s two-bedroom brick and tile units. Now, people are paying $ 1.3 million for Epsom’s two-bedroom bricks and tiles. I’m paying. This is just an unprecedented price. It’s worth it, but it’s also huge compared to someone paying $ 1.8 million for an average 600 square meter house in Blockhouse Bay. Previously It was $ 950,000. “

Auckland’s average home price is currently over $ 1 million, with a national average home price of around $ 900,000.

Brad Olsen, principal economist at Infometrics, said the problem was that wages weren’t keeping up with rising home prices, and that home prices were expected to fall by 5-10%, but that didn’t happen.

Brad Olsen, Principal Economist of Infometrics.Photo / Tania White, File
Brad Olsen, Principal Economist of Infometrics.Photo / Tania White, File

“Wage subsidies and the strength of the economic recovery in New Zealand have led to an annual rise in home prices of 30%. Having had that experience since last year, we expected the housing market to enter a second blockade again. It could continue to regain its vibrancy, and that’s exactly what it did. October prices rose 2.9% on a seasonally adjusted basis from the month before these intense pressures definitely came to the previous month.

“What we saw with these blockade restrictions in Auckland and other parts of New Zealand was that we were able to sell more homes than before because of these blockades and because of our large size. It’s less. Home sales surged in the second half of 2020. “

Olsen said the increase in the discount rate has already affected the rise in interest rates at major banks.

“For those who are trying to get a mortgage at the moment, repayment of that mortgage is becoming more expensive, and banks are generally seeing that they are starting to limit the amount of loans they make there. Make sure they receive 20% deposits from everyone who is currently moving forward because of the risks that low deposit income and low deposit mortgages bring to New Zealand’s financial stability. “

Meanwhile, returning to Barfoot & Thompson, of the 150 lots auctioned online on Wednesday, 61 were sold, 75 were handed over, 9 were withdrawn, and 6 was postponed.

Auctioneer Marian Trich said it was hard to buy a house.

“It’s expensive, but we recommend that you buy it as soon as possible.

“For all of us, our first home wasn’t our dream home. Allowing children to leave the home and move to a location with three bedrooms and a pool in the middle of Ponsonby. I couldn’t get the dream house until I could. Everyone’s first house You can afford it.

“The sooner you enter the market, the cheaper it will be in the long run.”

Auckland Real Estate: Online Bidding Pushes Prices Further-Auctioneers

SourceAuckland Real Estate: Online Bidding Pushes Prices Further-Auctioneers

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