Property auctions are collapsing, more homes are listing prices and supply continues to boom

According to figures from Realestate.co.nz property auctions are becoming less popular and more homes are showing prices as the shift towards a buyer’s market continues.

According to figures from Realestate.co.nz, the number of auction listings has fallen by over a third (34.3%) while the number of listings showing prices has increased by a quarter.

Meanwhile, the number of homes on the market rose 78% year over year last month, meaning more choice for buyers.

Realestate.co.nz spokeswoman Vanessa Williams said bargaining lists have also become more popular with sellers.

CONTINUE READING:
* Wellington is a buyer’s market for the first time in eight years
* Nearly a quarter of property listings on Realestate.co.nz saw prices fall in February
* Asking home prices fell in 11 of 19 regions in February as the market slowed

Realestate.co.nz spokeswoman Vanessa Williams characterizes the decline in property auctions as a rebalancing of the market.

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Realestate.co.nz spokeswoman Vanessa Williams characterizes the decline in property auctions as a rebalancing of the market.

The change in selling method reflected buyers feeling less urgency to buy.

“This drop in auction listings suggests that sellers and agents are adjusting their selling strategies to accommodate the refrigerated market,” Williams said.

Auctions’ popularity had increased over the past five years and was booming amid Covid-19, peaking in October.

It’s widely acknowledged that record-low interest rates have been driving home prices during the pandemic, and the easing of loan-to-value ratio restrictions resulted in a market that some experts say has been driven more by FOMO (fear of missing out) rather than market fundamentals like supply and demand.

“Auctions harness the power of competition and provide a transparent method of selling, especially when properties are in high demand,” Williams said.

“But when there is less competition, for example when inventories are rising, auctions tend to be less attractive to sellers because they have less control than in a negotiation.”

Williams said the data indicated a “balance in the market.”

“Covid-19 has brought us uncertainty and a real estate market full of record prices and inventory levels.

“The market appears to be stabilizing – which means more predictability for buyers and sellers alike.”

A recent study by Consumer NZ found that 'Mom and Dad's Bank' is the fifth largest provider of home-occupier loans to help families climb the first rung of the property ladder.

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A recent study by Consumer NZ found that ‘Mom and Dad’s Bank’ is the fifth largest provider of home-occupier loans to help families climb the first rung of the property ladder.

Success rates for properties on the auction block have also fallen sharply of late, with success rates falling to 18% in the seven days to April 22 at Auckland’s largest estate agency, Barfoot and Thompson.

Realestate.co.nz chief executive Sarah Wood said last year’s boom in popularity was a reflection of an “unprecedented market”.

She said auctions could still serve sellers looking for an unconditional cash situation.

“It allows them to move faster,” she said.

“The gap between the number of buyers and the number of sellers is starting to close because we have more properties on the market – which we desperately needed.”

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