'We're seeing one or two': Fewer registered buyers for Auckland properties up to $1.4 million - auctioneer

Ray White chief auctioneer John Bowring says auctions for homes up to $1.4m are attracting fewer registered buyers, but generally sell within 10 days of the auction.
Ray White chief auctioneer John Bowring says auctions for homes up to $1.4m are attracting fewer registered buyers, but generally sell within 10 days of the auction. Photo credit: Getty.

Properties priced up to $1.4 million are attracting fewer registered buyers at auctions, an Auckland-based auctioneer says.

And those that are passed in usually sell within 10 days of the auction, indicating buyers in this price range are more willing to put a conditional offer in.  

Following the Government housing announcement on March 23, ASB forecasts house prices to remain flat through mid-2021, rising 10 percent over the year. An April REINZ & Tony Alexander Real Estate Survey shows a net 23 percent of real estate agents reported seeing a drop in attendance at open homes and a survey of almost 1500 investors showed a net 10 percent more plan to cut back than invest. 

But as it's only been a few weeks since the housing announcement, there's no evidence of a drop in buyer demand affecting property prices. March data from realestate.co.nz shows a 16.8 percent rise in the national average asking price year-on-year. And a March sales report from real estate company Barfoot and Thompson confirms the average price paid for a property in Auckland was $1,107,869, up 2.7 percent on the previous three-month average. 

Ray White chief auctioneer John Bowring confirms in the first two weeks of April, he hasn't seen the number of properties passed in at auction increase. Buyer demand in the $2 million plus price range isn't slowing down, he says.

But he's noticed a drop in the number of registered auction buyers for properties up to $1.4 million, a price range that includes first-home buyers.

"They're still selling but what we're not seeing is the 6, 8,10 registered buyers at the auction, we're seeing one or two," Bowring says.

Many open homes for properties in this price range had as many as 90 groups attend over the three-week marketing period, but only one or two register to bid at the auction.

"Now we're starting to see more of that pause, negotiation and taking a little more time to get the required outcome for our sellers," Bowring adds.

As property valuations cost up to $1500, many first-home buyers struggle to buy at auction as it's costly when they miss out, he says. If properties are passed in, they usually sell within 10 days, giving buyers the opportunity to make a conditional offer.

"I think a lot are saying 'I don't have to buy it, if it gets passed in it gets passed in and I can put an initial offer in subject to a valuation'," Bowring adds.

Wendy Alexander, acting chief executive of the Real Estate Institute of New Zealand said early April estimates show not much change from March. But heading into the cooler months, the number of days properties take to sell could rise.

"The median number of days to sell might lift slightly in April when compared to March, but that's not surprising to anyone working in the real estate profession as this is what we see every year as the weather cools slightly and people take time off for Easter, school holidays and ANZAC Day," Alexander said.

If properties are passed in at auction (due to no bids or not meeting the reserve price), listings can change from 'auction' to 'price by negotiation', or to a fixed price. CoreLogic data for Auckland properties listed at the start of April shows 69 percent were for sale by auction - no change from 70 percent in March and 68 percent in February.