New Zealand Property: Downturn in Auckland housing market sees five auctions cancelled over lack of interest

The downturn in the Auckland housing market has seen five auctions cancelled due to a lack of interest. 

The cancelling of auctions has been put down to the slowing housing market, which is underpinned by a high supply of homes as sales activity plummet and house prices drop.

According to the Real Estate Institute's (REINZ) latest report, the number of properties sold fell 35.2 percent annually to 4860 but the total number of houses for sale nationally increased by 70.8 percent to 27,050. 

This has seen one real estate company cancel the auction of five homes the night before they were due to go up for bidding because no one pre-registered.

Only 23.4 percent of homes that made it to auction day in the last month got sold, according to property website OneRoof. While, real estate company Barfoot & Thompson only had 25 out of 131 homes sold in the last week at auction, according to media outlet

Rising interest rates and cost of living pressures are also affecting house prices. 

The Reserve Bank on Wednesday raised the OCR to two percent, up 50 basis points, in the face of 30-year-high inflation. That takes the cash rate to its highest point since mid-2016 and means a likely rise in mortgage rates.

National Party's finance spokesperson Nicola Willis said the 50 basis point shift would mean "more pain on the horizon for anyone with a mortgage". 

"Rising interest rates will be difficult news for Kiwis already battling the cost of living crisis. This is the first time ever the Reserve Bank has increased the OCR by 50 basis points twice in a row, reflecting just how severe inflation has become," she said.

"A family with a $700,000 mortgage is on the hook for $14,000 more a year in interest than this time last year. If, as KiwiBank expects, mortgage interest rates rise to at least six percent, a Kiwi family with a $700,000 mortgage will be paying at least $42,000 in interest a year - around $800 a week in interest alone."

Tighter lending rules which made it harder for homebuyers to gain approval for mortgages from banks are playing a part in the downturn in prices. 

Two of New Zealand's major banks - ASB and Westpac - are predicting house prices to fall by about 20 percent over the next 12 months.