A slow-down the housing market since the introduction of new lending rules has seen a decline in the mania for auctions, and there are signs it's spreading to Auckland's million-dollar suburbs.
Real Estate Institute figures released last week showed November house sales fell 6.6 per cent on the same month last year, but prices remain buoyant.
Economists say the dip is a result of the new restrictions on mortgage loan-to-value ratio (LVRs) imposed by the Reserve Bank, though this is thought to affect mainly the lower end of the market.
Fairfax Media investigated the sought-after Auckland suburb of Westmere last week - one of central area's eight million-dollar suburbs - where 14 homes were on TradeMe.
The suburb, an area of mainly bungalows and villas bordering high-priced Herne Bay, had a median sale price in the three spring months to November of $1,387,500 - a 48 per cent increase on the same period last year.
But in a sign owners and agents are over-valuing the properties, 12 of the 14 listed properties have been through auctions and not sold. Several agents said there were no bids at their auctions.
Five of the failed auction homes now have prices on their listings ranging from $1.125 million to $1.495 million and the rest are for sale "by negotiation".
Fairfax Media was met with a frosty reception when it attended an auction on Westmere Crescent on Thursday. The sparsely attended sale did not generate a bid and the property was passed in.
Earlier in the week a real estate agent selling a home by negotiation said there had been a "backlash" against auctions.
"Buyers are absolutely sick of spending all this money on LIM reports, building reports, and missing out."
Buyers were more cautious and the market was affording them the chance to go at their pace and do their due diligence. Properties were still selling but it was often a few days after the auction and by negotiation, he said.
LVRs were having a slight effect but at the higher end of the market, they were mainly determining where people could afford to buy. People who were looking in Herne Bay were now looking in Westmere, Westmere buyers had been forced to look in Pt Chevalier, and so on down the chain, he said.
Conditional sales were also becoming more prevalent - a contrast to earlier in the year when it seemed the majority of houses were selling at auction, cash unconditional.
The agent also said the financial scene had changed. It was harder for people to get bridging finance as the banks no longer has the certainty they would sell their original homes.
A woman who has recently bought in the suburb said her property had also been through an unsuccessful auction. The property had been valued four months ago and she bought it, by negotiation, for $160,000 less than that figure.
Other agents credited the unusual situation with a glut of properties on the market in November that spread the buying pool thin.
One agent said buyers were being "a bit more picky now".
"They've been waiting for this slight downturn and now the'ye being a little more cautious."
- © Fairfax NZ News
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