Just 199 homes went under the hammer last week, the quietest auction week since 2023

New Zealand’s auction rooms have gone about as quiet as they get. Just 199 residential properties were offered at the auctions monitored by interest.co.nz in the week of 18 to 24 July, the smallest weekly tally the site has recorded outside the Christmas shutdown since August 2023.

Of those 199 properties, 86 sold under the hammer. That is an overall sales rate of 43 percent, which means well over half the homes taken to auction went home unsold and their owners now have to negotiate a price the slower way.

The number is worth pausing on because the run of weak weeks before it was already ugly. In the week of 11 to 17 July, 234 properties were offered and only 79 of them sold, a clearance rate of 34 percent. So last week fewer homes were put up, but a much bigger share of them found a buyer. Vendors who did front up were meeting the market rather than testing it.

That is the pattern of a market where the shortage is not buyers so much as sellers willing to commit to a date. Auctions are a confidence format. A vendor who goes to auction is betting that enough competing bidders will turn up on the day to push the price past the reserve. When that bet stops looking good, agents steer listings towards price by negotiation, deadline sales and plain asking prices instead, and the auction count falls even though houses are still changing hands.

Winter and the July school holidays explain part of it. Auction volumes always sag between June and August, and the last two weeks have brought heavy rain, flooding in the Grey District and a hard southerly with snow warnings across much of the country. Nobody moves house in that. But the seasonal dip this year has landed on a market that was already flat, and that makes the low a bit more than weather.

The wider numbers say the same thing. The Real Estate Institute’s June figures, released on 15 July, put the national median sale price at $770,000, up 0.7 percent on June last year but down 1.3 percent on May. The institute’s House Price Index, which adjusts for the mix of properties selling, is down 0.8 percent over the year. Homes took a median 48 days to sell, one day quicker than a year ago. New listings rose 4.3 percent on last June to 7,942.

More stock, flat prices and slow sales is the arithmetic of a buyer’s market, and the transaction count backs it up. Cotality’s monthly housing chart pack, reported by RNZ on 23 July, found sales fell 4 percent last month against a year earlier, the sixth monthly decline in a row.

Cotality New Zealand chief property economist Kelvin Davidson told RNZ the balance of power has tipped without tipping over. “It’s not fully in favour of buyers, I mean, sellers don’t have to capitulate,” he said. “Buyers know they have quite a bit of choice, and so yeah, they do, on balance, have that power when it comes to pricing.”

He said there was “no obvious catalyst for a sharp turnaround at present” and that the second half of the year was likely to look much like the first. One group is taking the opportunity. “First home buyers are certainly taking advantage now. They’re running at record shares of the market at the moment,” Davidson said.

The national averages also hide a country splitting in two. Wellington’s house price index is down 4.5 percent over the year and Auckland’s is down 3 percent, while Canterbury’s median rose 5.2 percent to $710,000 and the West Coast led the country with a 12.9 percent lift to $474,350. Grey District and Central Otago both set all-time district median records in June, at $595,000 and $1,000,000. The auction weakness is concentrated where auctions are most common, which is Auckland, and Auckland is the market that has gone backwards.

What happens next depends heavily on the cost of a mortgage, and the news there has turned. The Reserve Bank lifted the official cash rate to 2.5 percent in July, its first increase in more than three years, and the banks passed that on to floating mortgage rates in full. Wholesale swap rates have kept climbing since, and fixed rates are expected to follow. Borrowers who have spent two years rolling onto cheaper rates each time they refix are running out of that tailwind, and buyers who stretched their budgets on the assumption of further falls will need to redo the sums.

For sellers the message from last week is fairly blunt. The 43 percent clearance rate was the best in weeks, and it came from a much smaller field of vendors who had clearly set realistic reserves. Optimism is not selling houses at the moment. Meeting the market is.

For buyers, particularly first home buyers, this is about as much negotiating room as the market has offered in years. There is more stock than usual, homes are sitting longer, and more than half of everything going to auction is passing in and becoming a private negotiation. The catch is that the interest rate window that made the past year affordable is starting to close, so the choice is not simply whether to buy but whether waiting for a cheaper house costs more in a dearer loan.

Interest.co.nz says the latest orders of sale suggest auction numbers should pick up a little this week. Spring listings will do the rest. Whether the buyers come with them is the question the past six months have not answered.

Are you buying or selling at the moment, and what are you seeing in your local market? Tell us in the comments below.

This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂