Has Covid cooled the Auckland housing market? Kim Knight sits in on an Auckland property auction.
It’s like pulling teeth. Gold teeth.
“I’ll take it in fifties,” says auctioneer Marian Tolich. But suddenly the room is moving.$100k. $200k.
The bidding hits $2.4m and now Tolich is a Bingo caller in kitten heels, sing-songing the crowd: “Two-point-four and is there any more?”
The room is a lit fuse, a shaken bottle of Champagne. Tolich stands front and centre, dispensing hopes, dreams and character homes in Mt Eden. Eleven minutes after bidding starts the property sells for $2.9m. Four bedrooms, a white picket fence and a quarter of a million dollars over the reserve.
And we’re away. Four bedrooms in Epsom for another $2.9m; high studs and leadlights in Greenlane for $2.2m; a Lynfield unit for $881k. Last Wednesday, in Barfoot & Thompson’s central Auckland auction rooms, Tolich hammered home 19 properties with a combined sales value of almost $27.5m.
Going. Going. Gone to the buyers in jandals and suit jackets and stylish navy blue trench coats. Late afternoon and the man in the Black Sabbath T-shirt teeters. The three double bedrooms zoned for Mt Albert Grammar are increasing at $1k per second. The bid sits with him. He leans back, his hand unconsciously and briefly connects with a woman in sparkly sneakers. It’s theirs for $1,279,000. The woman exhales. “Jesus…”
Break down the math and gulp: Every minute of this auction $118,336 was spent. Anyone hoping for a Covid-induced cooling of the hot mess that is home buying in Auckland should keep saving. In April, when OneRoof asked real estate chiefs what would happen next, Peter Thompson, Barfoot & Thompson’s managing director, pointed to the last three significant economic downturns.
“In 1987, 1997 and 2007 the downturn in the average price of homes never declined by more than 5 per cent and prices recovered within 12 to 18 months.”
Six months later and this just in from the Reserve Bank: September mortgage lending was at its highest since records began. Of the $7.3b borrowed, 19 per cent went to first-home buyers.
Pick them from this crowd. Couples, mostly. Steely calm and then a fist pump of relief.
Andrew and Alice are professionals in their mid-20s. Bidding on the Ōtāhuhu property that they (and their cat Margaret) want to buy starts at $600,000. At $755,000 it’s the bargain of the day so far. Andrew lifts Alice off her feet and kisses her. A movie moment in a room clammy with people who have been there, done that and are doing it again and again because they got in on the ground floor of this ever-escalating housing market.
“We’re hoping that Ōtāhuhu will be the next to gentrify, like Panmure and Greenlane. It’s spreading out from the city centre and we figure Ōtāhuhu is kind of next on that path,” says Andrew. “Living in Auckland, we never really had any plans to buy any time soon, but interest rates made it a bit more affordable, I guess.”
They would have gone a little higher. “Not a crazy amount higher. But we’re pretty happy with what we got.”
They leave to drink Champagne on their real estate agent. Phoebe and Nick are leaving too. She’s from Canberra, he’s from the United States, their toddler is a triple-citizen and, in January, they’ll welcome a newborn.
Phoebe: “We thought there might be a bit of a crash with Covid. Or not even a crash, just a flattening. So we quickly got organised. To no avail.”
Their limit is around $1m. The Mt Roskill three-bedroom they were after sells for $986,000, but they reckon they would have needed to spend another $100k to meet their family’s needs. A new baby AND renovations?
“You would laugh,” says Phoebe. “If you didn’t need a house…”
Maybe, says Nick, the bubble will burst. “And this could all be ridiculous.”
In fact, not everything today sells. Certainly nothing hits the breakneck pace of that Mt Eden opener. A Queen St apartment is passed in at $420,000. A Meadowbank home divided into three flats goes back to the vendor at $2,650,000. There are long pauses while the message on the video screens read “currently negotiating”. This morning, Murray Smith was at the auction podium. This afternoon, he’s wearing grooves in the carpet, going between the sellers who sit in consulting rooms and the buyers who are out in the open (though, in these communal surface-sensitive Covid-times, they no longer have to wave a paddle).
“Another couple of minutes, Murray?” calls Tolich. The ambient music has gone full dirge. “Can we put on something more lively?” she pleads and the next track is literally called Dance. Close your eyes and you could be at the small-talk phase of a party. The conversation hums. Everybody’s keeping half an ear on everybody else. A little girl in the front row quietly, solemnly eats an apple and then pulls her dress up over her head. Any minute, something unexpected could happen.
Mt Roskill, passed in at $990,000. Grey Lynn, passed in at $2,250,000. Sandringham, passed in at $1.9m. There’s a battle of wills as Mt Wellington goes up in $1k bids, finally selling at $751,000.
Back on the auction floor, Tony is making good on the Avondale section he bought more than a decade ago for $580,000. It sells, post-auction, for nearly four times that. But watch this space, because it’s zoned for terrace housing and apartment building and he’s done the ground work for eight units.
“I expected a bit more actually, because down on the flat on Canal Rd, which is a rough bit of Avondale, 3000sq m went for nearly $3m. It went for a million over GV and that’s just a flat bit of dirt.”
He shakes his head.
“You could go to Dunedin and buy a hundred homes…”
Bree and Sean need just one home. They’re engaged, they’ve been “quite serious” about four or five places, and they’ve missed out every time. It goes down to the wire today in the final lot of the auction. At 5.27pm, the Mt Roskill brick and tile unit is theirs for $851,000.
“It takes so long to get your head around what the market is like,” says Bree. “You do have to be a bit lucky.”
Mt Eden: Four-bedroom character home
Opening bid: $2m
On the market: $2,650,000
Epsom: Terraced townhouse
Opening bid: $1.5m
On the market: $1,765,000
Mt Roskill: Two-bedroom bungalow
Opening bid: $950k
Passed in: $990k
Kohimarama: Two levels and a spa
Opening bid: $1,080,000
On the market: $1,315,000
Sandringham: Three-bedroom villa
Opening bid: $1.8m
Passed in: $1.9m
Dannemora: Four-bedroom brick and tile
Pre-auction offer: $1.3m
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