Barfoot & Thompson auctioneer David Johnstone. Photo / Nick Reed
Barfoot & Thompson auctioneer David Johnstone. Photo / Nick Reed
Chinese property investors are rapidly disappearing from the auction room, says the boss of Auckland's biggest real estate agency.
Peter Thompson, of Barfoot & Thompson, blames financial instability in China for the dip in those bidding - partly fuelling the market slowdown. "There are a lot less Chinese in the auction room at the moment and at the open homes," he said.
"The market has changed and some of that is the Chinese buyers. There are more requirements in getting money out of China now and that is having an impact."
It comes months after leaked data released by the Labour Party, and published in the Herald, showed 39.5 per cent of Auckland house sales between February and April were to people with Chinese surnames, despite people of Chinese ethnicity making up just nine per cent of the population.
Labour said the data suggested non-resident Chinese buyers were targeting the Auckland housing market, driving up house prices.
Thompson did not believe the drop off was related to the Labour-sparked row over foreign ownership and predicted Chinese investors would return to the market within the next couple of months.
"October is the traditional Chinese holiday period so we may see a pick up then," he said.
Figures released this week indicate a slowing of the market. Barfoot's August sales figures showed a dip in average residential sales prices to $821,079 - the first fall in half a year. Real Estate Institute figures showed median sale prices near flat from the previous month on $740,000.
Jonno Ingerson from Core Logic said there was anecdotal evidence of fewer Chinese buyers - but said the slow-down was temporary.
Jonno Ingerson, Core Logic
"In the bigger picture the flow of capital out of China in the coming years is still more likely than not," he said.
"There is a colossal amount of money in China and cities like Auckland are still very attractive because of pleasant climate, good amenities, excellent education, and it is still cheaper than Sydney."
Ingerson said Auckland was at a crossroad with where property prices would head. Low mortgage rates, shortages of supply and demand from a growing population remained and could keep prices high. On the other the upcoming capital gains tax and a 30 per cent deposit required for investment properties was sure to have an impact. A New Zealand bank account and IRD number would soon be required on sales and purchase agreements.
A recent Home Affordability Report by interest.co.nz found prices for first home buyers had eased with lower prices properties peaking at $616,500 in May and then declining in each of the following three months to hit $600,700 in August.
This week, the Herald on Sunday paid a visit to the Barfoot and Thompson city auctions for central Auckland suburbs. Despite a full room it was clear the frenzied bidding on any and all properties had slowed.
A number of houses were passed in with few or no bids.
Character homes still hot property
A three bedroom bungalow in Ellerslie sold for more than $1.5 million - almost double it's CV and evidence character homes in desirable suburbs are still hot property.
Dawn Buxton, Barfoot and Thompson agent for the Ballin Rd house, said interest was high and she expected the sale price to be about $1.2m.
Bidding on Wednesday was slow to start but saw two bidders going head-to-head. When bidding slowed a third buyer joined in.
The reserve price of $1.25m was passed easily with the owners pocketing $311,000 more than they would have accepted.
"We really didn't expect it to go as high as it did, the vendors were extremely happy," Buxton said.
"It was a lovely property with a big garden and a chicken coop, a perfect family home." Buxton said good quality homes with room for the kids to play always sold well. "And character homes hold their value," she said.
