KEY POINTS:
House prices are dropping - but most sellers seem determined to sit out the slump rather than take a loss on their homes.
Real estate company Barfoot & Thompson reports an increase in advertised mortgagee sales, with some high-priced houses worth up to $750,000 now being forced into auctions because their owners have over-committed themselves.
But homeowners the Weekend Herald spoke to said they could afford to wait for the price they want, even if it took years.
The Bank of New Zealand said this week that houses were 30 per cent over-valued and warned that prices might fall by more than its previous forecast of 10 per cent.
Barfoot & Thompson is advertising 26 mortgagee auctions in today's Herald Homes. But managing director Peter Thompson said the picture was mixed.
"There are a few more being advertised than normal, but the numbers that actually go to auction haven't increased significantly as yet," he said.
"The banks are still negotiating hard with the mortgagees and try to come to some sort of arrangement.
"Sadly, some vendors do have to sell because of over-commitment. There have been some higher-priced ones that have gone through mortgagee sales. It's not uncommon for $750,000 and $500,000 houses, or even higher than that, to go up for mortgagee auction."
The firm's statistics show that the average sale price in Auckland rose for six straight years to early 2007, flattened out at an average of $544,000 from February to December, and dropped about 5 per cent to average $512,000 in the first three months of this year.
The March average of $522,000 was the highest of the three months, but well down on an unusually high average of $564,000 in March last year.
The Weekend Herald spoke to 16 Auckland vendors and found that eight have cut their asking prices since listing by an average of 4 per cent, but most are either investors or homeowners who can afford to sit out a recession.
Peter and Edit Toth, who listed their three-bedroom Glenfield house at $430,000 through Green Door five weeks ago and have now advertised it as "negotiable", want to move south of the harbour bridge to avoid the traffic.
"I can go and rent [south of the bridge] and rent this one out," he said. "I can afford to sit it out for a few years rather than dropping the price $40,000 or $50,000. That'll pay for a hell of a lot of rent."
Similarly, Jacqui and Neemia Ekueti, who have listed their three-bedroom Flat Bush house with Green Door at $417,000 after living there 30 years, want to move close to their three adult children in Brisbane, but don't need to sell in a hurry.
"I said to my husband, 'Give it three months and see how it goes,"' Mrs Ekueti said.
A month later they haven't changed their price yet and Mrs Ekueti said: "We'll just stay till we sell."
South Auckland - $359,000
Shaezel ("Al") Yaemes and his wife Destiny Ying both worked at Auckland Airport when they paid about $240,000 for their 180sq m, three-bedroom house with spa pool in nearby Weymouth in October 2002.
Now that they both work elsewhere, they have put in an offer for a new home in Ellerslie. But so far they have been unable to meet the precondition - selling their existing home.
"The last government valuation in 2005 was $340,000 or $345,000. That was three years ago," Mr Yaemes said.
"If we had sold at this time last year we would have got about $375,000 for it."
They decided to sell by auction and started advertising five weeks ago for an auction held last Saturday.
"On auction day there were heaps and heaps of agents and three actual people. Bidding started at $280,000 and there wasn't a single bid. Absolutely nothing."
The couple have now listed the house with L J Hooker at $359,000, the low end of recent sales in the area.
"We just can't go down any further than 359. That is our absolute rock bottom to go into the other place," Mr Yaemes said.
Central Auckland - $500,000-$570,000
Anne Duncan Real Estate is advertising Chloe and Oliver Blake's house in Mt Royal Ave on the slopes of Mt Albert as "on top of the world".
The couple bought the three-bedroom house six years ago before they had children. Now they have two, aged 3 and 1.
"We might expand the family and we think this is a good opportunity to look out there," Mrs Blake said. "We came back from our holidays and said, 'Let's put the house on the market'."
The last rating valuation was $480,000 in 2005 and the family expect bids in the $500,000 to $570,000 range at an auction on April 21.
"We started off with 'by negotiation', and we decided to go to an auction because going to Anne Duncan's on Monday night, one of the houses had quite a lot of bidders," Mrs Blake said.
"The forecast is that house prices are going to drop 10 per cent. But it's a seven-year cycle, and that's not something that concerns us.
"We are not too worried about the market because from our understanding, houses that have got unique selling points are selling and there's not a problem, and because we have the views,, why not give it a go?"
North Shore - $1m
Beryl Sanders' two-storey house plus basement in Kitchener Rd, Milford, is just a few minutes' walk from both Lake Pupuke and the sea.
She paid almost $900,000 for it in 2004 and felt entitled to ask $1 million when she put it up for sale through Green Door recently. But she has taken it off the market again rather than accept less.
"I will just drop back and let it go. I can afford to live here another two or three years," she said. "I don't think the doom-and-gloom predictions are right when it comes to the North Shore and views of the sea."
SALES DOWN, PRICES UP
Auckland house sales hit their lowest number for a March month in more than a decade but prices were up, real estate firm Barfoot & Thompson says.
The average sale price for last month was $522,336, up 5.2 per cent from $495,272 in February. But just 632 sales were made, a 56.2 per cent decline from 1444 in March 2007.
Barfoot & Thompson managing director Peter Thompson said prices often lifted in March, associated with the end of the financial year, but prices had clearly eased back overall from where they were at the end of last year.
"From a volume perspective, March was certainly very quiet and the effect seems to have been felt across all sectors of the market from modest first homes through to the million-plus category," he said.
The company ended the month with high stock levels. It had 7379 properties on its books at the close of March, compared with a monthly average of 4817 for the whole of 2007.
Average weekly rents rose to $391 in March, from $382 in February.
Mr Thompson said that was a likely reflection of landlords passing on interest rate rises and other increased costs to tenants.
- NZPA
