The Block NZ: Maybe they shouldn't have gone to auction?

Tuesday, 10 September 2019

There were bold design choices in the winning apartment.

A poor result from this year's The Block is exactly what should have been expected from the Auckland property market, one economist says.

Winners Lisa Ridout-Gordon and Christopher Gordon sold their apartment for $1.34 million, just $50,000 above the reserve price.

Others barely made a profit above the reserve at all. Stacy Heyman and Adam Middleton's heritage apartment failed to sell at auction, passed in at $1.44m. However, it sold later in the night for $1.48m.

Ethan Ordish and Sam Whatarangi's apartment sold for its reserve of $1.39m. Sophia and Mikaere Gardiner's penthouse passed in at $1.455m and has since been listed for sale by negotiation by Ray White auction Ruth Hawes.

* The Block NZ: TSB will donate $10k to each losing team

* The Block NZ: 'Best year ever' predicted, with Apartments 2 and 3 running hot**

Infometrics chief forecaster Gareth Kiernan said the result was predictable given the current rate of price inflation in Auckland.

'The reality is that there is a lack of buyer demand in Auckland due to the foreign buyer ban, extended bright-line test, LVR restrictions, low rental yields, and lack of prospective capital gains all hitting investor demand.

Lisa and Ribz were The Block NZ winners in 2019.

'In addition, affordability issues, particularly with respect to deposit requirements, are limiting owner-occupier demand. In such a weak market, properties are taking longer to sell, and auctions tend to be less beneficial for the sellers.'

In Auckland, real estate agents report about half of all auctioned properties selling under the hammer.

Bindi Norwell, Real Estate Institute chief executive said the result was in line with what was happening in auctions around the country.

In Auckland in July, 14 per cent of homes sold via auction, compared to 20.4 per cent a year earlier.

She said about 70 per cent of properties that went to auction nationwide would sell under the hammer or within the next 24 hours.

'If the property still fails to sell, then the property will be put up for sale with either an asking price on it to give the market an idea of what the vendor is seeking for the property or by negotiation,' Norwell said.

'Sometimes, the reason people don't bid at auction is that they might not be in a position to go unconditional at that point in time.'

Norwell said people who were not able to sell at auction could try to understand the feedback received at open homes.

'Is there something simple that can be fixed e.g. painting a wall or re-wallpapering or sometimes it might be that the price is too high. Ultimately, it might be about being patient and waiting another week or two for the right buyer to come along.'

'Lisa and Christopher in Apartment 2, who won the The Block, sold their apartment for $1.34m – the second highest price for an apartment in Kingsland. However, second-placed Stacy and Adam sold Apartment 1 for a record for the suburb of Kingsland for $1.48m. The previous record set for an apartment was back in June 2017 for $1.28m.'