More than half of Auckland residential properties at three big auctions failed to sell on the day and a director of the city's biggest agency has advised sellers to be "realistic" on pricing.
Results from Barfoot & Thompson auctions last week showed many of the places not drawing a bid, being passed in or withdrawn.
Last Thursday, at the Bruce Mason Centre on the North Shore, 23 out of 38 properties failed to sell on the day in one auction room. In another room, 10 out of 22 properties failed to sell on the day.
Last Wednesday, at the company's Shortland St headquarters, 20 out of 32 properties failed to sell on the day.
Kiri Barfoot, a Barfoot director, said that last year, the firm's auction clearance rates were as high as 80 to 90 per cent on a good day. Yesterday, she acknowledged auction clearance rates were as low as 39 per cent in the central and western area.
"Yet for the city/eastern area, the rates are 57 per cent and for mortgagee auctions, they were 100 per cent because four out of four properties sold," she said.
Interest.co.nz yesterday reported that Harcourts' auctioneers were busy last week "with 153 homes around the country marketed for sale by auction, of which five were withdrawn, 88 were sold and 60 were passed in, giving a clearance rate of 59 per cent".
Mortgage broker Bruce Patten said auction clearance rates had fallen from unprecedented highs of about 95 per cent. "There has been a frenzy of activity in the investment space before the banks changed their policies," he said.
Ms Barfoot acknowledged the changes but said they had been influenced by a number of factors, including school holidays which deterred buyers.
"Auction clearance rates are a little lower than they have been for the last few years," she said referring to 2013.
She said auction clearance rates had fallen last month but it was only a few percentage points. Many properties sold shortly after an auction, she said, rejecting speculation of rising auction failure rates.
The Reserve Bank's October 1 crackdown on the sector demands investors buying in the Auckland Council boundaries to have 30 per cent deposits and soon a quick-flick bright line test will be in force, taxing those who sell places within two years. Next year, a withholding tax is planned as part of that, potentially strengthening Inland Revenue's gains from the multi-billion dollar sector.
Asked what people should make of the changing scene, Ms Barfoot had clear advice: "Vendors should be realistic with their prices and listen to what the market is saying."
However, Barfoot sales data for last month showed prices and volumes up, as did Real Estate Institute data out on Monday.
University of Auckland Professor Larry Murphy predicted auctions would remain popular and it was too early for more fixed-price listings.
Data from CoreLogic showed investors accounted for about 40 per cent of the market but he predicted that figure would fall, potentially removing competition for first-home buyers. Landlords had fled Auckland for other areas, he said.
Outspoken landlord: I'm not buying
Outspoken Auckland landlord Ron Goodwin, 74, says he is not looking to add to his $18 million, 37-property portfolio.
"We're close to the next crash," he said of Auckland's housing market, adding that he had been forced out from buying for nearly a year by the extremely high prices.
"Only fools would buy properties right now. The market is too heated," said Mr Goodwin, who gets $14,500 a week in rental income.
"I bought my last property in November," said the man whose business card describes him as "unemployed and unemployable". "Please don't offer me a job. I have more than enough work for the rest of my life," says the Stanmore Bay resident.
His portfolio includes 12 houses in Whangaparaoa near where he lives, six in Hillsborough, seven in Glendene and others throughout Auckland and in Hamilton.
"The only place to own a rental property is within five minutes' drive of where you live," he said, explaining his portfolio was more widespread because he had moved houses over the years.
His advice this week - not to be too kind to tenants because they take advantage - drew flak, including from the Rev Mark Beale, who runs a church trust which has accommodated up to 20 families.
Mr Goodwin had more than enough earthly riches, so could be far more charitable, the vicar said.
"He's a multimillionaire who can afford to help people. He can afford for them to take advantage of him," Mr Beale said. "People are not treating houses as homes any more but as money-making ventures."
• Barfoot & Thompson auction results:
• Last Thursday, Room 1, Bruce Mason Centre, North Shore: 23 out of 38 properties failed to sell on the day.
• Last Thursday, Room 2, Bruce Mason Centre, North Shore: 10 out of 22 properties failed to sell on the day.
• Last Wednesday, Shortland St, city: 20 out of 32 properties failed to sell on the day.
Source: Barfoot & Thompson auction results sheets.