KEY POINTS:
What a difference a year or two can make to the atmosphere and action in a real estate auction room.
This time last year, the New Zealand property market was well in decline after a five-year boom that produced small paper fortunes for many, and despair for renters
watching prices race beyond reach.
Entering last winter, the market was still being spurred by labour shortages, rising wages and a reasonably robust economy, but the confidence was gone.
At auction, it was becoming a struggle to shift half the properties offered and agents were pining for the good old days between 2003 and 2006 when the big companies were disappointed if they didn't sell 70 or 80 per cent of homes under the hammer, often at prices well beyond reserve, and then clean up the rest the next day.
Fast forward to the winter of 2008: while it's been wet, cold and miserable for most, imagine what it's been like for many homeowners with that "for sale" sign on the front lawn and the agents trying to work a deal in the cyclic winds of real estate.
Throughout New Zealand, prices are dropping from levels way out of kilter with household incomes.
In Auckland, a house is probably worth 5-15 per cent less than it was at its statistical peak in April last year, and it may drop more during the next year or so.
The most telling statistic is the number of recorded sales. July is traditionally a poor month, but the 1411 in wider Auckland last month was the worst performance covered by the Real Estate Institute's 16-year-old data. That compares to 3583 in 2003, 2609 in 2004, 2950 in 2005, 2754 in 2006 and 2446 last year.
The Herald on Sunday last week visited the city auction rooms of Auckland market leader Barfoot & Thompson to record a snapshot of the city's residential market. The result, with a couple of bright spots, showed how tough things are.
Buyers seeking bargains are apparently holding back, waiting for the usual spring promise of a range of new listings and sellers with realistic sights. Three of the 13 lots on offer sold, and only one appeared to pass its reserve. More than half failed to attract a bid.
"It all comes down to confidence and this is a difficult, difficult market," said Barfoot & Thompson's auction manager Tim Carter.
He has detected "more activity" lately and said good numbers were starting to attend auctions.
As price expectations were lowered in tune with the market, he was confident the arrival of spring and new listings would bring more buzz back into auction rooms.
