Spoiler alert: Things have changed – a lot – since the big Covid bubble.
The agent eyeballed me. His eyebrows went up and his slick haircut seemed even spikier than when we first met 20 minutes ago. “No,” he said, sternly, “I never said that.” As I put my shoes back on, hunched over the stoop of the Western Springs property he was trying to sell me, his nostrils seemed to flare. “I didn’t say that ... I would never say that.”
The two-storey house we were standing in front of had clearly been loved. Covered in dark wood, it included a deck shaded by ferns, an art studio out back and a stunning courtyard for drinks in the sun. It was either delicately staged or the owners lived like they were stars in a House & Garden magazine centrefold. That meant shag pile rugs, cute bar stool leaners and greenery in every corner. Block letters on the wall spelled: “H.O.M.E.”
The price? That was the issue. Estimates on Homes.co.nz indicated this house was worth somewhere in the region of $1.2 million, but that was before floods and Cyclone Gabrielle hit Auckland. Those two events, just weeks apart, caused damage and destruction to plenty of the city’s homes and sparked uncertainty in an already declining housing market. We’d only been looking for a few weeks and already we’d noticed prices seemed to be trending even further downwards.
Real estate agents seemed uncertain and no one wanted to talk figures. So I decided to ask this agent outright. Was this home going to go for around $1.1 million? It was well under CV, but it didn’t seem that far off the mark. It certainly didn’t warrant a bit of a telling off. But that’s what I got. Eventually the agent indicated owners’ expectations at the upcoming auction were north of $1.3 million.
As my partner and I drove away, we shook our heads. It was very likely the owners weren’t going to get anywhere near that. Several neighbours had dragged their flood-damaged goods onto berms, with mud-splattered mattresses and cupboards waiting to be taken to the dump. Although the house wasn’t impacted by either of the recent weather events, Auckland Council’s flood plain data maps – a crucial tool for anyone buying a house – showed this home was clearly a flood risk.
That particular auction was passed in. No one bid – or at least, no one bid enough. That same real estate agent has been pestering me with pleading text and email spam to “present all offers now”. With a CV of $1.26 million, that house is still on the market. As lovely as it is, we’re not interested in anything at risk of flooding and neither, it seems, are many others. In February of last year, Homes.co.nz estimates this house was worth up to $1.64 million. Now, it’s dropped to its lowest estimate in three years: $990,000.
This is what buying a home in Auckland looks like right now. Buyers like us are tentative, nervous and scared. Sellers have unrealistic expectations built up from the buoyant market of 12-18 months ago, so their homes sit on the market, refusing to budge at the price the vendors hope for. Homes at clear risk of flooding don’t move unless cheeky offers are accepted. In St Lukes, at a three-bedroom home with a stunning deck, the agent told me they’d received two offers in the low $800,000s. The CV was $1,650,000. We later discovered it was smack bang in a flood zone.
Other notable changes: land size doesn’t seem to matter as much – at least, not in the suburbs we’re looking to move into. Developers have run out of cash so buyers are no longer competing with them. The council valuations are meaningless. Many homes advertise just how far desperate owners are willing to go below the last council valuation provided in 2021, back when the market was booming. “Selling 300+ below CV,” says one home listed in Te Atatū South. “CV $1.38m selling $300k below the CV price,” says another in Mount Albert.
For others, things are even more desperate. Some real estate agents promote properties as being sold under duress. “Urgent Action needed – must be sold,” says the listing for a four-bed, two-bath in Waterview. A six-bed in Grey Lynn has “got to go!” Some sales are just weird: one in Te Atatū South has a CV of $2,355,000, a Homes estimate of $1.7-1.88m and an on-site commercial dentist. Another tells buyers to, “Pool your $$$$ & jointly own this 1459m2 GEM.” Several townhouses come with a bonus $10,000 Harvey Norman voucher.
Search Trade Me for “mortgagee sales” and you’ll find more than 25 properties listed in Auckland. “A fantastic opportunity with huge upside!” say the notes for one. Several are developments paused mid-construction. Photos for a North Shore property with three townhouses mid-build show the site was vacated with giant bags of pink insulation scattered across unfinished decks. A ladder has toppled over in the front yard and planks cover the driveway.
All this is a far cry from where things were at even 12 months ago. Powered by low interest rates, an economy boosted by the government’s Covid payouts, no travel options and endless lockdowns, Aotearoa headed into an unprecedented property bubble. At the time, it felt like a frenzy – and it was. One real estate agent mate told me he was selling homes mid-lockdown from the comfort of his couch. People were so desperate to buy, they weren’t even bothering to look at them.
We saw this happen from our own front door. In 2021, without any prompting, a couple walked off the street and offered us what seemed like an exorbitant amount of money for our humble three-bedroom home. Back then, we had no interest in attempting to move in a market changing so quickly. Last August, our West Auckland neighbours offered us their house before it went to market for $1.35 million. We still weren’t interested. It sold, two months back, for $1,020,000.
Things change. They always do. Now, with our children rapidly turning into teenagers, plus the addition of a very good dog, it feels like it’s the right time to find something slightly bigger. Six weeks ago, despite dire predictions, we decided to give it a go. As soon as our house went on the market, we felt like we were watching its value slump in real-time. We’ve spent hours prepping it for open homes, only for no one to show up. Our hoped-for price has dropped, and dropped again. Our evenings are spent searching Trade Me, plugging addresses of potential homes into flood plain data maps, only to be disappointed time and again. It has felt, at times, a bit pointless.
Nothing is selling at auction. Friends who put their own homes up for sale have taken them down eight weeks later, preferring instead to wait out winter and try again next spring. Where’s the bottom? No one knows, but the further things fall, the better it is for first-home buyers, the people affected most by those soaring prices two years ago. For those caught in the middle, everything feels uncertain. Except, of course, for the reliable ping of notifications from real estate agents hustling for a sale. As one billboard for an Auckland CBD firm warns: “The slower the market, the harder we work.”