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NZ - Hot market setting new rules

Sean Wang - Saturday, July 14, 2012

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For area manager Cameron Brewer of Onehunga, Auckland's housing market has an apocalyptic feel to it.

"It's like the end of the world is coming and you're going to miss out. You go to auctions and think you have a chance, and houses are selling much higher than expected."

With partner Aleisha Kerr, a flight attendant, they sold a property in Pleasant St, forcing them into the househunters' dog-eat-dog world, an experience which has already made them feel shellshocked.

In January, they bought a two-bedroom townhouse and embarked on a do-up, selling on June 24 for $430,000, making around $100,000 tax-free.

In a fortnight, they will shift to a rental property and are hoping to be there for only a short time before they find the next do-up to live in.

Now that the couple have sold, they are able to bid at auctions and hold a trump card: cash, unconditional.

Yet already they have been taken aback by fierce competition around Orakei, Ellerslie, Onehunga, One Tree Hill, Greenlane and Remuera.

Many Auckland homeowners are receiving record prices for their places but many who sell without buying are finding themselves walking into a long-term rental trap.

Megan Jaffe of Ray White knows many first-home buyers "having a terrible time, hundreds and hundreds" who have sold and cannot buy because of anorexic listing volumes.

People who sell without buying are taking a huge gamble, she says, and the market is changing faster than many unwary people realise.

Mr Brewer spends his free time scanning every available advertising and listing website and publication, trying to get in before the pack, weighing up potential, calling agents with lists of questions, one of which is "what would stop the auction?" because he would like to be in control.

Some deals are locked into long chains, one house purchase conditional on another in a situation which one agent said was highly exciting for her but perhaps not so much for those on the receiving end.

Jeff Cate of Barfoot & Thompson Remuera says chains are quite rare now with so many places being auctioned.

Many auctions are also being brought forward from the planned date and vendors are taking conditional offers in advance, as a backstop in case the bidding on the day disappoints.

For Aleisha Kerr over in Onehunga, the hunt continues, looking at 15 to 20 places in the past 10 days alone.

"It's just so competitive at the moment," she says, lamenting the double dread of a lack of listings but a wealth of buyers.