PHOTO: Property investor and ex-auctioneer Matthew Ryan. STUFF
According to STUFF investor and ex-auctioneer Matthew Ryan is blunt in his opinion of property auctions today, describing them as “like a modern day Gallipoli”, where vendors’ homes are sent “over the top” by estate agents in the hope some might be sold.
“I don’t want to minimise or make it sound like these situations are the same as people giving up their lives to jump out of the trenches at Gallipoli,” he said.
“But it’s a modern day version, where agencies keep listing properties for auction despite the chance of having one bidder is pretty low, and the chance of having two bidders is even lower.”
A Barfoot and Thompson auction held on Thursday last week at the agency’s Promenade office suggested Ryan’s assessment was not far off.
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Two of the 10 lots sold under the hammer, with the rest all passed in, although auctioneer Tony Loughran said several had conditional offers ready for the vendors.
“Money’s hard to find at the moment,” Loughran said, as the sixth property failed to sell under the hammer.
Of those that sold, the first was a property in Beach Haven being sold “as is” with no vendor warranties, which went for $545,000 – $375,000 below the estimated value from Quotable Value (QV).
The second, in Forrest Hill sold for $1.43 million – $10,000 above QV’s estimated value.
That auction seemed typical. On the same day at an auction at Barfoot’s Waiuku branch one of four properties sold, at another in Pukekohe one of six properties sold.
At the central Auckland branch, one of three properties sold, and the only property put up at the agency’s Glen Eden Branch also passed in.
Barfoot’s operations manager Vaughan Borcovsky said the clearance rate at auctions (or those sold under the hammer on the day) for the last three months sat at just over 30%.
Results posted online from Barfoot’s auctions last week show 33% of properties up for auction sold under the hammer.
Borcovsky said sellers were always given advice on whether an auction was the best way to go.
Sellers were increasingly not going to auction, although he did not have figures.
“Auctions still provide the best opportunity to have an unconditional sale,” he said.
“Listings have increased and buyers do have more choice, but that auction does mean if you’ve got a situation where a property is desired by more than one party then they do end up competing and paying a premium price.”
Barfoot did not charge extra o take a property to auction, Borcovsky said.
He said Ryan’s Gallipoli analogy was unfair, and only the real estate agent knew the personal circumstances of the seller, which could have informed the choice to go to auction.
“The vendor sets the reserve, which says they won’t sell the property for anything less than that reserve.
“If the property does sell we are beating the expectation of the vendors at that price.”
