Auctions are all the rage right now.
The property market’s defying all the ‘doom and gloom’ pandemic predictions of six to nine months ago and showing absolutely no signs of slowing down. For all those reasons and then some, competition at auctions is fierce.
In a market fuelled by record low interest rates, shortage of supply, and growing demand, auctions are a hugely popular method of buying and selling because they’re a transparent method of establishing true market value.
Funnily enough, it’s not the real estate agent or auctioneer’s job to know the likely market value of a home in a market which is so unpredictable. It’s their job to deliver the best marketing reach, capture qualified interest, and help buyers get themselves into a position to bid with finance and inspections already in the bag.
In this market, with many house sales figures exceeding even the wildest expectations and no amount of crystal ball gazing able to foresee the records being pinged on a daily basis (the average asking price for a house in Auckland just cracked the $1M mark) who knows what a house may sell for?
Auctions in our six Harcourts Otago Real Estate offices in Queenstown, Wanaka, Cromwell, Alexandra, Balclutha and Dunedin tell the story loud and clear. In October 2020 there were 15 auctions across Otago with a 93% success rate, and the one property that didn’t sell at auction sold shortly after.
In one October auction, all were successful with seven properties sold, four in Queenstown, two in Wanaka and one in Dunedin. Five of those properties sold for more than $1million.
Of the Wanaka properties, one in Aubrey Road had 20 registered bidders from all over New Zealand. 109 unique parties viewed the property (through Open Homes but also via Facetime and Harcourts’ innovative digital initiatives) and it sold at auction for 30% above GV.
So in the current market, auctions (clearly) work. Buyers are happy to do some homework, get their paperwork in order, work out their top dollar bid and strategise their auction room ‘game face’ and opening bids (Top Tip — go in hard and early to scare off the opposition) rather than being drawn into a multi-offer process where they have no idea of the strength of other interest.
It’s safe to say we have done our homework throughout Otago and read the room. Post lockdown, our success rate is 89% sold under the hammer.
Nationally, Harcourts National Auction Manager Aaron Davis says auction numbers are up 63% across the country compared to 2019. Of interest, 18% of auctions are being brought forward from the advertised auction date due to strong early interest (see the note above about being prepared to go early on offers and negotiations).
Thank to Harcourt’s early adoption of technology, live streaming of auctions is part and parcel of how we operate, with bidders able to view and bid on auctions from around the world. That’s hugely important with the level of expat interest in New Zealand property, and (touch wood/fingers crossed) if there are any further lockdowns we will still be running successful auctions for our clients.
Buyers are tapping in to the Harcourts Otago network of properties from around New Zealand (predominantly Auckland) and from expat hotspots around the world. Kiwis want to come home and they want somewhere to live. If they’re not ready to make the move yet, they’re banking property for the future.
Those thinking of selling need to consider that each auction leaves us with cash unconditional buyers who missed out. Those buyers are sitting in our database, ready and willing to buy.