Harcourts national auctioneer Shane Cortese says the company is pushing to bring auctions more into the mainstream of Wellington's residential market.
The capital city’s preferred sales method has been tender, where sealed offers are made by a certain date, but that’s like making an offer in a dark room, Cortese says.
Auctions, on the other hand, are open and transparent and are like putting the light on: “We’re pretty committed to grow the auction focus and culture down there and that’s going okay.”
Harcourts Wellington City chief executive Marty Ritchie says Wellington’s love affair with tenders could have something to do with the high number of public servants – Parliament is based in Wellington and also many government departments.
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Ritchie says Wellington City is more of a village than sprawling Auckland, where auctions are common, and as a rule public servants don’t like everyone knowing their business.
“They are conservative by nature. Wellington has the lowest debt equity ratio of any major city and it's because we've got all these public servants and they are risk averse.
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“They don't take massive gambles, they don't make massive decisions, you've cracked it when you've paid your mortgage off, they don't go out and own 20 investment properties and that sort of thing.”
There is a place for tenders, he says, such as when buying a fleet of vehicles for the government, but he thinks they are not the best-selling method in real estate.
Harcourts regularly holds auctions in the Wellington region and Ritchie thinks the tide is turning favourably towards them after a drop off following prices plummeting in the capital.
His agents noticed more confidence coming back heading into Christmas and more homes selling under the hammer.
A four-bedroom home on Thornycroft Avenue, in Epuni, Lower Hutt, sold under the hammer for $1.215m. Photo / Supplied
Auctions are usually a faster way to sell, he says. Selling by other methods, such as by tender or deadline treaty, is taking about 61 days on the market – and that’s only for the homes that do sell, whereas, he says, Harcourts' auctions results are at least half that time.
For the end of February the office ran 38 auctions, 40% sold on the day under the hammer, 11% sold after the auction, giving a total was 51% sold.
The average time to sell from that 51% of sales was 26 days: “If you are comparing 26 days with 61 there's a massive difference.”
A property on Thornycroft Avenue, in Epuni, Lower Hutt, which had 70 inspections at open homes, had four bidders on the day, selling above the reserve for $1.215m and in only 21 days.
Ritchie says even if the house doesn’t sell under the hammer, the next step is to look at conditional offers and on average properties are still selling faster than by other sales methods.
Harcourts holds the majority of auctions in greater Wellington, he says, and when properties do sell under the hammer vendors end up with cash unconditional sales and can get on with their plans.
He says making an offer by tender means guesswork as to what someone else might pay then offering more: “I think when you've been on the other side of the fence and you've bought a property, going in completely blind and getting one opportunity to submit an offer is quite horrific.”
With an auction the process is more like being able to reopen the envelope and resubmit offers over and over because people can see what is happening in front of them.
As for Wellingtonians worried about privacy, he says they should not worry because they can be as discreet as they like: “You’re not made to stand up the front on a little pedestal while we auction your property.”
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