The number of properties selling under the hammer is slowly creeping back up in Auckland – and it’s a trend auctioneers expect to start spreading to other parts of the country.
More properties were sold by auction in Auckland than in any other region last month, according to data from the Real Estate Institute of New Zealand. Auctions represented 18% or 325 of 1793 of all property sales – a slight lift on both the previous month and May 2022 when auctions made up 16% and 17% of all sales respectively.
The lift in Auckland comes as the number of properties sold at auction around the rest of the country continues to slide, with 6.2% of properties selling under the hammer outside of Auckland in May 2023, compared with 6.4% the previous month and 7.8% year-on-year.
Last week a four-bedroom, two-bathroom fully renovated home on Pine Road, in Orewa, on Auckland's northern fringes, sold under the hammer for $1.515 million – $65,000 above the reserve.
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Another four-bedroom, two-bathroom home with sea views on Hauraki Road, on Waiheke Island, attracted three registered bidders and sold for $1.56m.
Auctioneers told OneRoof they had noticed more buzz in their auction rooms in the last six weeks, especially in Northland and Auckland, with buyers noticeably more confident.
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Harcourts national auction manager Shane Cortese said there appeared to be a change in attitude from buyers, particularly in Auckland, who believe now is a good time to buy at auction and beat the conditional buyers.
In February and March, properties may have attracted only one bidder or no bidders at all, but in the last few weeks the number of registered bidders per auction increased to as many as six.
“People are coming out and getting themselves into a position to bid unconditionally,” he said. “Confidence is starting to come back in the purchase area.”
Harcourts Orewa salesperson Ben Gibson, who sold the Pine Road property, said the owners were almost in tears when the hammer came down. “It was an absolute humdinger and the price achieved, no one could believe it.”
Gibson said the property was only on the market for two days before the vendors accepted a pre-auction offer, with the property selling at auction four days later.
He believed the result was due to good marketing and how well-presented and well-styled the home was. “They had just made it into what their dream home was really, but they ended up wanting another project.”
A four-bedroom, two-bathroom property on Hauraki Road on Waiheke Island sold at auction last week for $1.56m. Photo / Supplied
Auction action at Ray White's Mount Eden office. Photo / Supplied
New Zealand Sotheby’s International Realty Auckland and Waiheke managing director Chris Jones – whose company sold the Hauraki Road house – said his agents were seeing an upswing in the number of properties going to auction.
“I think everyone, generally speaking, tends to understand it’s a really, really good way to sell and good way to buy.”
He said the increase could also be due to people thinking the market has hit the bottom, which may be motivating them to get into the auction room and buy.
Ray White lead auctioneer Sam Steele said Auckland was often the first market to move before it slowly filters down to the regions.
“There is positivity back in the Auckland market,” he said.
“We’ve definitely seen first-home buyers come back into the market, and I think that’s because they see with where the market is today that there is an opportunity for them that may not have been there this time last year.”
Ray White’s national auction success rate in May was above 50% for the first time in 18 months and in Auckland it was even higher with 56% of properties called at auction selling under the hammer.
Bayleys national auctioneer George Yeoman said the slow, but noticeable increase in auction attendance could be due to having more stability around interest rates, and ongoing commentary that property prices may have bottomed out.
In the last month, he has called more pre-auction offers than in the previous 12 months combined and said that was one of the first signs the market ramping about 36 months ago. The majority of those brought-forward auctions have been in Northland and Auckland.
“That was always a really good barometer of what was happening in the market and reflects, I think, probably a change from fear overpaying to fear of missing out again.”
Ray White lead auctioneer Sam Steele: “We’ve definitely seen first-home buyers come back into the market." Photo / Fiona Goodall
Auctions are also becoming more popular in Wellington – albeit from its very low baseline – as some agencies are moving away from the traditional tender method and using auctions more.
Some 3.5% of all Wellington properties sold last month were at auction, up from 2.5% in April and just 1.3% in May 2022.
Amanda Stevens, business manager for Ben Stevens & the Team at Ray White, said they started using auctions this year as a way of giving buyers transparency and reassurance that they were not overpaying.
“The upside of the process has been the ability to create competition, even in a flat market, and provide confidence to vendors that they are not underselling their biggest asset.”
Stevens said their experience and success with auctions in 2023 had far outstripped any other method and she expects the number of auctions in Wellington to continue to rise.
Northland and Bay of Plenty also saw the proportion of properties sold by auction pick up slightly in May compared to April, but it was still lower than the same period a year ago.
Whereas in Waikato, Nelson, and Canterbury, the percentage of properties sold by auction continues to fall compared to both the previous month and year.
Canterbury’s response to the market downturn has been delayed compared with other parts of the country and the number of properties sold at auction continues to slide. Auctions made up 12.9% of all property sales, down from 14.1% month-on-month and 17.4% year-on-year.
Steele said the Christchurch market had changed, but just not as much as other cities like Auckland.
“It’s usually very steady and while there are fluctuations, they are not as dramatic as what they see in some other regions.”
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