Mega auctions are starting to make a comeback with real estate agencies around the country putting together a whole heap of properties in the hope that they will be sold under the hammer on a single day.
These massive auction "galas" or "fiestas" have largely been absent for the past six to 12 months, with auctions sales falling out of favour during the downturn, but with the market starting to pick-up, the big auction extravaganzas are back on menu.
Auckland's Ray White AT Realty is auctioning off 60 properties at its new Manukau auction room at the end of July, and other agencies around the country are also planning similar events targeting certain buyer groups such as first-home buyers.
Ray White AT Realty director Tom Rawson said sellers have been jumping at the chance to have their property in the auction event knowing there will be such a big number of buyers gathered.
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Some have had “deal after deal” fall over on them, he said, and just want an unconditional cash deal.
They initially aimed to have 50 properties at what it’s calling “The Day”, but have ended up with more after sellers jumped at the chance.
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“The thoughts behind the 60 properties if you get five people interested in each property, there are 300 potential people buying property on that day," he said.
“Some of these people, like if you are a property trader, an investor or a developer, just want to know what’s the property and when can I buy it so we send out all these properties and they can buy them on July 25.”
Ray White lead auctioneer Sam Steele said pooling together so many properties ranging from do-ups, investments, entry-level to family homes and even bare sections was a big feat given the current stock shortage. He said it was about three times more than the number of properties called at AT Realty’s weekly auction sessions.
Properties going under the hammer include a house with a fire-damaged sleepout at 26a Gray Avenue in Mangere East, and a four-bedroom, two-bathroom home at 11 Ballyward Close in Dannemora, which is being sold for the first time in 21 years.
“Traditionally July is one of the quietest months of the year for us so that sort of just adds to not only the efforts they’ve put in, but also the lift in activity that we are seeing in the market as well.”
While some of the properties called at these events are new listings, they also help move stock that have been sitting on the market for a while or failed to sell at auction the first time around.
Harcourts national auction manager Shane Cortese said there is nothing wrong with calling an auction twice because a lot can happen in three months and the market can change.
“There’s positivity around, average bidder numbers are coming up – there's no downside to it, just having another go in a new market and obtaining what the price of the property is.”
Cortese said there had been a level of uncertainty where people were holding out but now those people were starting to buy again. He's also noticing an increase in these types of events.
A wide range of properties including this family home at 11 Ballyward Close in Dannemora will be sold in the mega auction. Photo / Supplied
Ray White lead auctioneer Sam Steele said selling 60 properties in one auction event in July was a big achievement. Photo / Supplied
Harcourts Team Group in Wellington held its first auction gala in five years last week, resulting in at least five times as many properties being called compared to a normal auction day.
Of the 32 properties called, eight sold under the hammer, four were under contract immediately after the auction, and another 10 are expected to be snapped within the next two weeks.
Harcourts Team Group chief executive officer Marty Ritchie said: “There's a number of people whose properties have been sitting on the market and they haven’t sold and normally as you and I know it’s just a slight little price realignment issue, it’s not normally an issue with the house.”
Selling a property at the auction also shows buyers that the sellers are serious, he said.
A young couple at the gala bought their first home on Bristol Street in Trentham for $755,000 after fighting off other bidders. “They were absolutely delighted to come out on top and be successful. They had done all their work, they had done all their due diligence, they had everything lined up, so it was just going to be whether it was in their budget or not in their budget.”
Ritchie said the gala created “a bit of fun” during the quieter winter period and the company made it extra special by giving all the sellers flowers, and those whose properties sold got champagne while the buyers also walked away with champagne.
Some of the 32 properties auctioned off as part of Harcourts Team Group's gala last week, which saw eight properties sell under the hammer. Photo / Supplied
Mega auctions are also held to target certain buyer groups like investors, lifestylers and first-home buyers.
Harcourts Gold in Christchurch is putting together about 25 properties to be sold at auction on August 9 that will suit first-home buyers.
Harcourts Gold director and salesperson Cameron Bailey said the event, dubbed the First-Home Buyer Auction Fiesta, is the first one the agency has held in about six months while the market stabilised.
The purpose of these targeted auctions was to get like-minded buyers in a room and give them choices.
“So, they might have two or three properties in the same auction environment they can choose from, so if they miss out on one, they can buy the next one.”
Instead of holding special auction events, Barfoot & Thompson holds 11 to 12 sessions at the same time each week.
Barfoot & Thompson operations manager Vaughan Borcovsky said it helped provide consistency for both sellers and buyers.
The largest session Barfoot & Thompson ever held was during Covid-19 when 52 properties were called in a single session, compared with the 13 properties called this week.
Borcovsky said buyers were coming back to auction rooms and more than 60% of properties were either selling at auction or within a month of being called – double the amount the same time last year.
“We’ve certainly got sellers and buyers very close to each other. A year ago, there was quite a gulf between the two. I think everyone is a little bit more settled, I would suggest, after the indication from the Reserve Bank they are not going to do any further increases.”
Bayleys national auctioneer George Yeoman agreed the stabilising of interest rates had given people a bit more confidence and certainty. However, he said the current shortage of houses for sale was one reason why there may not be too many of these mega auctions happening anytime soon.
