- First-home buyers face more competition in the auction rooms after quiet 2024.
- Auctioneers say preparation, including builders and valuation reports, is key to success.
- More mega auctions are planned, even Wellington is getting in on the act.
Auctions are expected to again be the dominant property sale method in 2025, and they might be an attractive option for first-home buyers seeking greater transparency in the market, auctioneers say.
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Auctioneers from Ray White, Bayleys, Harcourts and Wellington’s Lowe and Co told OneRoof auction rooms in 2025 were unlikely to return to the bear pits that shut out first-home buyers during the post-Covid boom, but they could instead pay off for first-home buyers who do their due diligence and prepare.
Bayley’s Christchurch-based auctioneer and residential sales manager Tina Chamberlain said auctions were a viable option for first-home buyers, but the success depended on their preparation.
She said vendors were now often providing builders reports to reduce upfront costs for buyers and if first-home buyers also had valuations done, they could get approved for finance and have the security of knowing they’re not overpaying for a property.
Ray White auctioneer Sam Steele says the window of opportunity is closing fast. Photo / Fiona Goodall
“First-home buyers can definitely buy at auction. It’s a choice really. They can get their details into the draft auction agreement and the bank can approve them to a certain level to bid on a property.”
She said regional factors did come into play, however.
“In Auckland, first-home buyers know one of the only ways they can buy a home is at auction but in places like Gisborne or regional centres there may be less first-home buyers actively pursuing auctions.”
In Christchurch she said Bayley’s had seen clearance rates of 60% after the last Official Cash Rate cut, and she believes auctions will again be a key strategy for selling properties in 2025.
“People serious about selling and buying are going to use auctions to do it. An auction positions sellers better to understand where the market sees their property and if it doesn’t sell at auction, they can price it accordingly.”
Harcourts national auction manager Shane Cortese said that while auctions can be intimidating for first-time buyers due to inexperience, sellers targeting the demographic can make it easier by providing detailed reports including building reports to aid in financing decisions.
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He told OneRoof first-time buyers had been active at Harcourts auctions in recent months, with the agency enjoying good clearance rates.
“First-home buyers can bid at auction, and they are doing it successfully. It can be a bit daunting but good auction agents and good auctioneers can make it a comfortable environment,” Cortese said.
“Vendors who take their properties to auction and make it easy for people to get into a position to bid are generally having better success because you’re dealing with factual information rather than opinion and hearsay.”
He said the market had corrected, providing better opportunities for first-time buyers, adding that competition from investors wasn’t strong, though that buyer group was beginning to re-enter the market.
“The longer you wait, the less you’re in the house that you may want. If you’re renting over that period, you might have paid $20,000 in rent instead of putting $20,000 towards your mortgage,” he said.
Auctions were also gaining popularity in traditionally tender-heavy markets like Wellington. The transparent process allowing buyers to re-evaluate and bid again, unlike tenders where offers are hidden.
“The beautiful thing about an auction is that you have the opportunity to change your mind ... where you’re dealing with a tender process, you have no idea what anyone else has offered,” Cortese said.
“I sold a property three days ago for $500 more than the other bidder. That generally doesn’t happen in a tender situation.”
David Lowe, of Wellington’s Lowe and Co, said most houses in Wellington were still being sold by tender but for first-home buyers, the open nature of an auction might help them potentially get a better deal.
“With a tender, if it’s a great house, it’s more about what you can afford rather than worrying too much about what you can’t control.”
He said there had been 100% increase in foot traffic through their open homes in the last four months and while activity had increased, prices were not “running away” and good deals were still available.
“Even though there’s been a 100% increase in foot traffic for open homes, we’re not seeing prices running away. The deals are still there to be had,” he said.
Buyers at one of Ray White's mega auctions in South Auckland. Photo / Fiona Goodall
“At an auction, the price will always be dictated to a large extent by the underbidder, but you can see where the market is and be confident you are not paying more than the market.”
For emotionally stable buyers, auctions can offer clarity and potentially better deals. “Going along to an auction and seeing where a property gets to can help you stick to your guns on value,” he said.
Ray White head auctioneer Sam Steele said he had seen a “noticeable improvement” in buyer activity and listings through the end of 2024 and the momentum was expected to continue in 2025.
Ray White was planning several mega auctions in early 2025, with up to 40 homes on the block at one time.
“We’ve got a number of mega auction events lined up for early 2025 where we’re talking about having 30 or 40 properties at them.”
He said first-home buyers were active and motivated, spurred by the potential for rising interest rates and a narrowing window of opportunity and he was seeing more first-home buyers having success buying at auction.
“The vast majority of first-home buyers understand that with interest rates going down, it’s likely the market’s going to improve, and their window of opportunity is starting to close.”
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