Auckland’s real estate auctions had something for everyone this month: at the budget end of the market, a studio flat sold under the hammer for $75,000, while at the top of the market, a five-bedroom home in Herne Bay fetched $6.22 million.
What’s clear from OneRoof’s conversations with agents and auctioneers is that the market has definitely turned but that deals are possible when buyers feel the property for sale ticks all of their boxes.
Last month, the share of properties selling by auction in Auckland dropped to 23.4%, the since the post-Covid boom started in June 2020.
Harcourts agent Diego Traglia, who last year listed 200 properties for sale by way of auction, told OneRoof that he still recommends the sales method, despite the drop.
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“Last year 80% sold under the hammer, this year it’s more like 25%. But then another half will sell within 48 hours,” he said.
“But now we’ll go with just a two-week campaign to see if there is cash out there. Cash is king, then we’ll move to a conditional sale.”
Traglia is clear that two types of properties aren’t selling at auction: those whose owners are stuck on 2021 prices and those he diplomatically calls “less than four or five star”.
A five-bedroom renovated house in Sarsfield Street, Herne Bay, sold for $6.22m after competitive bidding. Photo / Supplied
“Unless a property is extremely well priced, the buyers have got options and will gravitate to the four- or five-star house. Not two- or three-star anymore,” he said.
“The reality is for a lot of vendors even though they say ‘we’re not here to give it away’, they need to sell. You could argue with the market that your place is worth $1.6m, but if the buyers see other sellers are accepting $1.4m [for a similar property], that sets the price guide.”
Martin Cooper, managing director of Harcourts Cooper & Co, on Auckland’s North Shore, said vendors who refused to accept the change in the market would be the ones missing out on a sale.
“We’ve had a 20% price increase last year. [The market right now] is like a comfortable old armchair – we're still selling, we’re still comfortable. Someone might have taken away the cushion, so it’s not as comfortable as it was, but it’s still good,” he said.
Buyers who packed Ray White City Apartments’ auction rooms this week were looking for bargains, and were bidding strongly to get them: a studio flat in Rutland Street with a declared reserve of $59,000 went for $75,000; another in White Street, billed as “a guaranteed bargain”, fetched $90,000.
Top price for the franchise this week was $527,000 for a penthouse one-bedroom apartment in Greys Avenue, overlooking Myers Park.
Barfoot & Thompson auctioneer Murray Smith was blunt about the current state of the auction market.
A five-bedroom near-new house in Walton Street, Remuera, sold for $4.43m after passing in at auction for $4.4m. Photo / Supplied
“If vendor says no, quite often they’re wrong. The buyer might increase their offer later [after auction], but it’s conditional on them selling their own house. Then they get nowhere near the price they expected and they all go back to negotiate,” he said.
“The thing with price by negotiation is that nobody knows what it sells for.”
Smith had words of warning for buyers as well: hold off making the purchase and you will get stung by rising mortgage rates.
Ray White chief auctioneer John Bowring said that “2021 is never going to happen again”.
“The market has turned up and told you,” he said.
Bowring said that certain properties still attract 2021-type crowds, pointing to a “like new” four bedroom house in Ngaio Street, Orakei, that attracted seven bidders. “It just went nuts and sold for $2.906m,” he said.
Ray White agent Steve Koerber said clients were learning. A near-new five-bedroom house he marketed on Walton Street, Remuera, got passed in at auction at $4.4m, later selling for another $30,000.
Seven registered bidders pushed the price of a "like new" four bedroom house in Ngaio Street, Orakei, to $2.906m Photo / Supplied
“We had 10 registered bidders, four of them going over $4m. That many bidders should give the winner confidence,” he said, adding that good, modern lock and leave properties are rare so “buyers are like bees to a honeypot.”
Also at the top end of the scale, a five-bedroom house on Sarsfield Street, Herne Bay, marketed by UP Realty agent Patrick McCarthy, fetched $6.22m under the hammer earlier this month. It had a ratings valuation of $6m and sold two-and-a-half years ago for $5.175m, according to OneRoof records.
“We had 45 groups through, with $5m plus budgets, three registered bidders, two of them really competitive,” he said.
“There’s a flight to quality, if it’s well finished and high quality, they’ll buy it. It’s surprising everyone. There’s still a shortage of supply, people see it’s way easier to buy something already done, and there’s still that pent-up demand from lockdown.”
And the best buys for would-be auction buyers?
Barfoot & Thompson auctioneer Marian Tolich plumps for old-style brick and tile ‘granny’ units. The former domain of investors, or grannies, these sound builds, often with a patch of lawn, were good apartment alternatives, she said. “They’re good for first home buyers, in a good location if you don’t want a terrace house or apartment.”
Developer new builds are also good buying, as many are realistic about pricing, keen to get cash for finished stock so they can move on to the next project.
“But don’t think it’s a bargain market, you have to be realistic. You’re not going to pick the market, waiting for it to bottom out, it’s no longer a speculative market or flippers,” Tolich said.
