First-home buyers drive price of Glen Eden home to $950,000

As the share of property sales sold under the hammer continues to slump, agents say there are bright spots in Auckland’s auction market.

The “unicorn” houses still commanding multiple bidders and selling for prices in excess of agents’ appraisals have two things in common – exceptional presentation and quality (at whatever the price point), and realistic vendors.

OneRoof analysis of auction sales in the city in the first two weeks of June points to a clearance rate of 29%.

However, the analysis excludes some 95 properties that did not have published sales results, an increasing phenomenon as buyers negotiate prices in backroom deals or vendors accept post-auction conditional offers.

Barfoot & Thompson agent Ying Li Howe, who had one of the three properties out of 23 that sold at the company’s auctions on Tuesday, said that having five registered bidders for a three-bedroom house on Glengarry Road, in Glen Eden, was “amazing” in today’s market.

The immaculately presented property appealed to first-home buyers who no longer want do-ups, the agent said. Photo / Supplied

Four of the bidders, all first-home buyers, participated in the auction, which opened below CV at $800,000 but rapidly escalated to $920,000, before pausing for negotiation. After coming back to the auction room at $940,000, the house was on the market and sold at $950,000 – $100,000 above CV.

“The vendor had presented their property very, very well. It was double glazed, had air conditioning and was very stylish. We’d appraised it for $950,000 to $1m,” Howe said.

“Today’s first-home buyer doesn’t want a do-up, their definition is different from 15 years ago. My vendors are movers, so they’re selling and buying into their next home in the same market.”

In the same auction, Barfoot & Thomson agent Chris Saldanha had a three-bedroom house on Loughanure Place, Massey, sell at its pre-auction offer of $810,000. The vendors of the tidy house, which had a CV of $840,000, accepted a pre-auction offer after just two weeks on the market.

A three-bedroom house on Loughanure Place, Massey, sold for $810,000 after a pre-auction offer. Photo / Supplied

Barfoot & Thompson auctioneer Murray Smith said that in the wake of reports of lower success rates and properties passing in, auctioneers and agents were having to help vendors deal with the bad news. He said the news focused on auctions because they were so visible.

“If you look at other methods – deadline private treaty, price by negotiation, priced – you’ve still got a conditional sale.

“Conditional sales are not good in the long run, a conditional sale means you’ve just ‘bought’ the buyers’ issues,” he said, citing recent cases where vendors had passed on unconditional auction bids, only to find themselves accepting a lower price when the later conditional buyers couldn’t sell their place at the price they’d expected, or couldn’t get finance, and came back to negotiate a lower price.

“Auctions cut out the conditional buyers. Sometimes I say ‘are [conditional] sales worth it?’,” he said.

Smith said that some vendors who are avoiding auctions to ‘save face’ – to keep the sale price a secret or not have the embarrassment of passing in – are missing out on buyers.

“Buyers need deadlines, or they’re resisting making decisions.”

Bayleys agent Blair Haddow is confident in auction sales, particularly for properties expecting more than $3 million.

A renovated three-bedroom home on Vermont Street, Ponsonby, had an offer after one day on the market and goes to auction today. Photo / Supplied

“Buyers below $3m need to jump through a whole lot of hoops, they’re not cash unconditional, whereas the $4m-plus buyers are more capitalised, they can tell the bank what they want,” Haddow said.

“I recommend to go to auction, it’s still a good process. Even if you don’t sell, it still shows who is in the market.”

Haddow said a property he and fellow Bayleys agent John Wills are bringing to auction at 74 Vermont Street, Ponsonby, shows how really good properties still attract buyers.

“It was on the market last Thursday, by that night we had accepted a pre-auction offer and it will be sold less than a week later. We’ve had nine more people through and there will be three people bidding,” Haddow told OneRoof.

The three-to-four-bedroom house on a 410sqm section was fully refurbished after the vendors paid $3.2m for it just two years ago, and features a swimming pool, spa and sauna, outdoor fireplace and cabana, and high-end flooring, kitchen and bathrooms.

“It just shows good properties attract buyers, it’s buoyant” said Haddow, who expects the sale price to be well into the high-$3m.

Last month OneRoof reported that sales under the hammer were also picking up in the city apartment market, as investors return looking for bargains while landlords quit their rental properties to tidy up their portfolios.

Real Estate Institute of New Zealand figures show that sales by auction last month in Auckland had dropped to just 17.6% of sales, down from 44.5% in May last year. Nationwide properties sold under the hammer just 10.9% of May’s sales compared to 14.6% of April’s sales. The year before 28.2% of properties around the country sold by auction.

REINZ chief executive Jen Baird acknowledged new lending regulations made it tough for buyers to go unconditional for an auction, but said agents reported more sales made in the few days after an auction to conditional buyers.

“We continue to see serious buyers attend. Auctions are a transparent way to evaluate the market value of a property, and while a home may not sell on the day, they generate interest and open the sale up for conditional buyers,” she said.