One of the Waikato’s leading real estate agencies skipped its weekly auction for the first time in years as the number of properties sold at auction in the region continues to fall.
Hamilton real estate agency Lodge didn’t hold its weekly auction on Wednesday, June 15, due to having no properties scheduled to be sold at it.
Auctions at Hamilton’s other real estate agencies went ahead with just one property put up at Lugton’s auction, two at Harcourts and four at Bayley’s.
The number of properties sold by auction in the Waikato fell to 6.5% last month with just 33 properties sold under the hammer, down from 24.1% in May last year when 179 properties were sold in the auction room, according to the latest REINZ figures.
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The number of properties sold by auction also slipped from April where 8.8% or 44 houses. Nationally 10.9% of sales in May 2022 were by auction.
Lodge managing director Jeremy O’Rourke said this week was the first time in years they hadn’t held a weekly auction.
“We generally auction strongly even right up until the last day before Christmas. But it is just the nature of the market at the moment and the care sales people are taking with their vendors.”
He said the reasons for fewer auctions was because it was much harder for people to buy unconditionally due to the current Credit Contracts and Consumer Finance Act rules, which meant there were less people able to bid on the day.
Sales people were also aware they needed to choose the best method of sale for the seller and it was also a lot harder to find bidders in the first and second home market who could go unconditional.
The properties still selling well at auction included lifestyle properties and those in the higher-end of the market. “But stuff that’s sitting 41.2m and under – which is pretty much the bulk of the market – that's just become harder to transact in terms of auction,” he said.
Stand-out: This luxury home on Waitotara Way, in Whitianga, sold for $6m under the hammer. Photo / Supplied
Lodge still had properties scheduled to be sold at auction for the next three weeks at this stage.
While the best method of sale was dependent on the property, he said properties did need to be priced “sharply” in the current market.
“The market loves two things – the market loves the certainty of the price or the urgency of a deadline,” he said.
“If you don’t price it right, right out of the gate, it’s going to cost you a lot in promotion to get that back in front of people and get them interested.”
Bayleys Waikato, Bay of Plenty and Taranaki director of business development Stephen Shale said the properties selling well in his auction rooms were at the higher end of the market, or “heirloom” properties, and for June so far had an average sales price of $2.3m.
Bayleys was the only agency that sold any properties under the hammer at its Hamilton auctions last week, with a luxury property on Waitotara Way in the exclusive Whitianga Waterways fetching $6m and a rural lifestyle property on Hauraki Road in Turua selling for $1.4m. A third property was also under contract as a result of the auction.
An aerial view of Hamilton. Agents in the city says the CCCFA has made it harder for buyers to get credit. Photo / Getty Images
“That top-end seems to be pretty strong in my view because I guess they are more insulate for the borrowing – if you are 70 years old you are not going to be taking out a mortgage.”
He said a property in the mid-price range, around $800,000, could be harder to sell at auction so a lot of those properties did have prices on them.
“I think the advantage to auction is it’s non-transparent on price so we get to find what the buyers think of it and if the vendors agree they sell and if they don’t agree they carry on,” he said.
“What I’ve seen is owners have been very ready to accept price rises, but probably a little bit slower to accept the pause in price and that’s just getting used to the new market.”
Harcourts Hamilton director Campbell Scott agreed that the auction process helped sell a property even if it didn’t sell under the hammer on auction day.
While a reasonable number of properties were still selling at auction, he said if they didn’t then often a number of conditional buyers ended up making an offer or going in to a multi-offer situation not long after.
The advantages included giving the vendor the opportunity of getting an unconditional pre-auction offer, an unconditional sale on the day and if it didn’t sell at auction, could also help identify an unconditional buyer within three weeks of the auction happening.
Auctions also gave a property a higher profile and with two-and-a-half times more houses for sale than six months ago, vendors needed all the exposure they could get, he said.
