Auctioneers are reporting much busier auction rooms with an expectation that will remain the case right up to Christmas.
Sam Steele, Ray White’s lead auctioneer, said last year was busy with numbers up 25% on the year before, and this year was tracking to be over that again.
“Our auctions for the rest of November and December are extremely busy nationwide, which is really positive. I think a lot of people are trying to capture the fact there’s some positivity in the market.”
Auctions were performing well not just in Auckland but in Christchurch, Gisborne, and Tauranga, and even Wellington, where the tender process is the default selling method.
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Steele said clearance rates had noticeably increased in the last month with circa 60% around the country.
“If we looked at that this time last year, it was closer to the 40-45% mark.”
While transaction numbers had picked up, prices had as well on a case-by-case basis.
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“It’s probably not as dramatic as the actual number turnover but it’s a number we believe will continue to climb and climb and climb – I think we’re right at the starting point of a market that’s going to get very strong.”
On auction day in Manukau last week, 75% of properties sold under the hammer and for good money, from do-ups to development properties.
He could not disclose the prices paid for development sites but said good sums were fetched for Papatoetoe sites on Wallace Road, and on Cambridge Terrace.
Marian Tolich, an auctioneer for Barfoot & Thompson in Auckland, said the market was much more back to normal with the odd “wow” sale and a lot of bread-and-butter sales.
Last year, the election interrupted the usual flow of auctions but this year the market had picked up again heading into Christmas, with some people looking at listing now with New Year auctions in mind.
Agents were reporting not huge numbers through open homes but that those who did attend were real buyers with their loans lined up and ducks in a row.
That was reflected in the clearance rate at auctions, which were in the 60s rather than last year’s when they were in the 30s.
“When the market is hot, it’s like an entertainment almost to spend the weekend going to open homes – now it’s more measured, better quality, if you like, in terms of people who are really wanting to buy.”
Tolich has noticed developers back in the market rather than investors, saying there had been so many development sites sold already in the south of the city they were turning to places like West Auckland
“Definitely my feeling is a lot more positivity, whether it’s the interest rate, the inflation, who knows, but it just does not seem as dire as it was a year ago so that’s good news.”
Developers are back in the game, with this South Auckland home selling for a good sum under the hammer last week. Photo / Supplied
In Christchurch, Harcourts auctioneer Mark Morrison is also expecting a busy pre-Christmas in the auction room.
“It’s busy, busy – lots of stock coming on, lots of listings coming onto the market at the moment.”
The Christchurch market did not have the same extreme highs and lows of Auckland but was following the slower winter months with an uptake in listings, and drops in the OCR and interest rates gave people a reason to get going again.
Clearance rates have remained strong, sitting at over 80% for properties sold under the hammer or cleared soon after.
Morrison had noticed a “massive appetite” in Christchurch for single level, post-earthquake constructed properties, saying they appealed to the downsizer market.
“It’s like, there’s not enough of those homes. When they come to the market they invariably do pretty well.”
Barfoot & Thompson auctioneer Marian Tolich: "It just does not seem as dire as it was a year ago." Photo / Fiona Goodall
In Wellington, Darryl Harper, team group auction manager for Harcourts Lower Hutt, said auctions were still slow to take off in a city that preferred the tender process, which he said was a spill-over from a culture where the Government, which is based in Wellington, tendered for “everything”.
But auctions were still going well with 71% of auctions called in the last three months selling – that was a higher rate than other methods of selling , including tender, he said.
“There is still a lot of cash out there. The auction process flushes out cash and then the owners get the opportunity to make a decision on the real money.”
Auctions were transparent, unlike tenders, where people could see their competition, he said.
“The other beautiful thing is that the owners don’t have to guess the price because they are in there and they can see where the money is as well.”
Morrison said he had noticed more investors in auction rooms, and also more observers – buyers and sellers wanting to know more about the auction process.
That was a positive sign, indicating people were interested in transacting in the near-term.
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