If you want to buy or sell your house at auction, Gisborne is the place to be.
Despite the Auckland hype, it’s the East Cape that is the top spot for auctions, with over 40 percent of homes sold that way, up from 35 percent the year before. Tenders also grew in the region from 9.3 percent to 10.9 percent.
That’s well ahead of the next highest region, Auckland , where 20.1 percent of properties are sold at auction, down from 24 percent in 2018.
Around the country, some 11 percent of properties sold at auction in August, down from 12 percent the year before.
Start your property search
Karen Raureti, director of Bayleys Gisborne is not surprised that her region is auction central. She says that selling method has been a feature in the town since multiple auctions on one day were introduced by her company back in 1995. She said the two other top players in town were also big auction companies, as both buyers and sellers find it the most efficient way to move property.
“With auctions, it’s a real market,” she says. “Prices achieved have all been well in excess of vendors’ expectations, so if we’d just priced the properties they would have got a lot less. Buyers get prepared for auctions, there’s a commitment to purchase and that’s good for vendors to know.”
Raureti says that auction campaigns have worked at both ends of the price spectrum, with properties between $340,000 and $900,000 selling under the hammer. Getting 50 groups through a property is standard now, she says, and she expects in the popularity of auctions in the still-hot Gisborne market to continue.
The data is from Real Estate Institute of New Zealand. Chief executive Bindi Norwell says: “The number of properties sold at auction over the past year has fallen in all regions bar Gisborne and Otago – two regions which have shown significant price growth over the past year.
“Anecdotally we’re hearing that the auction clearance rates have been increasing over the past few weeks. This is a result of more listings come to market now that we’re heading into the warmer months of the year and also an uplift in confidence particularly after August’s OCR drop.”
Auctions are also popular in Bay of Plenty, with 14.3 percent of properties selling that way. Canterbury, with 11.4 percent of sales at auction this year (down from 12.5 percent 12 months ago) is the only other region where auction sales are over 10 percent.
Around Auckland there’s huge variation between suburbs in the popularity of auctions as a selling method.
Top is North Shore’s Hillcrest, where 47 percent of properties sold under the hammer this year; in Sandringham 46 percent sold this way. Auctions top 40 percent of sales in Greenlane, Beachlands, North Park, Stonefields, Royal Oak, Stonefields and Half Moon Bay, with Birkdale and Hillsborough also making the top ten. These are the so-called ‘ripple suburbs’, the next wave of city-proximate places for buyers priced out of the inner city ring.
Harcourts agent Abbey Davis, whose beat includes Sandringham, Mount Roskill and environs, reckons auctions are the only way to sell now.
“These areas are hot pockets right now. People think it’s affordable, you get really good buying here,” she says. “These were always the poor cousins to Mount Eden, but now they’re the next ones out, there’s lots going on here.”
Davis says the auction buyers are both first home buyers and downsizers getting rid of their pricier places, but keeping a foothold in city in these up and coming suburbs. She says buyers like the transparency of an auction, they can see what other people are offering, and are not flying blind.
Valocity director of valuation innovation James Wilson says that first home buyers are driving a lot of the auction action.
“They’re really active, and quite emotionally fuelled compared to an investor. Auctions work relatively well for that emotion.”
Auctions are low in lifestyle suburbs like Kumeu or Riverhead, in towns that are largely new building developments (Long Bay, Pokeno). But Wilson points out that other suburbs with few or no auctions are those popular with investors – Takanini, Weymouth, Waiuku or Tuakau.
“Investors are very cautious, they want to negotiate hard outside an auction with more facts and figures, they don’t want to play that emotion game.”
Wilson sees good agencies responding to these new-to-auctions first home buyers, switching the time of the auction from mid-week or middle of the day to evenings or weekends, and being much more targeted in their marketing and sales processes.
And, he says, it’s paying off with faster sales and better prices, as buyers, frustrated at the lack of stock and longer searches are prepared to over-bid just to get a place.
“Desperation and emotional buying are a good formula for successful auctions.”
