Hauraki Herald

Will slower market limit auctions?

House auctions are popular in some regions, but one property analyst says a slower market could change that. Miriam Bell reports.

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The use of auctions to sell homes has surged in popularity in recent years, but one property analyst says things could be about to change.

When prices are changing quickly, or when there is a lot of competitio­n in the market, real estate salespeopl­e will often suggest an auction to maximise the price a seller can get for a property.

In December, 31.4 per cent of properties nationwide were sold by auction, the most recent Real Estate Institute figures show. In contrast, 26.4 per cent of sales were by auction in December 2020.

Gisborne had the highest percentage of auctions, with 53.4 per cent. In the Auckland region, 48.9 per cent of properties sold by auction.

Canterbury and Northland also had their highest percentage of auction sales since records began, with 42.6 per cent and

27.9 per cent respective­ly.

But Homes.co.nz chief data scientist Tom Lintern said the market was in transition­al mode and was moving to favour buyers more.

In a slower market, there were fewer buyers and less competitio­n, which meant auctions might not be as effective a sale method as they were in a booming market, he said.

A Homes.co.nz analysis of the listings on its website last week showed auctions were still particular­ly prevalent in Gisborne and Tauranga.

In Gisborne 49 per cent of homes were listed for sale by auction, and in Tauranga, 34 per cent were.

Auction listings in Auckland, Christchur­ch and Taupō were also in double-digits, at 16 per cent, 11 per cent and 19 per cent respective­ly

In contrast, less than 1 per cent of the Wellington homes listedwere going to auction. Selling by tender was the dominantme­thod in the region.

‘‘With the market changing and economic headwinds at play,

Harcourts managing director

should that change the way the industry sells properties? It might be time to think about mixing things up more and trying different sales methods.’’

Quotable Value general manager David Nagel has said valuers around the country had noticed a falling off in auction attendance and more properties being passed in last month.

Real Estate Institute acting chief executive Rowan Dixon said relatively moderate auction room activity had been expected last month, with numbers increasing this month and the next.

Feedback from some regions did suggest auction rooms were quieter last month, with fewer sales by auction in many, he said.

‘‘In amarket where there is less demand, you would expect competitio­n to lessen, which sometimes can lead to buyers sitting back and preferring to negotiate on a conditiona­l basis outside the auction room.’’

But in a less competitiv­e market, auctions were still a good way to sell a property, Dixon said.

‘‘An auction takes price out of the equation, relying on those in the room to set the value. Working with their agent, sellers can assess whether it is the right option for them.’’

Harcourts managing director Bryan Thomson said there might be fewer properties selling under the hammer now, but there was still a high number of auction sales.

The market had been slower, but that was off the back of the best year in living memory, he said.

‘‘It is also very early in the year and many people in the industry are only now moving out of holiday mode, which means it is too early to suggest how auctions might be trending.’’

But whether itwas a hot market, or a slower market, auctions still appealed to people, he said.

‘‘Despite what you hear, people actually like auctions because the process is transparen­t, and they get good results. Auctions won’t be dropping out of the picture any time soon.’’

When the market was at its peak last year, auctions attracted some negative attention asmany first-home buyers found the system and requiremen­ts involved made it hard for them to buy at auctions.

Some househunte­rs said they felt buyers were deliberate­ly being put under unfair pressure as auctions were increasing­ly used to sell property.

And one financial adviser called for property auctions to be more tightly regulated or banned because they

‘‘crucified’’ first-home buyers.

 ?? ABIGAIL DOUGHERTY/STUFF ?? Auctions have become popular as a sales method, particular­ly in Gisborne and Auckland.
ABIGAIL DOUGHERTY/STUFF Auctions have become popular as a sales method, particular­ly in Gisborne and Auckland.
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