It may sound like an oxymoron, but the latest auction results show that while the number of properties being auctioned is down on a year ago, the number sold has actually increased.
Website interest.co.nz crunched some numbers and looked at auction listings and results for September 2019 in comparison with September 2018. The numbers are interesting – the number of auction properties was down 23% year on year, from 888 in 2018 to 681 in 2019. Yet sales results last month showed an overall sales rate of 55% at auction, compared to 41% the year prior.
Auctions are often used as a method of sale to maximise the sales price through on-the-day buyer competition, and this continues to be an extremely effective method of sale. Fifty nine percent of the auction properties sold last month were achieved prices higher than their rating valuations.
The numbers analysed by interest.co.nz suggest that while demand is similar to levels it was a year ago, fewer listings on the market is reducing the choice of properties for buyers, pushing up competition slightly and resulting in a higher level of sales under the hammer.
What are the benefits of auction?
Auctions are a powerful device in a vendor’s toolkit when selling. Although people may be apprehensive initially about auctions, they certainly have clear benefits. A well-planned and well-executed marketing strategy, usually over a 3 week period, is designed to give maximum exposure and reach to a property.
As the vendor, you are able to set the terms of sale, including the deposit payable and the settlement period.
Unlike properties for sale by price, buyers looking at auction properties have an open mind without a price objection.
With a 4 week turnaround between the start of marketing and the auction itself, auction gives you a finite timeline in which to sell your home. This creates urgency with purchasers to get their finance sorted quickly. Plus if your home has characteristics that are in demand, pre-auction offers can dictate an even faster process.
On auction day itself, a vendor’s biggest asset is the gift of competition, which in turn, can drive price in the right direction – often upwards. Competition and emotion in the auction room can create surprising results. And one of the most compelling reasons to sell by auction is the cash, unconditional sale that is triggered.
Auctions also work exceptionally well when it’s difficult to know where to price a property. Plus, it also pays to remember that even if a property doesn’t sell under the hammer, auction campaigns often lead to a sale shortly afterwards, as some buyers aren’t in a position to buy on auction day. Statistics show that auction properties have a higher chance of selling within 90 days than with other methods of sale.
This is all good news – and food for thought – if you’re thinking of placing your property for sale.