Otago Property Investors Association Inc

03 477 6220

otago@nzpif.org.nz

News & Updates

Recent updates

17-10-2011

Auctions increase in popularity - but have potential to hammer investors’

Landlords.co.nz

Property investors are back in the auction rooms, according to Barfoot & Thompson auction manager Tim Carter.

"The guys and girls that we used to see on a regular basis - then they went away from a little while - are coming back now," he said.
 
"Whether it's an investor looking for a return or to develop, we're seeing those people come back in again for sure."
 
Carter was speaking in the wake of a number of housing market reports which noted an increase in auction activity.
 
Harcourts October MarketWatch reported that in four out of five regions auction sales had risen, up 150.9% on September in Christchurch and 27.7% higher in the northern North Island.
 
The BNZ-REINZ Residential Market Survey for October also reported an increase in auction sales, with a net 13.4% of agents responding to the survey saying they had seen auction rates rise.
 
For Carter, the rise in auction activity has been going on since May this year.
 
"Last year we listed just over 4,000 auctions and between the beginning of the year and now, if you compare it from this time last January to now and from January to this year we're up about 600."
 
He said that over this year around 40% of total listings had been auctions, "a huge difference."
 
"A couple of years ago we'd probably be running 25%, high 20's, but this year it's about 40% of the business - a significant increase even though listings for the company have been down slightly from last year."
 
Carter cites the success of auction clearing rates for their growing popularity.
 
"We've been getting some very, very good prices either prior to auction or on the auction day and the clearance rate of property selling is up too, that's around 80% at the moment."
 
However, for Auckland Property Investors Association president David Whitburn, the auction route isn't necessarily the best option for the investor.
 
"Investors have to value their time, and quite often if properties are well presented and well marketed, they'll go at quite a good price," he said.
 
He said one of his investment mentoring clients was hoping to secure a Remuera property at auction for $550,000 only to see the property eventually sell for $714,000.
 
Whitburn also had a cautionary tale for those looking to mortgagee auctions, citing one experience when a property bought at auction was purposely damaged by the prior occupants.
 
"You've got to make sure that's [the property] insured, you've got to go and change locks and things like that because you might find the kitchen floorboards are dug out and there's a pit in there," he said.
 
"One I saw in west Auckland, they had pulled up the kitchen floor and between the joists they had a form of Samoan cooking - like a Maori hangi."

Tags: david whitburn - auction - tim carter - marketwatch

Source: Landlords.co.nz

comments powered by Disqus