Auctions frustrating buyers

Wednesday 7 August 2013

It's not just first-hone buyers frustrated by the prevalence of auctions in the Auckland market, says Auckland Property Investors Association president David Whitburn.

By The Landlord

The most recent Real Estate Institute statistics show that 1203 properties sold by auction in June, almost 20% of sales nationwide and more than two-thirds more than sold under the hammer the same time the year before.

But three-quarters of those auction sales were in Auckland.

Almost 40% of the homes sold in the country's biggest city were sold by auction.

Waikato/Bay of Plenty made up another 8.5% of the national total and Canterbury another 8.5%. The remaining 6.7% of auctions were conducted across the rest of the country.

Whitburn said vendors were being encouraged to use auctions to sell their properties because agents were banking on buyers paying an "emotional premium" for properties. "It's not good for investors, looking at the numbers."

He said investors would want certainty so they knew it was worth getting reports such as building inspections done. "Why would you spend $1000 if it's unlikely the deal is going to go through?"

Whitburn said some buyers were getting desperate to purchase and not bothering to do any due diligence - just bidding and hoping for the best. "I don't like seeing that in the market. You've got to do due diligence on every property you buy."

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