Investor opportunities at auctions as sellers moderate expectations

The first two months of the year have seen a 74 per cent rise in the number of lots offered at property auctions, compared to the same period of 2022.

The figure - from the Essential Information Group - is used in the latest market update from Propertymark’s National Association of Valuers and Auctioneers division. 

My Auction reports a 60 per cent sale rate, with a higher percentage of lots actually sold before and after the auction than on the day itself. A Propertymark spokesperson says this is ultimately due to the overpricing of properties, and buyers having more control over the market.

NAVA Propertymark’s advisory panel member Richard Worrall says he is seeing much of the same from his own Network Auctions.

“Buyers are being cautious” he says. “If they are not 100 per cent they will wait until it is cheaper. They have the ability to do this at the moment, as we have so much stock, but we are only seeing a small percentage of that selling on auction day. Buyers are also being picky, as there seems to be less urgency in people needing to buy.”

At its latest auction Network Auctions says it had to work with sellers to ensure their guide prices reflected the market, before the bids were sought. 

“We had to get reserve prices right down, we wanted to get the right results on the day. We are seeing a lot of … sellers overpricing their properties as they want to sell at a price they would’ve possibly gotten last year. We are trying really hard to manage those expectations.”

Network auctions sold 68 per cent of their stock on the day and since then, five more lots have been sold, bringing the auction house’s total figure up to 88 per cent.

NAVA Propertymark advisory panel member and EIG Director, David Leary, says he doesn’t think there is going to be a momentous transition back into in-room auctions anytime soon in the property sector.

“I know auctioneers and buyers sometimes miss the buzz of an in-room auction, but doing it online is so much more accessible. Auctioneers and buyers are able to be in the location of their own choice, anywhere in the world, rather than in a lot of cases, travelling for hours when they wish to attend an auction” Leary says.

Propertymark also recently conducted a survey, which showed that online auctions remain the most popular since the pandemic. However, members told the trade body that they are grappling with the issue of returning to ‘in-room’ auctions, which is also reflected in the decreasing popularity indicated in EIG’s data.

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