Sharp rise in auctions
Few sellers and more home buyers are fuelling a rise in house auctions, real estate commentators say.
Christchurch firm Harcourts Grenadier one of the country's largest real estate franchises took a record 80 auction bookings last month. That was eight more than their previous record, set in October last year, and more than twice the average for this time of the year.
Given the property market normally slowed down in winter, the high number of auction listings was "extraordinary", Harcourts Grenadier auction manager Roger Dawson said.
"In these tougher economic times, people want to see quick action on their property. Auctions sell properties three to four times more quickly than normal methods in the first six weeks on the market."
Dawson said more than half of auction properties were selling under the hammer, with another 20 per cent sold within a week of the auction.
Auction numbers were not being boosted by mortgagee sales, with those constant for the past 18 months, he said.
Real Estate Institute president Mike Elford said auctions were "the way of the future" and a good way to market properties. Listings were at a premium throughout the country, which often prompted people to try to sell at auction, Elford said.
"You get buyers and you tend to find out exactly where the market is."
Private treaty remained the dominant way properties were sold, but auctions were taking up a significant share of the market, Elford said.
TradeMe head of property Brendon Skipper confirmed the trend of falling listings and increased buyer interest. The website had seen record numbers of email inquiries and traffic in recent months.
"In a market where there is a shortage of listings, auctions tend to get more momentum because the more demand there is for listings the better auctions can actually do."
Listing numbers had dropped 9 per cent in Canterbury in June. Skipper felt the housing market was slowly shifting to favour sellers, but only if vendors had sensible expectations of what their properties could fetch.
Dawson said people fearing they might lose their jobs had resulted in some owners holding on to their properties.
"What this has done is boost demand for the stock we have to offer ... this demand is only going to intensify when you consider the dramatic fall in new homes being built and the lift in migration numbers."
Professor Bob Hargreaves, director of the Massey University's real estate analysis unit, said when markets were uncertain whether they had reached rock bottom, agents would often use auctions to establish a base price level.