Diana Clement: Going, going, gone to mega auctions

Photo / Nigel Marple

Love 'em or loathe 'em, auctions are becoming increasingly popular with property vendors and one agency - Ray White (Goodwin Realty Group) - is taking it a step further with an "auction spectacular".

This follows successful mega-auction days in Surfer's Paradise and other parts of Australia. Simon Short, group manager for the Goodwin Realty Group, says that as many as 130 properties are sold on one day at the Surfer's Paradise auction, which the Australian Financial Review uses as a "litmus test" of the state of the market. "It is eight hours of non-stop auctions and up to 1200 people turn up. That is where we would like to take this in New Zealand," says Short, who worked in Surfers Paradise for Ray White before taking up his present role here.

This year, more than 30 properties will be auctioned at Ray White's February 24 event at Eden Park.

The more prospective bidders in the audience the better, says Short. "There's a far greater presence from the crowd and it gives the auctioneer the opportunity to work the floor far greater and push the market up."

He says such large-scale auctions generate more interest in properties and lower advertising costs for the vendors.

Over time the auction market is changing. Barfoot & Thompson is seeing a move from on-site auctions to auctions in rooms, says Tim Carter, the company's auction manager and auctioneer. "The biggest plus of rooms is the control factor."

The rooms are purpose-built for real estate auctions and have audio-visual equipment which can be used to advantage by the auctioneer. In addition, there are viewing rooms at the rear, enabling vendors to watch the auction rather than being tucked away in a back room when the auction is held on site. Another reason for holding auctions in rooms is that some vendors don't like the neighbours turning up. Conversely, the lack of parking at a city venue or the timing of an auction on a weekday in rooms might put off potential bidders. One misguided fear of vendors, says Carter, is that there will be a time restraint with auctions in rooms. "If we can see there is going to be a result we will keep working on and on," he says.

Barfoot & Thompson has a team of auctioneers and staff at the sales to give buyers one-to-one attention during the bidding process. "A lot of the time auctions might get to a certain level on the day and are pushed over the finishing line by the fact that we have some very good negotiators in the room," says Carter. As well as running auctions in the central city, Barfoot & Thompson has rooms in Manukau and the North Shore.

Harcourts national auctions manager Richard Valintine says buyers and sellers accept the auction process much more easily than they did in the past thanks to:

• The transparency of the buying process, with buyers able to see their opposition and vendors getting cash unconditional sales.

• The REINZ auction code of practice, which can be found at
www.reinz.co.nz/reinz/

• The fact that they've seen auctions in action on reality TV shows and have a better idea of how they work.

Valintine says real estate agencies have a responsibility to educate the public about auctions and work with potential buyers to overcome hurdles such as settlement dates or warranties.

Campbell Dunoon, national auctioneer for Bayleys Realty Group, says his company holds more than 2000 auctions a year in New Zealand, about 25 per cent of total turnover. In the old days, lower-end properties were auctioned. Nowadays, there is no discrimination, says Dunoon. "I sold Daniel Vettori a house under hammer and about three months later he sold his house [through Bayleys] at auction." These days, mortgagee auctions are a reasonably minor part of the business.