In a typical month, around 600 properties come onto the market advertised as auction sales. In the months of June and July this number has spiked to 1,168 and 1,132 respectively – in absolute terms these months have seen the highest recorded looking levels going back over the past 4 years.
This spike is even more significant when viewed against the decline in new listings witnessed this year. As a percentage the number of properties brought to the market in June, it was the highest ever seen at 13% – far outstripping the prior high of 9% back in September / October 2009. July has continued this trend with another month with 13% of new listings being marketed as auctions.
The vast majority of properties marketed as auctions are in the Auckland region – in July, Auckland accounted for 56% of all of the 1,132 auction properties marketed across the country in the month.
In general across all property listing categories, Auckland represents around 24% of the total – it would therefore seem that Auckland is the epicenter of NZ property auctions and in June and July over 1 in 5 of all new listings brought to the market across the Auckland market were auctions, far above any prior period.
Whilst this spike in auction listings is significant; it is important to ground the stats by stating that currently on realestate.co.nz there are 1,378 properties on the market as auctions this compares to just over 48,500 properties for sale across NZ in total on the market – that amounts to less than 3% of all properties currently on the website.
Having made that statement; there is no doubt that there is a very clear correlation between the state of the market in terms of inventory of unsold properties and the proportion of new listings being marketed as auctions. When listings are in short supply, as we are seeing at this time we tend to see a rise in the proportion of properties being marketed as auctions. The last time this happened was in 2009 as seen in the chart below:
The message is clear – the level of new listings coming onto the market over the past 3 to 4 months continues to be lean, this is matched to a steady but significant rise in property sales. Such a situation when combined with falling stock of property for sale places the “power” in the hands of sellers. In these circumstances the real estate agent acting on behalf of the seller is clearly recommending taking the property to auction to encourage those motivated buyers to battle it out in the auction rooms and front lawns to grab their chosen home.
For prospective sellers looking to put their property on the market in the coming couple of months, now would seem to be as good a time as any to get ahead of the game and list that property.
Over the last few months Housing NZ have been selling off many state house properties, almost always by auction so this will have contributed to the increase and it also appears that the banks have finally capitulated and released many more homes as mortgagee auctions in the last eight weeks:
http://www.realestate.co.nz/residential/search/keywords/mortgagee
At least 30% of Barfoots auction sales in Auckland during July were mortgagee auctions. There’s 25 more of them on page G39 and G40 of this mornings NZ Herald liftout alone.
Barfoots have 60 mortgagee sales currently under way on their website (more than ever before) most of them auctions – see http://tinyurl.com/3nayskx
So the spike of auction listings from 9% to 13% of total listings on realestate.co.nz is at least in part explained by the increase in mortgagee auctions and Housing NZ selloff.
Russell
A valuable comment – thanks for highlighting this impact. The last report we provided on mortgagee listings did not show a significant shift http://unconditional.co.nz/blog/no-mysterious-spike-in-mortgagee-sales/ – it will be interesting for us to provide an update on latest mortgagee listings.