New listings squeeze leading to auction room battles

More homeowners put their properties up for auction during June and July than at any time during the past four years, as a squeeze on new listings left prospective buyers to battle it out in the auction rooms.

Research from property website realestate.co.nz shows auction listings peaked at 1168 in June, and hit 1132 in July - almost double the number advertised on the website in a 'typical month'.

Realestate.co.nz's chief executive Alistair Helm said the trend was most apparent in Auckland, with one in five properties listed during June and July going to auction.

Well over half of all auction listings nationwide were for properties in Auckland last month, he said.

"When listings are in short supply we tend to see a rise in the proportion of properties being marketed as auctions," he said.

The number of houses for sale in Auckland has almost halved since the peak of the property market, and in 16 regions across New Zealand sellers have the upper hand due to a lack of listings.

"That's why we've seen such a spike in auction listings during June and July because the industry was well aware the shortage was coming and they started to advise their sellers their recommendation is to put a property to auction."

Helm said auctions were good for liquidity in the market, but did preclude some buyers.

"It really does benefit those who are cashed up but is hard for those who would like to buy a house but have their own property on the market and therefore can't really go unconditional and can't really afford a deposit," he said.

Helm said he expected the trend for putting properties to auction to continue while listings remained right.

"You have a good steady rise in sales, a pretty weak number of new listings, available inventory going down therefore buyers don't have much to choose from so if they want to buy they are going to have to bid with each other to get what they want.

By Susie Nordqvist | Email Susie

Article published courtesy of NZherald.co.nz

Source: NZ Herald Online

Posted: 5 Aug 2011

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