Property auctions plummet, more homes give prices, and supply continues to boom
Property auctions are becoming less popular and more homes are displaying prices as the shift continues towards a buyers’ market, according to figures from Realestate.co.nz.
The number of auction listing has dropped by over a third (34.3%), while the number of listings that display prices has increased by a quarter, according to figures from Realestate.co.nz.
Meanwhile, the numbers of homes on the market increased 78% year-on-year last month, meaning more choice for buyers.
Realestate.co.nz spokesperson Vanessa Williams said negotiation listings had also become more popular among sellers.
* Wellington a buyer’s market for first time in eight years
* Almost a quarter of property adverts on Realestate.co.nz dropped prices in February
* Asking prices for homes fell in 11 of 19 regions in February as market cools
The shift in selling method reflected buyers feeling less urgency to purchase.
“This decrease in auction listings suggests that sellers and agents are adjusting their sales strategies to meet the cooling market,” said Williams.
The popularity of auctions had increased over the last five years, and boomed under Covid-19, peaking in October.
House prices are widely acknowledged to have been driven during the pandemic by record-low interest rates and the relaxation of loan-to-value ratio restrictions resulted in a market which some experts have said was more driven by FOMO (fear of missing out) and not by market fundamentals, such as supply and demand.
“Auctions harness the power of competition and offer a transparent sale method, particularly when property is in high demand,” said Williams.
“But when there is less competition, for example, when stock levels increase, auctions tend to be less appealing for sellers as they have less control than in a negotiation.”
Williams said the data suggested a “balancing in the market”.
“Covid-19 brought us uncertainty and a property market full of record-breaking prices and stock levels.
“The market looks to be steadying–which will mean more predictability for buyers and sellers alike.”
Success rates of properties under the hammer have also plummeted in recent times, with success rates falling to 18% during the seven days to April 22 at Auckland’s largest real estate agency, Barfoot and Thompson.
Realestate.co.nz chief executive Sarah Wood said the boom in popularity last year was a reflection of an “unprecedented market”.
She said auctions could still serve a seller if they were looking for a cash unconditional situation.
“That allows them to move more quickly,” she said.
“The gap between the numbers of buyers and the number of sellers is starting to close because we have more properties on the market – which we desperately needed.”