Last Friday’s REA auction at the Shelbourne was hailed by commentators as a disappointment, however, I personally disagree. I was not too optimistic about the prospect of a ‘super auction’ but there was more hammer activity than I had expected. The big disappointment for me (and the buyer contingency present) was the pricing strategy executed on the day. The reserve prices mirrored too closely the AMVs for most properties with no stand-out bargains.
With approx 14 lots withdrawn before auction, 57 properties in total went under the hammer. The auction was very well attended but got off to a disappointing start with just one property selling successfully in the first hour. The new owner of a refurbished Georgian home in County Kilkenny definitely secured a bargain as they faced no opposition to their early bid, €500,000, the stated AMV.
No further properties sold in the following two hours. It was an anti-climatic process of calling lots, inviting offers and withdrawing over the course of 90 seconds. I was personally surprised at the properties that attracted no bidding attention whatsoever. In other cases, where unsuccessful bidding took place, the reserve prices were invariably unrealistic and were at odds with the buying force in the room.
The purpose of the auction was apparently to relieve sellers inspire buyers, in slightly uneven measures, but the general feedback from buyers in the room was that the properties listed (and in general) are still over-valued. I would respectfully question whether in fact the AVMs were 60% below early 2007 prices as publicised.
There were a few success stories on the day; eighty acres of agricultural land at Kinnegad achieved a strong price of €440,000. And, of course, five properties sold in the run up to the auction.
So, will Real Estate Alliance be satisfied with the outcome? With 16 properties sold and €3.9m released for clients, I suspect that they will be, regardless of media reports immediately after the auction.
Finally, I will leave you with the promise of an opportunity… Now would be a great time to take a second look at unsold lots from Friday. Disregard previously quoted reserve prices; the market has spoken on each of these properties, albeit by not saying a word! It’s time to check whether or not the sellers were listening.