I ventured to Cork this morning to attend the Gmac so-called distressed property auction. I did not have particularly high hopes for the day, certainly not a repeat of the Allsops Space auction success in April, however, I did expect a reasonable number of sales.
The auction itself was a dreary affair. There was very little enthusiasm from the Gmac staff, the bidders in attendance and crucially, from the auctioneer tasked with parting potential buyers from their cash.
Of the 65 lots offered, only 2 managed to sell. Lot number 56, a 10 acre site at Tullig, Leap, Skibbereen, County Cork sold for €69,000, slightly below its €75,000 reserve. Lot number 27, another site, just one area at Dun Chaoin in County Kerry achieved €26,000, just €1,000 above its €25,000 reserve (originally listed at €20,000).
There was other bidding that failed to secure the properties, but nothing noteworthy. The auction consisted of 20 sites but there was little appetite for these, in fact, the two that did sell were lucky to do so.
The properties were mainly suitable for home buyers, unfortunately it was mainly investors in the room! Few of the listed properties would be capable of generating any sort of reasonable yield for investors. There were many houses that might have appealed to home buyers and first time buyers in particular but the mortgage lenders failed to support home buyers in their auction attempts. This is something that will need to change, and quickly.
I expect to hear reports of post auction sales and these should be quite positive but unfortunately, we will never find out the real prices achieved.
Gmac cleverly adopted the UK max reserve model and then cheated on the day by increasing the reserve prices in some instances and selling at least one property in advance of the auction – not good practices and generated a certain amount of bad will in the room.
There were a few highlights on the day for Buyers Broker. I got to meet lots of potential buyers and gauge the level of interest in the market generally. Doing an interview with TV3 in my bare feet was particularly good fun! Most importantly, we learned that despite a phenomenal auction by Allsops Space in April, Munster buyers have not forgiven the market. It will be interesting to see what happens at the next big auction on 7 July in Dublin.
I would love to hear any comments or feedback from buyers – what will today mean for the upcoming Allsop Space auction on July 7?