A prominent Queenstown developer is at odds with some local real estate agencies over the recent trend of mass auctions.
Developer David Broomfield – who developed Goldfields subdivision and exclusive Closeburn Station – believes large auctions unsettle a fragile market and claims vendors aren’t being sufficiently serviced in the process.
Last month Bayleys auctioned 29 properties in one hit and Hoamz put up 23 properties during two days.
In both cases, no properties sold under the hammer though several sold before and afterwards.
Broomfield: “I was approached to put properties into those auctions and I didn’t for the simple reason that the market’s too fragile.
“It floods the market for that month or two months and it takes two to three months for the market to resettle because you’ve got a perception that’s been exposed to the public that properties aren’t selling or there are too many on the market.”
Auctions, Broomfield suggests, should be reserved for desperate or mortgagee sales, where you can’t determine a property’s value or in a buoyant market like Auckland where buyers feel they’re missing out.
Broomfield also claims mass auctions are a lazy way for agents to secure property – sometimes taking a listing off another firm.
“They’ve got the benefit of the [vendors paying for] advertising, then after the auction they’ve got exclusive rights to sell the property for 30 or 60 days. You’ve got to give a certain amount of service and I’ve heard that some of those properties never had one prospective buyer through.”
In response, Hoamz managing partner Fred Bramwell says: “Basing any campaign results over simply what sells on auction day is very short-sighted.”
Bramwell says auction campaigns comprise three stages – pre-auction, auction day and post-auction.
“One of the advantages of auction campaigns is that [vendors] get good advertising coverage, active buyers through properties and genuine buyer feedback without damaging properties’ prices.”
Bramwell says that of 23 properties auctioned last month, two sold beforehand, another four sold after the auction, including two on the day, and another eight are under negotiation.
“I am confident that we will have over 55 per cent of properties sold in the next few weeks and many of those properties remaining will be realistically pitched to sell in the current market.”
Bramwell’s colleague Brendan Quill believes Broomfield makes some good points – “it does put a bit of an unsettlement into the market”, Quill says.
However, Quill disagrees that auctions are a lazy selling process – and he believes every property is auctionable.
“It’s five to six weeks of intense campaign, bang, bang, bang.”
Bayleys Queenstown owner David Murray expects his firm will sell at least 50 to 70 per cent of the properties offered in last month’s auction.
“I feel sorry for people who don’t understand auctions.
“One, it is the Rolls Royce process of selling property and creating competition and achieving the best price,” Murray says.
“Secondly, to suggest that we, by listing 20 or 30 properties, can skew the market, I’m flattered but don’t agree.
“Those properties were already on the market – all we’re doing is opening the doors for one day and saying, ‘come and have a look’.”
Murray adds: “There is no validity to the fact it locks up property any more than a normal sole agency.”