ONWARDS AND UPWARDS FOR AUCTIONS IN 2014!
14 January 2014It is hard to believe that only a year ago, pundits were predicting continuing negative economic growth and a double-dip recession. Then along come economic growth forecasts of 2.4%, steadily declining unemployment figures and signs that property prices have finally bottomed out and actually rising in some regions. Certainly, as 2013 ended and we held our final auction of the year, we could see signs of renewed confidence in the market with prospective bidders filling the auction room to capacity and several lots selling for substantially more than their maximum reserve prices.
This particular auction was our largest to date featuring 48 lots and we achieved a sales rate of over 94% on the day. In general, we estimate that over £15 million worth of property was sold at auction in Northern Ireland during 2013. This would have been inconceivable only two years ago with most people adhering to the traditional means of buying and selling property, be it commercial or residential. From virtually a standing still position, auctions have become an integral part of the local property market.
One notable emerging trend during 2013 was the level of overseas enquiries from mainly “ex-pats” attracted by the double-digit yields of properties locally and who perhaps aspire to return to these shore in the future.
Initially, the bulk of our lots were residential properties, but now we are seeing a more even split between residential, commercial and development land. Our last auction featured more city centre and secondary office stock than previous events while residential land within Greater Belfast is sought after following the re-emergence of homebuyers.
Although average lot sizes remain static, values appear to be rising. In June 2013, we sold a detached house on a development in Portadown for £63,000. Five months later, a semi-detached house in the same development fetched £71,000. And prior to auction, we sold an office floor in Causeway Tower, in Belfast city centre for over 50% of its maximum reserve of £150,000.
Rising prices, and we must stress that these are modest increases, suggest that people acknowledge the potential value of auction purchases and are afraid of missing out. Indeed, we are seeing repeat buyers coming to our auctions, which would support this theory. Considering that we sold a three-storey office building on Malone Avenue for £80,000, which would have been valued at around £400,000 in 2007, it is evident that property now offers real value for money compared to other asset classes.
The actual process of buying and selling at auction is comparatively straightforward offering the benefits of transparency coupled with transactional speed and efficiency. Unlike other auction houses, we have never charged a buyer’s fee, which in some cases can be around £300 and sometimes 1% of the sale price, a hefty additional expense, which the buyer is actually not obliged to pay!
It certainly looks as if affordability and market confidence have returned to the market and most professionals within the property market are quietly confident that relative stability and normality are now evident based upon results achieved during the last twelve months. The volume of transactions has increased greatly since 2012 and competitive bidding is now the norm for most sales, giving us reason to look forward to 2014 and our next auction on the 21st of March with cautious optimism.