Following on from the success of the two previous mass property auctions in April and earlier this month, Allsops (British Auctioneer) and Knight Frank have announced a new round of auctions.
Allsops will put over 100 properties under the hammer in September with Knight Frank following this up with 30/40 properties in October.
Memorably people Q'd around the block to get into Aprils auction in the Shelbourne hotel on the same day as the IMF were here piecing together our bailout.
Both of Allsops auctions have proved to be a great success, with over 90% of the properties being sold on the day. Auctions are efficient ways of selling properties as once a price is agreed, contracts are signed on the day itself. This means that the people bidding either have their mortgage in place in advance, or which is far more likely these days, they have the cash in hand (not literally!).
So where have all these cash buyers been hiding? The property market is depressed and the level of transactions are only a fraction of what they were just 5 short years ago. The purchasers are bargain hunters
The properties being sold are classified as 'distressed assets', they in the main represent repossessed properties that the bank are trying to off load. Banks don't want these properties sitting on their balance sheets and are happy to take whatever they can get, so they set the reserve prices very low.
It has been said that these auctions are a positive thing as they will help us finally find a floor to the property price slide. I disagree. As these are being bought by people with cash and not by your average house hunter looking for a family home, the auctions do not really represent what could be considered normal market conditions. Until the banks reenter the mortgage market in a meaningful way we will not be able to tell how far prices have truly fallen.
FS
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