Auction Sales Going Going Going in Auckland

Auctions are becoming the preferred means of selling homes in many parts of the Auckland region with more than three out of four transactions in some suburbs in March 2012 being decided by the auctioneer’s cry of “Sold to…”.

In total, Real Estate Institute of New Zealand (REINZ) data shows almost 30% of sales in the region during March 2012 were completed by auction compared to 22% 12 months ago and just 11% five years ago, near the peak of the housing market.

REINZ Chief Executive Helen O’Sullivan says auctions are often a preferred selling method particularly when there is rapid change and uncertainty over values.

“Confidence is returning to the housing market, as indicated by the recent release of the March residential statistics which showed a 25 per cent increase in the volume of sales and a reduction in the number of days from listing to contract date.

“Auctions are becoming the preferred sales method, particularly in higher priced suburbs. In 13 ‘leafy’ suburbs more than 50 per cent of total sales in March were as a result of auctions.”

Blockhouse Bay recorded the largest number of auction sales with almost four out of five sales by auction. Glendowie followed with nearly three out of four sales by way of auction and 11 other suburbs including Epsom, Grey Lynn, Onehunga and St Heliers all had more than 50 per cent of sales in the month achieved by auction. Milford topped the list for the highest percentage of auction sales on the North Shore.

The table below shows the top 20 suburbs in terms of percentage of sales by auction.

13 Auckland suburbs had half or more sales by auction in March 2012. The top 20 list is dominated by suburbs in the former Auckland City filling 14 of the top 20 places with suburbs on the North Shore filling the remaining six places. The highest ranked suburb in the Manukau area comes in at number 24, while the highest ranked suburb in the Waitakere area comes in at number 27.

The data on auction sales shows that auctions tend to be more prevalent in high priced suburbs rather than lower priced suburbs. The suburbs that had 50% or more sales completed by auction during March 2012 recorded a median price of just over $670,000, compared to just $377,000 for suburbs that recorded less than 20% of sales by auction. While the top end of the suburb list is dominated by Auckland City, the suburbs where there were less than 20% of sales by auction is dominated by suburbs in Manukau City and Waitakere City.

The chart above shows the percentage of properties sold by auction in Auckland since 2005 and clearly shows a growing trend. In 2007 on average less than 10% of Auckland sales were completed by auction compared to the strong upward trend seen over the past 12 months (red line). March 2012 saw a new record number of sales completed by auction in Auckland, with 839 sales by this method. This beat the previous high of 611 set in November 2011 by 228 sales.

About The Data

REINZ analysed suburb level data for auction sales in the Auckland region for the month of March 2012. The analysis was restricted to suburbs with more than 15 sales for the month to ensure the results are robust. This provided a dataset of 66 out of a total of 223 suburbs in the Auckland region, representing almost three quarters of all sales in March and almost 80% of all auction sales in March.

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