$1 million-plus Auckland properties in hot demand
Demand for Auckland homes over a million dollars appears as strong as ever and is heading for a new "norm."
Leading residential agent Barfoot and Thompson says the firm had its strongest June in five years, with the average sale price hitting $589,251.
However, the number of listings on its books in June was at the lowest level in about seven years, with new listings falling 19.5% to 1245.
"Demand is outstripping the availability of property ... though it's in line with expectations for the middle months of the year," Barfoot and Thompson chief executive Wendy Alexander says.
The company sold 81 homes for more than $1 million dollars in June, with some selling for $2 million or $3 million.
Ms Alexander would not give specific details. She said the firm had "a massive sale" in June but the new owners wanted a confidentially agreement, preventing disclosure of sale details.
Sellers and buyers seem attracted to the auction or tender process, with 550 of June's 1245 new listings marketed as either auction or tender.
"People keen to get into the market, or sellers, love the finite term of an auction," Ms Alexander says. "And, of course, sellers are motivated because they've invested in the sale process."
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Comments and questions4
"Sellers and buyers seem attracted to the auction or tender process". "People keen to get into the market, or sellers, love the finite term of an auction,"
Buyers have no say in the matter, and I'm sure many would prefer negotiated sale. Sellers and real estate agents like auctions because they can take advantage of the "winners curse", whereby the winner at auction very often has won because they have overpaid.
I agree with you, buyers prefer an asking price and to negotiate, but in the current market competing demand can drive prices higher. However auctions can also serve to beat the vendor down, when market demand is slower, in addition the vendor gets to pay/contribute to advertising, so often the only winner in an auction process is the salespeople, as this process usually makes the vendor more motivated.
The banks will love funding all this imaginary equity and all the people will think they are worth more. Come on nz invest in something other than property.
Tender is the best process. Bidders don't know the other bids and post Tender negotiation can often drive the price up further.
Auction you only get an increment about the 2nd highest price.