Firesale yields no flame and very little smoke: REA Auction in the Shelbourne

The room was packed and there was plenty of property for sale today at the Real Estate Alliance national property auction, however,  it seems the crowd was more curious than courageous [likely a good position to take!], and the over-riding theme was definitely that played by the word ‘withdrawn’. Of the 71 lots on offer about twenty were taken out of the auction in advance, and the majority of those that remained were attracting little interest and not getting anywhere near the reserve prices quoted.

In the time spent there we only saw a single property reach the AMV (advised minimum value) and subsequently sell. This is the bit that annoys me is this: on the brochure the AMV might be €350,000 so they start the bidding at €230k, one or two bids go in and now it’s at €250k but nobody goes above that so it is withdrawn!

If you are not going to let anything clear for less than the AMV why bother starting the auction at a point which requires any action on behalf of either side at a single Euro less than the point at which a sale can actually take place? This wasn’t an auction that represented an opportunity for a buyer to catch a deal, rather it was a shop window with a live performance instead of posters, we left early having seen enough.

REA would be doing their firm, and the rest of us a favour if they produced credible valuations but only allowed sellers in who would accept the result of the auction – then you could create a vibrant sales floor because people would show up in their droves in the hope of catching a bargain – and the more bidders there are the better it is for the seller, if you don’t want to accept the result of the model then don’t put your house into the auction, it’s really that simple.

The fact that the room was filled shows that there is still appetite and a market, the fact that nobody was bidding to prices that would create a sale shows that there is still a misalignment between what property is ‘worth’ (from a sellers point of view) and what it will actually sell for with live buyers bidding on it. Sadly, many sellers are still living in cloud-cuckoo-land, I believe they will get their AMV bids eventually, but they might have to hang around for a decade to do so.

Comments

  1. Frank

    I think you are the only honest voice in the market Karl. myhome.ie was asking if this event is a sign the market has finally bottomed out. I guess that is a resounding NO. When is the market going to cop on to the fact that a property’s value is no longer about how much money the buyer can get from a bank!

  2. Denis

    As a first time buyer in South Dublin waiting in the wings with a large deposit I know prices are going to fall much further for the next 2 years due to rising unemployment, emigration, interest rates.

    Couple this with tighter regulation, falling no. of 1st time buyers in our demographic over the next 15 years, less money being lent by the banks, salary cuts and job insecurity.

    I would buy now if prices were realistic but they are not so I will continue to rent which is no longer ” dead ” money as the longer I wait the more I am saving off the purchase price !

    Everything will sell at the right price be it a house, car, tv, holiday etc. As soon as property prices adjust to match the fact that the bank is back to lending to about 3-4 times your salary only then will things move.

    The only places people I know are interested in buying is D 4,6,6w, 14,16,18 and South County Dublin and only specific areas withing those.

    So those expecting over € 400k we just ignore but are seriously looking at houses that are priced close to what will actually be accepted. Don’t put your house up at 450 if you know it won’t make more than 340 !

    Nothing less than a 3 bed semi either with no updating reqd., nowadays apartments are for renting, not buying and this is the buyer reality.

    So in this blinking contest, I can wait indefinitely, at least another 4 years, to the vendor, can you !

    D

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