Housing auctions are on the rise especially in Auckland.
House auctions remain popular as buyers and sellers attempt to make the best of the sluggish market.
More than 10 per cent of properties put on the market across New Zealand this month were listed as auctions double the figure from April last year.
The percentage has fluctuated over thepast 12 months, with a spike last August, but the method remains much more popular than it was at the height of the boom.
Barfoot & Thompson auction manager Tim Carter said the company listed more than 2000 auctions already this year, compared to 1271 in the first third of 2009. Last Wednesday was one of its best days, with 28 of 45 listings selling under the hammer.
Auctions are particularly popular in Auckland, which accounted for 57 per cent of all such listings in April.
But agents and auctioneers remain split over the method.
Auctioneer Mark Sumich, who handled 18 auctions this week, said they were transparent. "It's a situation where you can monitor other people's opinions on value."
LJ Hooker agent Jodie Bell said auctions "flush out the very serious buyers very quickly - and the people with the money".
But Ross Brader, who sells homes in Auckland's Grey Lynn, Pt Chevalier and Westmere, said sellers should go to auction only if they were sure their home would sell.
He estimated an auction costs between $2000 and $6000 in advertising, and said it was cheaper to list a property on the internet. "To me it's more of a ploy to spend far more than is necessary in marketing. "
Brader said only two of the 28 homes now for sale in Pt Chevalier were up for auction. And with demand high as listings remain low, one sold after a day.
Carter estimated the cost of an auction at the firm was only about $1000 and said the situation was different to the early 1990s when auctions were seen as a "fire sale situation".
Bayleys auction manager Hayden Duncan said expensive auctions were a "misconception" and a seller would spend about $450 with his firm.
James Young, of the real estate research unit at Auckland University's business school, says auctions require a shorter marketing time and provide more certainty to sellers.
"If it's successful you know it's going to sell and you won't sit there and negotiate forever," he said.
"I think people want that ... when they're selling a house, and a lot is driven by lending institutions that have that liquidity need - they want their money."
But Young has noticed an increase in failed auctions: "I think that may be because properties are going to auction that traditionally wouldn't have before."
Alistair Helm, chief executive of property website realestate.co.nz, said the use of auctions remained an Auckland phenomenon, but most homes were sold by fixed price - 57 per cent this month compared to 65 per cent last April.
Market snapshot
Sellers seem prepared to wait for the right price, despite the high number of unsold homes, according to a property report released yesterday.
The monthly snapshot, from realestate.co.nz, said the average asking price in April was $422,520, only 2 per cent below the October 2007 market peak.
Time needed to sell properties remains high at 46.5 weeks.
Chief executive Alistair Helm said sellers were accepting longer sales cycles.
Unlock all articles by subscribing to this international offer
All-Access + BusinessDesk Weekly
Herald Premium, Viva Premium, The Listener & BusinessDesk
