Auctions increase as housing market heats up

Auctions can have benefits for both buyers, and sellers. PHOTO/FILE

As the property market continues to heat up, Hawke's Bay real estate firms are putting more properties under the hammer.

At Tremains Real Estate, managing director Simon Tremain said properties were usually sold through tender.

"With the market moving like it is, when something is working well you stick with it," he said.

However, on Wednesday night a crowd gathered for the auction of eight properties listed by Tremains, Colliers International Hawke's Bay, and NZ Sotheby's International Realty Hawke's Bay. The auctioneer - John Bowring - was brought down from Auckland.

Two properties sold prior to the auction, three went under the hammer, and one was sold immediately afterwards, Mr Tremain said, all with very good sale prices.

Through auctions buyers were able to gain confidence by seeing what others were bidding at, while at tender people could be timid about putting a price forward, he said.

Buyers would also push each other's bids higher - resulting in a better sale price for the vendor.

Pleased with Wednesday's results, Mr Tremain said although tenders would still be the usual form of sale, they would continue with auctions.

Harcourts Hawke's Bay managing director Kaine Wilson said they were already a very auction-focused company.

Recently, they had a number of auctions which attracted large crowds, there were multiple bidders, and everything sold by 5pm. In the past month all properties listed had gone to auction.

And, in the current environment Mr Wilson said they were seeing their competition hold auctions more often.

"A lot of people are seeing how many [properties] we're putting under the hammer and selling," he said. "Its moving from a small part of the market, there's a real trend from tender to auction."

The auction process was more transparent, which Mr Wilson thought made buyers, and sellers happy.

Sellers achieved "very astronomical prices", while bidders were able to see the process happen - and those who were underbid understood why.

Ray White managing director Elanor MacDonald said she did not think they had reached an "auction" market overall, as it relied on more than one buyer being prepared to pay over the odds.