This East Hawthorn house drew $500 bid rises before being sold.Tactics are back in the spotlight after the auction of a Port Melbourne apartment was restarted on Saturday afternoon after passing in without a single genuine bid.
Kay & Burton agent Robert Broadhurst said ”we’re finding no one wants to bid first at auctions, but we had sent out seven contracts and knew there were four bidders in the crowd.”
”We’d had offers of $510,000 up to $535,000 before the auction so we opened at $510,000, but no one came in so I thanked everyone for their time and passed it in,” Mr Broadhurst said.
But after the crowd dispersed, four parties remained behind and started making new offers.
”It became very messy and non-transparent so we resubmitted the property and sold it for $551,000.”
Properties passing in on a vendor bid made up 28 per cent of the 432 results reported to the Real Estate Institute of Victoria over the weekend.
While some genuine bids may precede the vendor bid at auction, many open and close the auction without any participation from gathered onlookers.
Sometimes that can genuinely indicate a lack of interest from buyers, but it can be a fraught strategy when there’s one or more interested parties.
Mr Broadhurst said if he found himself in the situation again, he would resubmit the property publicly. ”It’s the first time it’s happened to me in 18 years. I’ll do it again if it happens a second time.”
Data from the REIV indicates an auction clearance rate of 59 per cent over the weekend, an improvement on last weekend’s 55 per cent.
While 222 properties out of a reported 432 results sold at or after auction, a further 175 passed in – 123 on a vendor bid.
The REIV is waiting on 58 results and agents reported 541 private sales during the week.
One auction not short of bidders was on Channel Nine’s reality television renovation show The Block last night. Contestants had been renovating four joined terraces on Dorcas Street in South Melbourne.
Advantage Property Consulting advocate Frank Valentic, who was involved in all four of the auctions, said there was competitive bidding for all the properties, with keen owner-occupiers fighting it out with investors who came looking for a good deal.
”Lots of people who thought they could have snagged a bargain like in Richmond last year ended up walking away,” Mr Valentic said.
Last year, one of the four Richmond properties sold at the auction. However, the online bidding was not successful, lagging $200,000 to $250,000 behind where the bidding was at, he said.
Regardless of the auctions’ celebrity status, their successful results provided an accurate reflection of the current market, he said.
”Market forces are different now compared with last year. Interest rates have dropped five times and investors have come back,” he said.
But extracting bids from interested parties can still take some patience and persuasion.
In the eastern suburbs, one bidder offered $500 rises to Kay & Burton agent Scott Patterson at the auction of 6 Mowbray Street in East Hawthorn.
The house eventually sold after auction for $2.57 million.
In Canterbury, Jellis Craig director Alastair Craig took $1000 bids for 36 Maling Road, as rain started to pelt a large crowd of neighbours. The rundown Victorian house had been in the same family for 80 years and the late owner had moved in at 15 years of age and recently died at 94.
It sold for $1.82 million but would have been worth $2 million in a faster running market.
”Everyone told us, with all the work that needed doing, it was worth $1.8 million,” Mr Craig said.
”Now is the perfect opportunity to upgrade, especially if you have a steady income, because the top end of the market has been hit the hardest in this market.
”But some people are sitting on their hands and worrying about Europe or the carbon tax. The economy is OK.”
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