An increasing number of residential properties in South Africa are now being sold by auction, and the incidence could rise significantly by year-end.
Sellers and buyers are increasingly aware of the benefits of property auctions, and have embraced the concept. Once the market becomes aware of the advantages of auction, take-off could be substantial, says Lichtenstein.This is according to Dovi Lichtenstein, on-site residential property auctioneer and agent at Main Street Auctions, a division of The High Street Auction Company.
He says the trend has been underway for some time, but has reached critical mass these last two years. In the last three months, he says 72% of his potential clients have opted to sell their property via the auction method.
“I believe up to a third of homes for sale could come under the auctioneer’s hammer by this time next year,” says Lichtenstein.
“In a housing market like Australia, the vast majority of sales are completed by auction, and judging by local trends it seems we will be playing catch-up.”
Sellers and buyers are increasingly aware of the benefits and have embraced the concept. Once the market becomes aware of the advantages of auction, take-off could be substantial, says Lichtenstein.
He says a key breakthrough was the removal of the old ‘bankrupt estate’ stigma.
“Years ago, the public thought an auction meant the owner had gone bankrupt,” says Lichtenstein.
“That perception is a thing of the past. Today, not all sellers are forced into an auction; they opt for auction because it’s the smart way to go.”
Lichtenstein gives the key drivers for the popularity of property auctions:
- No ceiling on the value that can be achieved.
- Competitive bidding as the number of potential buyers on site continues to grow.
- Commission payable by buyers rather than sellers.
- Speedier sale completion, usually within four to six weeks.
- Financially qualified buyers make offers, meaning no snags because of problems with mortgage approvals.
- Less intrusive processes for the home seller, as there is no need for scores of people supposedly ‘in the market’ to view the property for months on end.
- “Within the industry we can track the growth of the auction model through advertising and online exposure across the most frequently visited property sites, but grassroots support is also evident.”
According to Lichtenstein, the hottest market segment involves homes with a medium to lower value price tag.
“Over the last two years, attendance at on-site auctions has grown steadily, while the number of registered bidders has also increased,” he says.
“Clearly, the numbers vary across regions, suburbs and price ranges, but the overall impression is the same nationwide; selling your home through auction has become the preferred option for smart, well-informed consumers, and that trend is not going to end any time soon.”
Print
