Auctions on the increase in Boom suburbs

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From: Dave


Hi everyone.

Is it just my observations, or is this happening across the country?

In the inner city suburbs that have only recently been identified by investors as 'good opportunities' or 'boom suburbs', nearly ALL listings are going to auction. Just 6 months ago, private sales counted for about 20% of all available listings.

The areas in Melbourne I'm referring to are:
Kensington, Flemington, North Melbourne, Footscray, Yarraville, West Melbourne and Brunswick. 6 months ago, only about 80% of listings in these suburbs went to auction. Now it's at around 95%!

The tactics agents use to achieve higher sale prices at auctions are well known. Now that these areas are recognised across the board as being growth suburbs, some owners here are 'cashing up', and agents are doing their bit by insisting on auction sales to get the highest possible $$.

Has anyone else found this to be the case in their area/city? I'd be interested to hear what's happening elsewhere. Coz I hate auctions.....

Cheers,

Dave


(...it's almost beer o'clock)

 

[cathyb]

Reply: 1
From: Cathy Baxter


Hi Dave
Not in the regional areas auctions are used to reduce the price of homes (unwittingly by agents or maybe they're just interested in turnover). Bargain prices can be had at auction in the country. And you can get cap gains by adding value, buying under market price but this will not be a continuing trend. At least not where we live. If no population growth = no capital growth.

Yields are exceptional though.

Cathy

 

[Michael Yardney]

Reply: 2
From: Michael Yardney


Dave
You are right.
This just goes to prove that auctions are a great way to sell properties and achieve the highest price in a hot market, contrary to what Neil Jenman tells you.
If you were selling wouldn't you want the best price?
Michael Yardney
Metropole Properties

 

[WebBoard]

Reply: 2.1
From: Ioan Macgregor


>the highest price in a hot
>market, contrary to what Neil
>Jenman tells you.


The Jenman way:

Convince Vendors that you have this huge list of people who are waiting to buy a home in your area, Put a sign up.. wait for callers (can take ages).. sell.. Condition seller to a lower and lower price..



Normal agencies:

Actively market the property (conditioning vendors to a lower price along the way).. sell the property long before a Jenman agency would have sold it...



Ioan.

 

[WebBoard]

Reply: 2.1.1
From: Scott Marshall


Jenman also says never use your home as security for an IP. Save for a deposit? Not hard to tell he is an agent with delusions of grandeur.
Scott

 

[michele_b]

Reply: 2.1.1.1
From: Michele B


In Adelaide's inner suburbs, auctions seem to be the norm, as there's always huge demand for our gorgeous late 1800s character villas and cottages.

While I don't agree with Jenman entirely, I think he may be right about auctions - I attend lots and I have OFTEN heard the successful purchaser whisper excitedly "Wow, I never thought I'd get it so cheap!'

Might be better just to invite offers. Serious purchasers put their very best offer in when they think they have just one chance and it better be good - we're talking heart buyers here of course rather than hardcore investors (because they don't get emotional right?)

Why would you accept less than your purchaser's very best offer?

Michele

 

[WebBoard]

Reply: 2.1.1.2
From: Andrew Pennisi


Hi Scott
I don’t think Jenman ever said that you should never use your home as security more, you should never place your home at risk. He is certainly not referring to the qualified investor like yourself but the Ma's and Pa's out there that are losing there life savings to theses crooks selling gold coast package deals with 2 nights free accommodation 10 year rent guarantees and a free set of steak knifes for 2 and 3 times there true value. His thought is that the family home should always be safe. I can personally tell you of many cases where I have seen people loose their home by not applying these rules. This is just my understanding of where he is coming from I hope it is of some help.
Regards Andrew