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CLIENT NEWS - Competition in real estate auction rooms in Hamilton heats up

Competition in real estate auction rooms in Hamilton heats up

Lodge Real Estate Managing Director Jeremy O’Rourke says after a brief hiatus in activity for real estate auction rooms in Hamilton, competition is heating up again.

“During the first half of the year, investors had pulled back from the residential housing market in Hamilton.  And the city’s auction rooms certainly felt this effect.

“With fewer buyers in auction rooms, fewer vendors were taking their homes to auction. But over the past month or so we’ve seen those investors coming back to auction rooms competing with other buyers and that has resulted in some extreme competition. 

“The low number of homes currently being listed on the market is also contributing to increased competition for scarce, quality properties,” says Mr O’Rourke.

Only 751 homes were available for sale in Hamilton at the beginning of July, compared to 852 in May and 899 in April. 

While competition is high in auction rooms, Mr O’Rourke says buyers are generally not bidding at levels above market value.

“Although we are seeing a lot of competition at auction, buyers are measured and realistic in making offers at around market value.  We certainly aren’t seeing the buyer fervour of winter 2014 where sellers were getting unrealistic offers on their properties,” he says.

Mr O’Rourke says he expects to see more homes going to auction over the next few months.

“We should see the number of homes going to auction in Hamilton grow as we head into spring.  The first reason for that is that the market is cottoning on to the fact that increased auction competition is a lucrative scenario for sellers.  That’s because when you take price away, the market makes its own decision.

“Additionally, investors are re-entering the market now that capital gains taxes are behind us and compliance rules no longer hang over their heads.  Their re-entry gives sellers confidence to list at auction when there are more buyers in the room ready to make a move,” he says.

The Real Estate Institute of New Zealand (REINZ) released its statistics for June 2019 last week (note: 12 July). 

The median sale price dipped slightly to $560,000 for the month of June, from $580,000 in May 2019.  This is equivalent to the media house price in June 2018.

Only 252 homes were sold in Hamilton during June 2019 as compared to 335 in May 2019 and 233 in June 2018.