The first major distressed property auction of the year kicks off in The Shelbourne Hotel, Dublin tomorrow, Thursday 1st March 2012, at 10.45am.
It is also the first of five multi-lot auctions planned by Allsop Space and it will be interesting to see whether the powerhouse of fire-sales (not fire-sales? … the agent doth protest too much!) can replicate their 2011 successes. Between April and December 2011, Allsop Space sold 327 properties. That’s an amazing 96% success rate. The mix tends to be 80/20 residential to commercial offerings.
In addition to livening up a national market in the doldrums and providing access to bank stock, the holy grail of cash-flow investors, this type of activity brings with it much-needed transparency. For buyers and sellers, agents and banks, this information is vital for establishing market value. In fact, it can be said that public auction is the truest test of ‘market’ value as any property, in its simplest form, is worth what someone is willing to pay for it at any given point in time. This is particularly true of a functioning market; however, it is fair to say that we are not operating in a functioning market, not yet.
In fact, it has not been a good week for sellers with the latest CSO figures reporting a drop in property prices nationwide, with a 4% drop in the Dublin area. Also, daft.ie’s latest survey suggests that buyers are no less cautious than they were in previous years. It remains to be seen whether the extended mortgage interest relief will be enough to motivate buyers to proceed.
For tomorrow, I am expecting another success although I do not expect every lot to sell as there are definitely a few undesirable properties in the mix. And, while maximum reserves on the day will be exceeded, on average, I believe that the average will be lower than we have seen at past auctions i.e. lower than 35% (possibly even lower than 25%), although there are two commercial gems, a suite in the Capel Building and a building on Upper Ormond Quay that might distort the overall average.
We welcome back to Dublin Ireland’s favourite visiting auctioneer, Gary Murphy, the man who brought us such gems from the plinth as “What, you’re surprised someone bid? It is an auction sir!” or to the reluctant half of a bidding couple “Oh sir, you will not be popular tonight, long drive home – oh look, she hates you … [another bid] very wise sir!”.
Finally, Buyers Broker would like to wish bidding clients every success at auction (just remember the three golden rules!). We look forward to seeing you there and for those who are bidding but cannot attend, we will be contactable all day on our special auction mobile number and will keep you updated throughout the day.