Keen observers of our business may have noticed a significant shift in the approach we have taken to selling real estate in the current market. Auctions. This will come as a big surprise to many as it has long been argued ‘Auctions don’t work in Wellington’.
This month’s Barometer will provide you with insight into our decision and shed light on why auctions have become a game-changer.
The Backstory: Wellington’s Dominance by Traditional Sales Methods
For decades, Wellington’s real estate market has been dominated by ‘deadline sale’ and ‘tender’, often accompanied by low price guides in anticipation of higher engagement.
The perception was that Wellington didn’t favour auctions, with the naysayers linking the bureaucratic nature of the region and the conservative mindset of its residents. These reasons are mere distractions. The truth is that no one has truly explored the benefits of auction, nor have seen the potential of doing something against the norm.
Adapting to Market Momentum Shifts
During the boom times every agent was a ‘superhero’. And they didn’t hesitate to tell you so. But, as the market stagnated and then significantly declined, sales results became scarce, and agents have divorced themselves from the role they play in the outcome.
The fact is when the market is booming it is the buyer who creates the result. But when the buyers are fearful, we need to understand why and provide reassurance to our buyers that home ownership is still a worthy pursuit. The transparency of the auction has given our buyers this reassurance. And for anxious vendors the ability to sell with a method which creates momentum and competition in a challenging market, has meant that they can still achieve their life goals.
And it’s working far beyond our expectations!
The Importance of Process
Regardless of the sales method employed, having a well-defined process is crucial. Unfortunately, many agents fail to recognise this fundamental aspect. Auctions demand a high level of focus and accountability and so a falling market is when agents will shy away from auctions stating they only thrive in favourable market conditions.
As a team, it is our responsibility to generate substantial interest in the property. We also guide buyers throughout the auction process, leaving no room for inactivity or complacency. As we often remind our clients, the auction process is hard work, and our skill is judged in a public forum, a challenge which we have wholeheartedly embraced. It’s important to note that all sales methods can succeed during good times, a flat or falling market is where auctions shine, but only if executed well.
The Success of the Auction Approach
At the time of writing, we are proud to report a 100% success rate for all of our auctions in 2023. While we are currently employing all methods, and understand that this success may fluctuate, no other approach comes close to this success rate, especially in the current market.
Across the last five months we have successfully auctioned first home properties valued at $840,000 right through to a large, lifestyle property which sold for $2,795,000. This proves that the approach is effective across all market segments.
The key to success lies in allowing the market to assess and determine the value of the property. And also for buyers to reassess and resubmit their offer, in the way of a bid, right up to their maximum pre approved dollar amount. Every buyer in the room has come to WIN and the transparency of the process provides reassurance to buyers that others also see value in the subject property. It’s encouraging them to put their best foot forward without the guess work. This has been fundamental to the success.
In conclusion, our adoption of auction as a sales method in the Wellington real estate market has yielded remarkable, and unanticipated, results. We have harnessed the power of auctions to navigate the worst housing market conditions in memory.
The Wellington Market
Currently, Wellington’s real estate market follows its classic seasonal patterns.
Properties suitable for the colder months are performing well as buyers face limited options. We have also observed a slight resurgence of investor interest in the city with the Reserve Bank signalling we are at peak OCR which is alleviating a lot of buyer fear and uncertainty. Unexpected net migration levels are tipped to put pressure on the rental market, a scenario which has historically encouraged people to investigate home ownership once again. Couple this with 18 months of pent-up demand, we are positive about the upcoming year. Let’s hope we are right!
Please feel free to call and chat to us if you want to hear how auction can work for your property in the current market.
May Auction Success
Wellington Market Quick Stats
What’s on this June in Wellington?
Winetopia 2023 – TSB Arena, 16th – 17th June 2033
Discover the very best of New Zealand’s wine and food when Winetopia 2023 takes place at Wellington’s TSB Arena in June. Here’s your chance to explore all the best New Zealand wines in one place – it’s the place to go for a wine deep dive. Filled with free educational talks, masterclasses, and tastings, you will see over 50 wineries from across the country. There’s a full line-up of local and international gurus who can cater to wine novices and aficionados alike.
The Pink Floyd Experience, TSB Arena, 10th June 2023
Half a century ago, Pink Floyd released their landmark album, The Dark Side of the Moon – it became Pink Floyd’s most commercially successful album and one of the world’s biggest-selling albums of all time. The Pink Floyd Experience returns to Wellington to pay homage to this 50-year-old landmark album.
Kinky Boots – St James Theatre, 28th June – 15th July 2023
It tells the story of Charlie Price, who has reluctantly inherited his father’s shoe factory that is on the verge of bankruptcy. Trying to live up to his father’s legacy and save his family business, Charlie finds inspiration in the form of Lola, a fabulous entertainer in need of some sturdy stilettos. As they work to turn the factory around, this unlikely pair find they have more in common than they realised and discover that when you change your mind, you can change your whole world.