Allsop/Space's four mass auctions drew big crowds of mainly cash buyers, writes EDEL MORGAN
IF THERE WAS one overriding theme in 2011, it was the mass distressed auction which wiped the floor with every other method of selling property.
After several years of little or no auction activity, the entry of Allsop Space into the market in April led to packed auction rooms and brisk bidding. The difference this time around was that the property up for grabs was mainly distressed and being sold by receivers at rock-bottom reserves and, with an absence of credit, to mainly cash buyers.
British auctioneering giant Allsop, which is affiliated with Irish estate agent Space, has shown itself to be a slick operator, holding four auctions with a 92 per cent success rate, proving there is money out there and people who are willing to part with it at the right price.
In total, 314 properties sold at the four auctions, raising €52.4 million. About 40 properties were sold to buyers abroad and an estimated 85 per cent went for cash. But are there enough cash buyers to sustain that market?
Robert Hoban, director of auctions at Allsop Space, believes it’s hard to predict. “It is clear from the last four auctions that there is a large amount of cash in the marketplace and I do have confirmation that a certain amount of buyers are availing of finance in one form or another,” he says. “A key fundamental is the addition of overseas money to the domestic market, which we are able to tap in to. We have had over 160 overseas bidders formally register with us, and over 40 properties have been sold to those abroad.”
A few others tried to go down the mass auction route, but with disappointing results. Merlin’s first property auction last month had a poor turnout, selling only two properties under the hammer, although a few sold afterwards. The lots were being sold by private buyers, with reserves too high to tempt investors.
Ronan O’Hara, a director at Savills, says few Irish agents have gone down the distressed auction route because banks here have been reluctant to expose the level of debt. “But in 2012 and beyond, they might resign themselves to the fact that they can’t hold on forever,” he says.
Hoban says he won’t be surprised if other firms get in on the act. “The auctions are not solely for distressed properties. Many private individuals have successfully availed of our auctions, and the process is open to anyone.”
While there were a few successful auctions of private property, O’Hara says the appetite for auctions “in the normal sense” is poor unless the reserves are very low. However, a number of agents sold properties at auction in 2011, often for over low AMVs.
In recent months, homes selling under the hammer included 1 Oaklands Drive in Sandymount, an executor sale by Savills which achieved €95,000 over the guide price of €295,000; Prince Patrick on Knocknacree Road, Dalkey, a big house needing work, sold for €927,000 – €52,000 over the guide through Lisney; while Gunne sold 21 Waterloo Road for €760,000 – €10,000 over the reserve. The common thread is that all were good properties in “desirable” locations at rock-bottom reserves.
O’Hara believes there is “a lot more money out there. There is no doubt that in 2012 some people will be putting cash into property. It’s a no-brainer if you’ve cash to spare.”
