24 February 2015

Auction sales are helping to sustain Northern Ireland property market


Property auctions are set to remain an important tool in helping shift homes and land across Northern Ireland, it has been claimed.

And the claim from Lambert Smith Hampton comes as the number of residential property sales reached their highest levels since 2007, during the last three months of 2014.

The commercial property company revealed that 93% of its lots up for grabs in auctions during 2014 were sold – raking in almost £9m.

Lambert Smith Hampton’s Daphne Mahon said auctions were providing a strong platform for customers seeking good prices in Northern Ireland. But Conor Mulligan, managing director of house builder Lagan Homes, said home buyers should exercise serious caution when buying property through auctions.

“They are very difficult places. If your hand goes up, and you are the highest bidder, then that’s it,” he said.

“And it also has often been a dumping ground for property – while there may be a jewel in there, the majority would be someone getting rid of a house.”

And sellers often end up getting a much lower price than if they flogged their properties on the open market, Mr Mulligan said.

“I wouldn’t put my houses on it – you won’t get the same value and people are expecting it to sell for a lower cost.”

The residential property price index from the Northern Ireland Statistics and Research Agency includes auction sales and cash purchases of houses.

But other house price surveys, including the University of Ulster survey, do not.

According to the RPPI, there were 20,200 residential property transactions in 2014, up 22% on 2013, and the highest since 2007.

Mr Mulligan said: “Auction sales account for a tiny part of the overall property sales in Northern Ireland.

“In 2014 there were around 20,000 property transactions, while auctions make up just a few hundred.”

But property auctions still remain a successful tool in shifting residential and agricultural land, he said.

“While auctions have for a long time been used to sell both commercial and agricultural land, they were normally only used for residential property in distress.

“The purchasers therefore expect fire sale status and fire sale prices.”

There were almost double the number of transactions in 2014 compared with 2010. Almost 5,300 residential properties sold during the end of last year.

And while that includes sales through property auctions, most are through the traditional open housing market.

Property auctions have been a part of a post-recession marketplace – with developers and first time buyers snapping up cheap homes at dozens of events over the last few years.

It was a common way for banks to quickly sell-off and recoup cash if owners faced bankruptcy or other financial issues.

Lambert Smith Hampton’s Daphne Mahon: “Last year’s success rate has further cemented our auction as an established means of property disposal in Northern Ireland.

“It’s a common misconception that properties are only brought to auction if there is a problem. This isn’t the case and often our buyers find lots for a very competitive price.”

One Co Fermanagh lot – which includes two derelict properties and 15 acres of land – goes under the hammer next month with a reserve of just £30,000.

The latest Lambert Smith Hampton auction – which takes place in Belfast’s Europa Hotel on March 19 – is set to attract 45 new lots and hundreds of eager bidders.

View this and more articles on the Belfast Telegraph.

Caption: Lambert Smith Hampton claim residential property sales reached their highest levels since 2007

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