Investment properties top auction sales
We are bang in the middle of auction season and there is no better insight into the health of the market than by watching the results coming out of the auction rooms around Ireland. While the make-up of catalogues is predominantly residential, it is encouraging to see the growth in the number of commercial properties being offered under the hammer.
Without a national commercial property price register in place, auction results are the only prices publishable under Irish data protection law. By my estimation, over 1,000 properties have sold at auction since January. A great number of successful auctions have been held by agents around the country, including DNG, Sherry FitzGerald, ODJ, REA, GW2 and i-am-sold who all staged successful auctions in Cork, Limerick, Dublin and Galway. Success rates generally vary from 60pc-80pc.
Looking at these results and our own, it would appear that investment properties remain the strongest sellers at auction, followed closely by land and then owner-occupier stock. The investment lots with most bidders were tenanted residential investments, city centre apartments, multi-family apartment blocks, commercial properties with blue-chip tenants and industrial lots, either vacant or tenanted. In fact the demand for industrial property at auction acts as a nice barometer for the economy, given the correlation with the SME sector. At Allsop, we saw a remarkable 32 out of 34 (94pc) industrial units trade since January for a combined value of €8.1m, returning an average 23pc premium on reserve price. Two years ago, investor demand was stronger than that of the owner occupier, however, the reverse is now true, with most units being targeted by business owners or tenants in situ. Interestingly, in our May Allsop Private auction, we observed eight tenants bid on their own premises, with three ultimately prevailing. They had to ward off stiff competition from yield-driven investors.
In our own business, the growth of online technology and the popularity of online bidding is telling for the future of the property market in Ireland. An online-only auction held two weeks ago saw €8m of property trade across 54 lots, with over 300 registered bidders, each having provided an up-front deposit of €5,000. Over 1,000 bids were received and publicly recorded. The comfort with which bidders of all ages used the process was very encouraging. 43pc of bidders were located in rural areas, 33pc were aged over 50, and 56pc were using mobile devices.
Robert Hoban is commercial director and auctioneer at Allsop