It's the end of the 'monster' auction ball
Early in 2011, in the murkiest depths of Ireland's massive property crash, a seemingly crazy plan was announced to sell 82 properties at auction - in one single session.
The established Irish property sector was quite simply gobsmacked and the general public tantalised. Ireland was a basket-case state on the brink of bankruptcy. Banks weren't lending at all for property purchases. No one apparently had money to buy bricks and mortar. Property in all its forms was out of fashion as an investment.
Sell 82 properties in one day when some auctioneers couldn't sell one in a week? The industry thought these guys must be really be bonkers. Allsop Space, an organisation set up here by entrepreneur Stephen McCarthy and incorporating the expertise of the UK based Allsop estate agency, was lining up Ireland's first "monster" auction at a time when estate agents were taking six months to sell one property by private treaty. Ireland, particularly in its rural parts, was at a property market impasse. Values had fallen through the floor but no one knew how far and few were prepared to reduce their prices realistically enough to sell. The market was completely stuck. Some locations had no sales for so long that auctioneers no longer knew what the true market value vales of properties were.
Against this background McCarthy had recruited the experienced Irish estate agent Robert Hoban (an enthusiastic and capable operator who had been working with Savills) for local expertise and also imported the services of black belt "monster" podium auctioneer Gary Murphy from Allsop HQ in London.
Following in the wake of the 1989-1991 UK property crash, Murphy had gained vast experience selling off hamstrung bank-repossessed properties in big event auctions. Allsop had discovered that despite the then UK market stasis, a crucial point had been reached following their crash whereby banks were fed up trying to sell stricken properties by slow private treaty means and at unrealistically high prices. At that point they were prepared to take whatever the bottom line was - no matter how low - just to get the growing pile up of repossessed properties off their books. Allsop suggested the cheapest and most efficient means of doing this was big multiple auction events where one property after another was auctioned at whatever the highest bid was. No matter how low. The concept proved to be a success. Thousands of stricken properties were disposed of in this way.
Recalling the UK trend, McCarthy believed the same could be achieved here and went over there to join forces with Murphy and Allsop to organise it. Hoban was sent to London to train in "dummy" auctions during which hard-bitten UK Allsop podium performers put him through his paces. After a few cancellations, the new Irish firm organised and advertised its first event at a hall booked in Dublin's Shelbourne Hotel. Such was the interest that the hotel quickly filled up on the day and the organisers had to think on their feet to accommodate the monster attendance. Someone was sent down to nearby Doheny and Nesbitts pub to ask whether a video link up could be set up on the hoof to accommodate the hundreds-strong overspill. Not only were local news cameras there but also news crews from overseas, British TV plumping for the "Oirish" cliché - "while we watch sport in ours pubs, the bankrupt Irish bid for property with pints of Guinness in hand".
At the Shelbourne, the first lot was a tiny studio apartment in Temple Bar with an €85,000 reserve. Frantic bidding sold it for €127,000. Before long it became apparent that the Allsop Space auction would have "genuine" reserves and guides, vital for building trust in the process.
Previously in the Celtic Tiger years, the Irish public had been stung by a sham auction process which saw artificially low guides pitched in order to sucker in big crowds. Houses regularly sold for 30pc to 50pc more than their guides. It also quickly became clear that plenty of Irish punters had money stashed away in savings accounts. The typical buyer that day and for the next two years was a 60-something farmer with cash stashed under the mattress. That day 81 out of 82 properties sold. Allsop Space went on to sell more than 5,000 properties over the last six years, the most recent disposing of over 200 in one event just before Christmas.
Many firms tried to imitate the magic formula but failed - largely because they just couldn't bring themselves to provide accurate and "real" guideline/reserve prices. Despite raising the hackles of local estate agencies and anti-bank protestors (who famously closed down one of their auctions), Allsop Space and its six times a year "monster" auction machine performed a invaluable service.
It established "true" bottom-line value yardsticks across the board and got the Irish market moving again.
Despite beliefs to the contrary, Allsop sold almost no property in which the financially-strapped occupiers were not complicit in the sale of the property. Indeed a great chunk of the sales provided real relief for stricken owners who had cut a deal to walk away with a high level of mortgage loan forgiveness.
Last week it was announced the local Irish business has bought out Allsop UK and is now shifting to "monster" events online under the new BidX1 brand. This was followed this week by news that key driver Robert Hoban has left the organisation to pursue his own plans. It means we have likely seen the back of the 200 property-strong monster attendance auctions.
Despite splitting opinion, they did the Irish market service by unsticking it when nothing else could.
They provided thrilling spectacles conducted with cavalier but efficient panache. We won't see their likes again.