The number of top end properties now entering this domain are increasing, with luxury properties revealing the true mettle of auctions. Professionals say gone are the days when exclusive auction sales carried a stigma, and in is top notch marketing. And in particular for urgent sales such as liquidated estates where long listings are simply not an option.
Some say the Cape auction market this year has brought greater reality to the term ‘market value’, while for others it has become a point of contention since it is also seen as driving average prices down. The real estate industry are increasingly seeing sales of exclusive residential properties at auctions at much below the value of previous listings, some which extended to six months or more prior to going on auction. Although not all auction sales originate from distressed or urgent circumstances, ultimately the decision to sell by this method lies with either the seller, the bank or the liquidator. All of whose best interest lies in obtaining the highest possible selling price on the day of auction.
Auction Alliance CEO Rael Levitt is of the opinion that residential auctions have revealed their maturity since the global recession, and increased popularity among the general buying public is proof of the results it offers sellers, and the value it offers buyers.
Saturday’s historic auction of Quoin Rock Wine & Manor Estate in Stellenbosch by Auction Alliance not only illustrated the principle of market value at work, but was also seen as one of the province’s highest value liquidation sales. Valued at R120 million with a further R30 million valuation attached to the moveable assets of art and antiques, this high end property sold for just over half the valuation amount at R60.5 million, considered a ‘fair price amid the current economic climate, and excellent value for the buyer’. For some there was good news in, that despite interest from several foreign investors, the property fell into the hands of a local investor who is no newcomer to Cape wine estate ownership. The 194ha estate that was placed in provisional liquidation earlier this year, includes a helipad, an underground cave that housed functions for leading Stellenbosch business people and luminaries, a spectacular homestead, and an Italian designer wine cellar.
Another top end Cape Town auction in July this year saw an exclusive Mouille Point penthouse auctioned at well below its R75 million listed price while on the property market for over six months. Commenting on the difference between asking price and that obtained, Levitt said the R50 million auction price illustrated its true market value, representing that which a buyer is prepared to pay for a property. Not only was it the highest price ever achieved for a penthouse in the area, but it also reflected interest in top end coastal properties resulting in increased migration due to the city’s efficient management, and superior quality lifestyle.
When auctioning a property is the sellers choice, a suitable choice of auctioneer to conduct the sale of a property can be made from consulting the SA Institute of Auctioneers (SAIA) who provides access to every registered auctioneer in the country. The institute’s detailed website contains its constitution, code of conduct and the necessary knowledge required by auctioneers to conducting auction sales responsibly.