Pressure from investors to keep prices low or buy after the auction at below reserve levels led to a subdued room at CP Bigwood’s 2 May sale.
But the auction, which raised £7.9m off a success rate of 82%, was livened up by strong demand for vacant residential property
The West Midlands firm offered 100 lots and sold 82 including 20 prior at the sale, held at Aston Villa Football Club, Birmingham.
From the 66 vacant residential lots on offer some 55 sold, equating to a success rate of 83%.
Meanwhile, 88% of the residential investment lots sold.
A former children’s home in Fountain Road, Edgbaston, with potential to convert to a single dwelling, sold for £395,000, 117% above its guide of £300,000. A vacant three-bedroom home in Norton Lane, Earlswood, Solihull sold for £235,000, 74% above its guide price of £135,000.
Auctioneer Rory Daly said the strong result belied a subdued room as cautious investors tried “not to pay a penny more than they had to”.
This resulted in a higher than usual proportion of sales on or just above reserve prices, he said.
“It felt like a gritty one-nil win,” Daly said. “You came away and said: we’ve won, but bloody hell that was tough.
“Only 10-15% sold for prices that were very high above the guide, but 50% of lots sold on reserve or just above. Usually at a good sale, everything will sell for substantially above reserve.”
Investors were reticent to bid on a property because they recognised that buying unsold properties post-auction could result in a sold price that was below reserve, Daly said.
“Some investors’ expectation is that they can still buy property for less than they actually can,” he said. “Their expectation is that the market is more in their favour than it is. And they aren’t right, because an 82% success rate is a good sale in a fantastic market and in a stable market, which is what we have now.”
Some 67% of vacant commercial sites and the same percentage of commercial investment properties sold, while 89% of development sites sold under the hammer.
samantha.baden@estatesgazette.com
