AUCTIONnews uk property auctions analysis
Auction round up for 2010 talks to David Sandeman of EIG about
the effects of economic strife on the auction room.
Overview Against a backdrop of continuing economic difficulties, and a slow property market generally, the charts below show that the auction market has fared relatively well over the past four years and recently has shown some signs of tentative recovery. Overall, whilst the number of transactions recorded at Land Registry is down by 47 per cent from 2007 to 2010, the number of lots sold at auction has only declined by 18 per cent. Below is a review of the four key metrics
used for measuring the auction industry as a whole for the past four years.
Lots offered
It comes as no surprise to see that 2007 and 2008 were bumper years in respect of lots offered, and that 2009 and 2010 were nearly 20 per cent down. However, 2009 seems to have been the low point and in every quarter
Graph 1 LOTS OFFERED
12,000 10,000 8,000 6,000 4,000 2,000 0
2007 2008 2009 2010
Q1 Q2 Q3 Q4
Lots offered: still less than in 2007 and 2008 but creeping up Graph 3
Millions
£1,800 £1,600 £1,400 £1,200 £1,000 £800 £600 £400 £200 £0
AMOUNT RAISED
2007 2008 2009 2010
Q1 Q2 Q3 Q4 Revenues: still way down on 2007... but they are increasing 54 FEBRUARY 2011 PROPERTYdrum
85% 80% 75% 70% 65% 60% 55% 50%
8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
last year the number of lots offered was up on the same quarter for 2009. This is against a backdrop of auctioneers being even more keen to secure lots that have realistic reserves.
Amount raised
From a peak in 2007 where £5.8 billion of property was sold the amount has dropped to £3.2 billion for 2010. This is however only 7 per cent down on 2009, with the biggest fall being seen between 2007 and 2008. The reasons for this are several fold: the number of lots being offered is down as well as the percentage selling; the number of large residential lots and commercial lots generally being offered has also fallen; lower property values across the sector have declined.
Lots sold
As with amount raised, this metric has fallen over the period in review, though not as
Graph 2 LOTS SOLD
markedly. The drop has all but levelled off with the difference between 2009 and 2010 being less than two per cent.
Per cent sold
Notwithstanding keener reserves and guides, the absence of funding has put pressure on the sale rate and this is clear to see in Graph 4. Interestingly, the past three years have started off well with Q1 always being higher than the preceding Q4 quarter and then declined over the year. In 2010 the overall average was 70 per cent compared with 75 per cent for 2009 and a 16 year average of 75 per cent.
Conclusion
2010 was very similar to 2009 and in the second half of the year the gradual decline seems to have been arrested. I look forward to reviewing the first quarter of 2011 to see if these trends have continued.
2007 2008 2009 2010
Q1
Q2
Q3
Sales: a decent improvement in Quarters 3 and 4 Graph 4
PER CENT SOLD
Q4
2007 2008 2009 2010
Q1
Q2
Q3 Per cent sold: disappointing results in Q4
Q4
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