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Going, going, gone: 90% drop in number of Dublin homes sold under the hammer

The past year has seen a rapid decline in auction sales with the situation unlikely to pick up in the near future, writes Mark Hilliard

Huntsman House, Jigginstown, Naas, Co Kildare: sold for €2.15m

No 15b Clyde Lane, Ballsbridge

55 Upper Grand Canal Street

38 Rathdown Park, Terenure

57 Wellington Road, Ballsbridge

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THE number of Dublin homes being sold at auction has dropped by nearly 90% since 2004, with 2008 set to be the worst year in living memory. Auctions are down more than 70% on last year's levels with little hope of improvement in the short term. However, there is a fine line of upper-end properties that continue to find buyers no matter what the state of the housing market.

Figures supplied by Douglas Newman Good illustrate a rapid fall-off in the auction sector over the last five years.

The vast majority of the market is Dublin-based and can be seen as a barometer of auction activity throughout the country.

This year just 127 properties were brought to auction compared to 421 last year, which is in dark contrast to 1,498 at the market's 2006 high. "The auction market as a method of sale has declined rapidly since its peak in 2006," said Paul Murgatroyd of DNG.

"This was to be expected because the changed market environment meant that best advice from auctioneers for the bulk of sales, especially this year, was the private treaty method.

"Indeed in the earlier part of the year many clients had a preference to auction but our advice was to choose private treaty."

The logic for this advice is that buyers in this year's market no longer feel the need to purchase quickly and so three- to four-week auction campaigns are not deemed sufficient, in the current climate, to raise the best price possible.

Just 21% of auctioned homes sold under the hammer this year, while that figure had hovered in the early to mid-40 percentile four to five years ago.

And while the average price of individual auction sales rose from around €1.2m in 2004 to around €2.2m this year, the number of homes sold for over the €1m mark has fallen dramatically from 232 in 2004 to 15 to date in 2008.

"During the boom years where demand for quality properties far outstripped supply as a result of our increased wealth and economic success, the heat of competitive bidding in an auction room usually led to premium prices being achieved," said Murgatroyd.

"From 2006, the supply of available top-class homes on the market strengthened in areas like D4 and D6, at a time when demand began to weaken, so under-the-hammer sales began to decline."

However, while all auctioneers will report the same mass drop-off in activity, there are still those few properties which have found buyers – and most of them for beyond the original guide price.

Properties in the leafy south Dublin suburbs have tended to lead the way. Lisney auctioneers sold four homes in Ballsbridge, Blackrock and Terenure this year with guide prices ranging from €1.8m to €5.5m. Each sold in excess of those prices by between €225,000 and €550,000.

Foxrock, one of Dublin's wealthiest suburbs, featured consistently with auctions of homes at Westminster Road, Torquay Road, and Brighton Road, selling for €6m, €5.7m and €4.2m respectively.

A breakdown of the top 10 residential auctions in Dublin in 2008 – supplied by Sherry Fitzgerald and including homes in Foxrock, Ballsbridge, Blackrock, Rathmines and Castleknock – showed the total sums reached were €38.9m. Despite the strong performance of a handful of properties, the auction market has a long way to go before it will reach recovery, according to experts.

"Buyers have the choice and if you have that choice most people would prefer to buy private treaty," said Gunne's Jackie Connolly. "I think we are a while away from [a return to a buoyant auction market] because auctions are what you get when you are at your strongest in the market. At the moment it is about injecting some life into the private treaty.

"The general market will have to pull itself up a bit and the auction market will be the last thing to recover."