"We will likely see more discretionary sellers re-enter the market in 2024, but for the first part of the year, serious buyers and sellers will continue to make up the majority of activity"
- Jamie Cooke - iamproperty
In 2023, the impact of consecutive interest rate rises affecting the cost of living, as well as mortgage rate increases, saw less than average discretionary sellers testing the market. Instead, more serious buyers and sellers not just wanting to but needing to transact made up the majority of movers, with a growing number turning to auction for its speed and security.
2023 was a record-breaking year for auction sales, but what other factors are driving the demand for auction, and is the growth expected to continue into next year as the market begins to show signs of softening?
Secure pricing
Securing a competitive sale price will continue to be a priority for both Estate Agents and sellers as in 2024. During the last half of 2023 in particular, the market has seen a rise in already agreed offers being renegotiated far into the process of Private Treaty sales, with some buyers pushing for a lower price during the final stages of a transaction.
Impacted by a number of factors, from the cost of living to higher mortgage rates restricting borrowing power, this can lead to unexpected fallthroughs if an agreement on price can’t be met.
Auction doesn’t carry this risk, with both the seller and buyer committed to the sale once it is agreed and no renegotiating.
I expect this to continue into next year as the cost of living and mortgage rates remain high. As a result, we’re likely to see more consumers opt for auction as their preferred method of sale due to the security it provides.
A growing solution for fall throughs
During Q3, we noticed a higher than usual percentage of referrals coming through from our Partner Agents of properties which had fallen through via Private Treaty. We understand the difficult position that fall-throughs can put agents and vendors in, and we’re glad that we’re able to help.
I expect to see this continue as we move into 2024, with auction-supporting vendors who may not have initially opted to sell this way but come to rely on it to secure their sale in the face of a fall through and prolonged transaction timeline.
More need for speed
2023 saw the average time to find a buyer increase to 66 days from 45 days in 2022. We will likely see more discretionary sellers re-enter the market in 2024, but for the first part of the year, serious buyers and sellers will continue to make up the majority of activity. Their need to move could see more favour the Modern Method of Auction as their chosen method of sale, for its fast, fixed 56-day completion timescale.
A differentiator for agents
Estate Agents also had a challenging year, with the number of Private Treaty sales approximately 10 percent lower than this time in 2019. They’ve had to be innovative in their approach to winning new instructions and protecting their sales pipelines.
We’re pleased to see that auction has supported agents to offer consumers a choice of method of sale, meeting their evolving needs and circumstances. More agents than ever before are offering our auction solution to their clients, and I expect this to continue as we move into next year.
2023 was a phenomenal year for auction, with each month seeing record-breaking sales. As agents and sellers begin a new year, it’s hopefully reassuring to see that there is still opportunity out there, and that auction can support vendors through any kind of market.
