Residential Property Auctions: What do they tell us?

Eoin O'Brien
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Eoin O'Brien: Central Bank of Ireland

No 10/EL/12, Economic Letters from Central Bank of Ireland

Abstract: This letter analyses results from residential property auctions conducted over the last eighteen months. At present, where there is considerable uncertainty surrounding the property market and transaction activity has declined, auctions can provide some transparency to the market. The limitation of the auction data, however, is the small sample size which means caution should be used in generalising widely from the results. The analysis indicates that properties sold at auction do so at a discount to the current market asking price and, on average, at a level over 65 per cent below peak prices. Additionally, rental yields achieved on the properties sold are above current market yields and at levels similar to those seen in the mid-1990s. The analysis also suggests that conditions differ across segments of the market as Dublin properties on average sold for smaller discounts relative to peak and current asking prices than properties outside of Dublin.

Date: 2012-10
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