Interest rates decreases give property auctions a further shot in the arm

Posted On Monday, 22 September 2003 02:00 Published by eProp Commercial Property News
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The drop in interest rates will bolster the auction industry, says Auction Alliance chief executive Rael Levitt.

Property-Housing-Residential

"Several years ago when auctions were dependent on liquidations and foreclosures, the lowering of interest rates was met by an accumulative auctioneers' shudder," said Levitt.

"But the auction industry has changed dramatically from the 1990s, when forced or compulsory auctions accounted for 85% of sales.

The auction industry in SA has been following Australian trends where it has become a first choice method of sale and thus a buoyant property and capital asset market fuels auction values," he said.

"Today only 25% of auctions are of a forced nature and with the continual decrease of interest rates this decline will rapidly continue.

"Our branches across the country and in Namibia are already reflecting the increased optimism and business confidence that the lowering of the interest rates has brought," said Levitt.

"The very moment the Reserve Bank dropped the repo rate, we found that bidders were paying higher prices at our auctions.

"It is amazing how quickly buyers respond to the macro-economic environment," said Levitt, whose company conducts up to four auctions a day throughout South Africa.

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