Only 23 Percent of Properties on Auction Successfully Sold by Auctioneers
By Estate Cloud - - Kenya
Advertisements for property auctions have been on the increase in local newspapers in recent months. However, available data reveals how demanding it is for auctioneers to get things rolling in this business.
In the first two quarters of 2022, only 2 out of every 10 properties up for auction were successfully sold according to a property auction index by Property Data Kenya.
The index states that 80.3% of all failed auctions stalled because bidders were unable to meet the Forced Sale Value/ Reserve Price set by auctioneers.
The index which showcases data from 2015 reveals that during the covid-19 outbreak, auctioneers took a huge cut on prices since only 31.7% of auctions failed due to high reserve prices.
The trend has however reversed to pre-pandemic years when the high reserve price to failure rate hovered around 81%. This may indicate that demand for actioned property is firming up to pre-pandemic levels.
At the peak of the coronavirus pandemic, from Q1 2020 to Q2 2021, 98.3% of all scheduled auctions failed. The index further shows that the failure rate for auctions has been consistently above 75% points with the lowest recorded in Q2 2015 at 75.1%.
A group of auctioneers recently sought legal action against banks for encroaching on their business by taking over the auctioning of properties, highlighting how competitive the business is.