It’s easy to get carried away buying property at auction, you only have to attend a few to realise that an auction quickly becomes more than a purchase, it becomes somewhat of a competition. And that’s exactly how vendors and agents like it.
The more people get caught up in the moment and carried away with their bidding, the higher the prices go.
Recent weeks have seen some extraordinary examples of over bidding at auctions, to the point where even traditionally conservative commentators are concerned that some prices are unsustainable and unjustified. In other words, buyers are over paying for their investment.
Many buyers appear to be willing to over reach at auction because of the current low interest rates. However, it is more than just low rates. They also seem to be bidding higher because of a fear of missing out.
They seem convinced by the frenzy of hype that if they don’t buy now, tomorrow or next week they will miss out. Prices will be even higher next week.
This fear is one of the biggest driving factors behind why agents love auctions! Low interest rates, a competitive auction scene, rising prices and a fear of missing out are a perfect storm for a huge price to be achieved on auction day. Take care out there.
Until next week