While private auctions have become popular at the luxury end of the established property market in Melbourne, developers are beginning to use the format for high-end new apartments.
Private auctions have become the 'go to' strategy for selling luxury houses in Melbourne. Being able to give buyers a prior idea of the opening bid, and a more exclusive environment is desirable for many at the top end of town.
The model has been so successful, developers are beginning to use private auctions to sell their best new properties.
Well-known Melbourne developer, Michael Yates, held onto the two penthouses of his Yarra House development, and will sell them at private auction on 8 March. The properties will be complete and furnished, rather than sold off the plan, as the other apartments in the development were.
Jock Langley of Abercromby's Real Estate, sales agent for Yarra House, lays claim to the private auction. Several years ago, a client requested a more private and intimate forum than a public auction, so Langley's team developed the concept of an auction by invitation, now known as a private auction. The rules and conditions are the same as for any public auction.
The process is appealingly transparent. Interested parties are asked before the auction to nominate a reasonable opening bid, and are informed before the auction what the opening bid will be. The vendor knows the number of bidders beforehand.
"It's a very fair method of sale and the outcomes have been positive," said Langley.
Langley also said that private auctions allow the agent to give more time to the process, because they don't' have to rush on to the next auction. "This can improve outcomes," he said.
Langley said the process is very private and exclusive, which appeals to buyers at the top end of the property market.
Langley believes private auctions will achieve successful sales for the two Yarra House penthouses. "We've drawn interest from expats from offshore, we've had some early interest from abroad, and coupled with local interest, we believe we'll have a successful sale," he said.
Langley said the penthouses have some of the best views in Melbourne. "They're very exclusive. It's about attracting the right buyers to these properties."
The Yarra House penthouses occupy the top floor of the 20-storey building. They have spectacular, never-to-be-built-out views of the Royal Botanic Garden, the Yarra River, and the city skyline, and the finest luxury fittings and appliances. The North West Penthouse has a price guide of $3.75 million - $4.5 million. The North East Penthouse is expected to be sold for between $2.75 million - $3.5 million.