Cut-price auction for one in four assets
More than a quarter of the properties that changed hands at auction last year saw their commercial prices undercut by between 20% and 35%.
Out of the 8,752 auctions completed in 2022 via the electronic platform with the selection of a successful bidder, 2,383 properties were transferred at a price of between a fifth and a third lower than the market rates. Last year was also the first with the option for the automatic reduction of the price of the first offer established by the Code of Civil Procedure and passed by the Parliament at end-2021.
The ability to reduce the commercial price at which a property is auctioned is intended to facilitate auction transfers where the first bid price is considered high based on demand. The necessary condition for a price reduction is two fruitless attempts, and then the procedure provides for the automatic reduction of the first bid price by 20% in the third stage of the auction and a further reduction by an additional 15% if there is still no bidding interest.
The number of scheduled auctions in 2022 – i.e. those posted on the electronic platform – reached the highest point in recent years, reaching 52,595, of which 39,318 ended in a sale. There were 9,001 successful bidders – i.e. with the selection of a top bidder (the final figure, in addition to real estate, also includes some cases of movable assets) – a number that is also the highest since 2018, when electronic auctions were established. The price of the first offer is determined by an independent surveyor and reflects the estimated commercial value of the property, which however does not mean that it is capable of attracting buyer interest.
The possibility of reducing the price of the first offer has already worked on the market and based on data from the website www.landea.gr, specialized in finding properties at auction, in 2022:
• Without a first bid price reduction, 41,711 auctions were posted, 29,333 were completed (70.3% of those posted) and the highest bidder emerged in 6,369 cases (15.3% of those posted).
• With a 20% first bid reduction, 5,993 auctions were posted, 5,530 were completed (92.3% of posted) and 1,011 (16.9% of posted).
• With a 35% first bid reduction, 3,565 auctions were posted, 3,339 completed (93.7% of posted) and 1,372 were outbid (38.5% of posted).
