Conditions for auctions are looking very positive as the business recovery gathers some traction at last. The numbers tell the story – economic growth of around 4%, inflation still under control at under 4% (but not for long as large price increases including petrol and electricity start filtering through), manufacturing output up and better exports than anticipated in spite of the strong Rand.

Moreover car sales are booming ahead (although they slowed somewhat in the first quarter) and consumer indebtedness has dropped slightly (although still too high), while business confidence such as the Producers’ Price Index (PPI) also improved a tad earlier this year, although it has subsequently declined slightly.

Clearly the economy is not out of the woods and world events make us vulnerable to systemic shocks but the outlook is generally positive for auctions.

A few snapshot observations: selective commercial and industrial property is in demand, auction vehicle sales are stronger than ever, residential property auctions are drawing good crowds and the pool of distressed properties held by the banks is gradually being whittled down, commercial vehicles transport equipment and heavy capital equipment sales are still remarkably strong and movables are doing well, suggesting that small businesses and private entrepreneurs are very active.

Market drivers for auctions right now are the need to realise capital that’s tied up in surplus assets and wariness of corporate and private indebtedness. 

Park Village has been mandated to handle what is possibly the largest auction of its kind in South Africa to date in August when assets arising from defunct operations at several of Harmony Gold Mining’s Free State shafts will be offered.

The shafts have basically been mothballed for the past few years.  The Free State operations are among the oldest and deepest of Harmony’s mines. Says PVA’s Dr. Bertie Saunderson: “The assets are of broad based relevance to the entire South African mining community.

More evidence that the small to medium sized industrial property market is improving  is the news that PVA has been mandated to auction four fully serviced ‘general industrial’ zoned properties, ideal for warehousing and/or manufacturing in  Kew, one of Gauteng’s longest established commercial and industrial areas.

The sale, scheduled for Thursday May 26, commencing at 11am, is expected to appeal particularly to small to medium business enterprises (SME’s). The climate for properties of this nature is positive at the moment, due among other factors to the fact that SME’s established in recent years are now in the market for their own premises, having built up a solid client base and strong balance sheets.

Also, new building plan approvals for industrial buildings are down, new Eskom connections are still difficult to obtain and building costs have increased. Coupled with indications that inflationary pressures are a given in the next few years and rental levels are already rising for commercial and industrial property, ownership or investment in such property makes tremendous business sense.

Park Village’s truck auctions continue to offer real value as a sample of recent auction prices versus the used trucks trade shows. The price comparisons drawn from recent PVA auctions, makes interesting reading:

Compared with new prices the savings are even greater.  As a broad guideline, new prices average 30-35% more than auction prices for the same make and model of vehicles, although obviously not for the same year of manufacture.

PVA’s vehicle sales on behalf of ABSA have become a firm favourite among buyers, the most recent of these again drawing large crowds.

The sale took place against the background of auction vehicle demand that has possibly outstripped even the 25% increase in new car sales recorded recently. The argument in favour of auction vehicles has never been stronger. Firstly new cars depreciate the moment they leave the show room floor while used vehicles have already taken the price ‘knock’. Secondly, the old argument that buying an auction vehicle is a bit of a gamble does not stand up to scrutiny and certainly in PVA’s case, we deal in nothing other than genuine bank repossessions, many of which are low mileage models in good condition frequently still with their motor plans intact and with full service histories available.  Thirdly you have enormous choice under one roof at one of our auction venues – it’s no longer a case of ‘schlepping’ from dealer to dealer.

Demand continues strongly among discerning buyers for auction residential properties as the conventional market versus auction market price gap continues.

There is therefore a window of opportunity for buyers that will undoubtedly close as the market in general recovers. Indeed it may well be true that deals of this nature may never be seen again.     

Two sought after security complex homes in Ridgeway,

Johannesburg South and a superb  character home offering ‘bush hideaway’ living yet close to all city amenities in Pretoria’s Eastern suburbs demonstrate this aspect of the current climate. .

Other recent sales involved a family home in popular Pennington, KZN, a quaint resort that includes the pleasant seaside villages of Kelso, Sezela and Bazley Beach and a hacienda styled home in an equestrian estate in prestigious Randjiesfontein, Midrand.

Park Village Auctions’ warehouse movables sales offer great value and recent sales again continue to attract strong turnouts. Variety and quality characterises the inventory which include everything from engineering machinery to restaurant equipment and office furniture and appliances arising from insolvent estates and liquidations. It’s a veritable Aladdin’s Cave of goods with widespread appeal.

Please visit our website to keep up to date with the latest offerings on auction.
Until next time, all the best from the PVA team.
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