According to High St Auction Co's joint managing director Lance Chalwin-Milton, "The market was worth an estimated R6bn/year before the Auction Alliance fall-out early last year which is down to R1.5bn". The Alliance Group provides a diverse range of specialist asset services throughout Southern Africa, the Middle East and beyond.
It seems that the South African auction industry is experiencing the after-effects of the Auction Alliance ghost-bidding scandal as the total value of property sales ended at auctions has decreased by 75% in the last 18 months.
The drop in sales is generally to be assumed as a result of bankers retaining their afflicted residential property stock off auction floors since claims of collusion around auctioneers, banks, liquidators and attorneys arised in the January last year. Chalwin-Milton estimated an excellent recovery this year, since banks are still looking at large volumes of afflicted stock. However that hasn't materialised.
The Deals are generally done on merit rather than historical relationships, and in some cases bankers can’t find a way to auction off affected properties because market values are far not as much as the outstanding mortgage debts. It is assumed that it can take approximately two years to get rid of SA's hangover of distressed properties given the worrying state of consumers' financial position.
