When is an auction NOT an auction? When sellers decide they don’t like the final price. Czech developers “sold” 38 flats last month in what was seen as a ground-breaking auction that could help set a new benchmark on residential prices. Except now it turns out (link in CZ) that half of the units might not be changing hands, because the developers decided they wouldn’t accept such low prices. The auction was arranged by local agencies Gavlas and Professionals.
Tomas Duda (Professionals) says some clients could end up getting what they won in the auction, once developers recover from their shock at some of the low prices offered. He insists that under the rules of the auction, developers had the right to opt out, and all the bidders signed papers stating this. In fact, it seems likely that it was precisely this possibility of not accepting the last bid that convinced developers to take the (price) risk of going to auction.
What’s interesting is that the cat does seem to be out of the bag when it comes to residential prices.