A brief History of Auction

Auctions have been recorded as far back as 500BC. Once a year, in ancient Babylon, the girls of marital age would be assembled in one area to have their future decided by auction. They were surrounded by the men of the community (the potential buyers) who would then bid for a new wife. They were sold in order from the prettiest down to the not\’€“so-pretty until each girl was sold. The sellers were the girl\‘s fathers and the buyers were the other fathers and wealthy men of the town. Marriages outside the auction system were not tolerated. The people of Babylon believed this to be a fair system as all the women of the community would end up with a husband to care for them in the future.

The Romans were also common users of the auction system. At the height of the Roman Empire, the Romans were conquering all before them and they collected a large amount of \’€œbooty\’€ along the way. This booty was brought back to Rome and sold to the highest bidder.

So successful were these sales that enterprising young auctioneers would travel with the armies and secure the right to sell the booty as soon as it was collected. It was then returned to Rome and sold from there.

The Romans frequently used auctions to settle debt problems. Creditors would take possession of a debtors belongings which would then be put to auction to pay off the debt. If they refused to co-operate, dire consequences for the debtor resulted and the goods were auctioned anyway.

Throughout the years the auction process has been an excellent method of sale to distribute commodities of varying types. For perishable products it was ideal and also where storage was a problem.

Auction was a large part of the slave trade. This is not a highlight of auctions\‘ history but nonetheless it was used extensively by the traders throughout Africa and America.
Auctioneers received a great deal of criticism due to the scurrilous acts of people that were involved with the slave trade and other under handed commodity sales. Auctions are a very fair system but if run badly and used for illegal practices the criticism is well founded and justified.

In the seventeen hundreds one man decided to lift the profile of auctions and was instrumental in the art auction industry. John Christie of Christies Auctions thrilled the nobility with his wonderful orations whilst selling the world\‘s masterpieces. He lifted the profile of auctions as an acceptable practice to the very influential people of the time and Christies auctions are famous around the world to this day.

Auctions in Australia were well suited to our free-spirited heritage and were a regular occurrence back in the very early days of settlement. However, in many cases there was no structure, planning or control. Thomas Mort who emigrated from England as a clerk soon realised there was an opportunity to create an auction business in this new country. He made his start by regularly conducting auctions at the Sydney wharfs of goods that were damaged at sea during transit. Everything came by sea and before containerization, a ship would have varying amounts of damaged goods that was rejected by the receiver but needed to be disposed of none the less.

Australia was becoming increasingly renowned for agriculture and Thomas Mort saw another auction opportunity. He persuaded the pastoralists of New South Wales to consign their wool to auction in Australia rather than ship it to England to be sold over there. The business thrived and is still the basis for wool sales today. Mort\‘s wool auctions, soon led to stock auctions and of course rural real estate sales followed the same path.

The first land in Victoria was sold by auction on June 1, 1837. Originally known as Port Phillip, 100 lots of land were sold in what is now known as the Melbourne CBD. The gross sale was £3,800 and the average sale price of a block was £35. Only one lot reneged (or cooled off) and the commission for the auctioneer, Robert Hoddle, was £57 or 1.50%.
As we turned into the new century there was a changing mood within auctions. Consumers were becoming more and more uncomfortable at the way the vendor bid was being employed. The sentiment grew to such an extent that in 2003 the state governments of NSW and Victoria commenced drafting legislation pertaining to the conduct of real estate auctions in each state. In NSW it is a requirement that all bidders be registered. It is not a requirement in Victoria. In Victoria, the legislation prohibits major disruptions to auctions, bidders attempting to prevent others from bidding. In both states it outlaws the use of false or dummy bids.
This final clause was hailed by many as the end of the real estate auctions. Nothing could have been further from the truth. Real estate auctions are as strong as ever and have have become a regular occurrence in places that it was once claimed that “auctions don’t work in our area”. They found that the auction wasn’t the problem but was how the auctions were being conducted.
Auctions have evolved over time and are very much a mood of the community. The reason they thrive is because they are fair to all parties. That is why auctions have and will continue to flourish as a credible means of transaction for years to come.

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