Last year Melbourne saw 30.5 per cent of sales by auction compared to 21.1 per cent for the previous year. The proportion of sales by auction tends to follow the market; rising when prices and demand increases and falling in soft markets.
Early indications this year are showing that new records are likely to be set. At the end of the March quarter, 30.6 per cent of sales were by auction compared to 21 per cent last year, and the previous high of 20.8 per cent in 2010.
Due to a lack of auctions in January and a slow start to February, the proportion of sales by auction always rises as the year goes on. The same will be the case this year, especially in light of the records reached in May.
This means we are likely to see a significant shift in selling methods towards auctions this year. This would be unprecedented because price growth and clearance rates are lower than in other years when this occurred.
The data points towards a shift in auctions as a selling method by Melbourne real estate agents, and one that vendors are clearly agreeing with.
This may be due to research which shows that even if you fail to find a buyer at the auction, there is a high likelihood you will within 4 weeks.
The data shows that within 4 weeks of the auction, the proportion of homes sold rises to around 80 per cent as sellers negotiate with buyers after the conclusion of the auction.
This shows that the concentrated marketing and ‘sale date’ associated with an auction campaign helps ensure a timely sale.