Property auctions have historically garnered the best sales results for sellers, and their popularity is growing further, particularly in some particular areas or dwelling types.
A recent Domain auction report shows that over the past 10 years the proportion of property sales by auction has almost doubled across Australia.
Although this uptake does vary between and within cities and is more prevalent for houses than units.
The data shows that the biggest shift across the capital cities was in Canberra and Adelaide which saw the proportion of property sales by auction jump 5 and 4 times higher respectively, compared to 10 years ago.
In Brisbane, the proportion of sales by auction has tripled during this time, while in Sydney and Melbourne it has almost doubled.
In fact, Canberra’s swelling love of auctions has now made it Australia’s most auction-centric market, recording the highest proportion of sales by auction over 2021, just surpassing Melbourne.
The proportion of sales by auction varies not only by city and property type, but it also fluctuates depending upon market conditions, as competition deepens in an upswing there’s a tendency for more homes to sell by auction and the opposite during a downturn.
Although, this was disrupted during the height of pandemic lockdowns in 2020.
Irrespective of this, sales by auction are tracking higher over time.
The proportion of homes sold by sale method, 2021
7 reasons why are auction sales rising
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- Auctions give more transparency to both buyers and sellers, meaning competition is clear and the market price is fully disclosed.
- Putting a property under the hammer is an efficiently fast method of sale, supported by an intense marketing strategy that typically lasts 3-4 weeks.
- The seller's nerves are protected by a reserve price.
- It gives an unconditional sale, once the hammer falls the property is legally sold.
- If the property passes in, it provides an easy opportunity for negotiation with interested parties.
- There can often be a pre-auction sale, the change of which can increase during an upswing and downturn for differing reasons.
- For buyers, auction negotiations are open for everyone to see.
The best day of the week to auction a property
The data shows, unsurprisingly, that all cities had a higher clearance rate on a Saturday.
Monday produced the poorest result across Sydney, Melbourne, Adelaide and Canberra, with Tuesday being the weakest performance, by far, in Brisbane.
Overall, Monday provides the weakest clearance rate for vendors, with less than 40% of properties being successful at auction.
The higher the price, the more chance of an auction
The transaction method, the day an auction is held and the rate of selling success are not the only things to consider when selling or buying a property.
Higher-priced homes generally tend to sell at auction compared to private treaties.
Over 2021, Sydney had a price differential of 63% for houses and 41% for units when comparing the median sold price at auction to the private treaty.
This holds up across every capital city, with all having a higher median price at auction compared to the private treaties.
Even in Australia's less auction-centric markets, higher median prices are consistently achieved at auction compared to those sold by private treaties.