Melbourne Market: Significant shift in use of auctions in 2013- Robert Larocca

There was a remarkable shift in 2013 towards the use of auctions. Based on all sales until the end of November approximately 30.6 per cent of sales were by auction compared to 21 per cent in 2012.

This is an interesting fact for vendors to consider as they face the choice of by what method of sale to sell their home.

This is a choice best made in consultation with the real estate agent contracted to sell the home and there is some broader data that helps explain the market trends that can influence the decision.

As anyone who has attended an auction will tell you they deliver the best outcome when there is competition between buyers.

For that reason auctions work best when there is a unique quality of the property that can drive competition or there is a rising market.

This can been seen in two sets of data.[sam id=36 codes=’true’]

Firstly is the overall clearance rate.

The clearance rate tends to rise when prices do. For instance in 2013 the house price index for Melbourne rose by 8.5 per cent and the clearance rate was 69 per cent. In 2012 the index fell by 2.9 per cent per cent with a clearance rate of 55.8 per cent.

The second set of data is the proportion of sales by auction.

Over the years auctions are used to sell between 20 and 30 per cent of homes in Melbourne with the balance sold by private sale. The use of auctions is far more prevalent the closer the suburb is to the CBD.

It is important to note that even if you don’t sell at auction the chances are that due to the investment in the marketing you have made should will find a buyer soon after.

RP Data tracks the outcome of homes passed in at auction and has found that over the months of September and October last year an additional 11 to 19 per cent sold. For example, for homes auctioned in the week ending 13 October the clearance rate was 70.2 per cent.

Once the sale outcomes over the next 30 days were taken into account for those passed in it rose 11.9 points to 82.1 per cent.



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Robert Larocca


Robert Larocca is RP Data's Victoria Housing Market Specialist. He has built a profile over the past eight years as an expert on the Victorian residential property market. Visit

'Melbourne Market: Significant shift in use of auctions in 2013- Robert Larocca' have 1 comment


    February 20, 2014 Geoff Grover

    I find these numbers extraordinarily low given the hype in the national press re auctions dominating Melbourne and Sydney. It leaves those outside the state to believe the numbers are by far the majority for an auction process.
    I understand in Qld it is about 5%, but again from looking at the big spenders in the major press, it looks like the majority. We really need more balanced reporting on this for the benefit of outer suburban capital city and regional areas where the numbers are way down.
    The reason for this comment is thta in many cases misleading the selling communit yin this way is doing them a disservice, as the areas wher eit is not possible restricts genuine auction buyers to the savvy and cashed up, a very skewed buyer demographic, and does not give an accurate buyer price feedback during the leadup process. In other words, agents use it to “crunch” vendors to get a quick result.


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