Agency principals in Adelaide and the NSW Central Coast said auctions are proving popular this spring, a trend the head of a large real estate network would like to see spread across the country.
Raine & Horne Charmhaven, located on the NSW Central Coast, expects to sell 80 per cent of its listings under the hammer this spring, up 15 per cent on the same time last year, director Andrew Sorensen said. He believed it would encourage more buyers to enter the market.
“We are finding that with the uncertainty in the economy, the addition of a sales deadline under the auction process is encouraging Central Coast homebuyers to get off the fence.”
“The growing appeal of auctions is certainly bumping up the number of sales, with many homes selling just before, during or after auction.
Mr Sorensen believes the agency's focus on selling properties via auction has slashed the group’s average time on market considerably.
“Currently, the average time our listings are on the market is just 24 days, and we have a 90 per cent clearance rate within 45 days,” he said.
“Considering the average time on market is up an around 124 days, ours is certainly considerably lower.”
Auctions were also proving popular in Adelaide’s eastern suburbs, according to a report in the Eastern Courier Messenger, with the number of auctions reaching 435 for the year, not far off the 2010 total of 603.
Norwood Professionals principal Nick Ploubidis told the publication that Norwood and surrounding suburbs were in high demand despite the unpredictable market conditions.
“An auction speeds up the sale process to a four-week sale period rather than the average 12 weeks,” Mr Ploubidis told the publication.
“The competition created by the buyers often helps to achieve a higher price for vendors.”
LJ Hooker Kensington agent Mark Bressington told the Eastern Courier Messenger thatthere were a number of benefits to an auction, including “bringing out the buyers in a shorter timeframe”.
“An auction is basically an event in the campaign and it reduces the number of days the property is on the market,” Mr Bressington said, a view supported by Brock Harcourts Magill director John Joyce.
“If you’re motivated to sell, it will give you less days on the market and it brings the marketing campaign to a head,” Mr Joyce said.
These comments were largely echoed by Raine & Horne chief executive Angus Raine.
Speaking to Real Estate Business, Mr Raine said days on market statistics prove that, for the most part, auctions are the best option for vendors.
"We find there are two kinds of offices. You are either an auction office or you not, but we try to tell all our agencies they need to be auction offices," he said.
"There are so many reasons and statistics out there that show why you should be pushing auctions; and it's for the vendor, not the agent. Days on market are 20 to 30 per cent lower at an auction."
Mr Raine believes that too many agents base auction success on clearance rate figures, which do not provide a clear indication of auction capabilities.
"Clearance rates are not a true indicator, and the problem with auctions is we're too focused on clearance rates."
Recent data shows capital city auction clearance rates are hovering near or below the 50 per cent mark.
"Many properties sell beforehand, particularly in this market, and many sell after. So it's not just about what happens on the night or on the Saturday morning."