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Vendors shy away from auctions

Vendors shy away from auctions

by Reporter 2 comments

Simon Parker

The proportion of homes sold via auction dropped in Sydney and Melbourne in the three months to November when compared to a year earlier, new data has revealed.

According to data from Australian Property Monitors (APM), properties sold under the hammer in Sydney dropped to 12.8 per cent of total sales in the three months ended November. This was based on 62,171 sales.

This was down from 15.7 per cent in the quarter to November 30, 2010, the data showed, although it was up from the 9.68 per cent booked in the August quarter.

In Melbourne, auctions accounted for 12.21 per cent of 60,353 residential property sales in the same period, which was well down on the 19.55 per cent reported in the same quarter of 2010, although it was up on the 10.25 per cent posted in the August 2011 quarter.

The Sydney data was at odds with figures reported by David Scholes, principal at auctionWORKS, which runs an auction room in the Sydney CBD in conjunction with REA Group.

Mr Scholes handles around 1,600 residential and commercial auctions each year.

He told Real Estate Business that his firm handled around 15 per cent more auctions in the November and December period of last year, when compared to 2010.

On one particular December day the firm processed 36 auctions, Mr Scholes said. Most of the auctions handled by auctionWORKS are for properties based in Sydney’s inner and northern suburbs.

While his company’s overall 2011 auction numbers were down by around nine per cent on 2010 figures, he said smart sellers continued to see the benefit of auctions when times were tough.

By going to auction, vendors were showing prospective buyers that “were serious sellers,” he said, and days on market figures continued to be shorter when compared to properties sold by private treaty.

Some sellers though were put off by reports of low clearance rates – which hovered just above the 50 per cent mark in Sydney last year, he added.

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Vendors shy away from auctions
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