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Sales agents have watched clearance rates every weekend and quoted the solid results when pitching the auction method to their sellers.
Clearance rates bumped above 70 per cent in Sydney and Melbourne over the weekend, have been hovering between 50 per cent and 60 per cent Brisbane and Canberra, and routinely above 70 per cent in Adelaide, this year.
But the figures trotted out each weekend by research companies are simply an arbitrary percentage representing that period in time.
Clearance rates are swayed by many things: the quality of properties that went under the hammer; public holidays that adjoin the weekend; and other anomalies hanging over that Saturday can influence whether the gavel comes down or not.
The oft-quoted clearance rate might strike a chord with some sellers, but I believe there are other messages that resonate more strongly with owners who are unsure whether they should put their property under the hammer.
Maximising exposure in an undersupplied market
It’s important to appreciate that healthy clearance rates are a by-product of the bigger story — low levels of listings.
The volume of properties being taken to auction each weekend has been 25 to 30 per cent below what went under the hammer over the same months in 2022.
An intensive, three- to four-week auction campaign will elevate the profile of your sellers’ property in an already undersupplied market.
Buyers who are nervously watching the time tick away on their 90-day finance pre-approvals are looking to act now and the urgency of an auction deadline is spurring them into action.
As the market remains undersupplied, the auction format ensures sellers’ properties will enjoy maximum exposure in the marketplace — the best ingredients for a premium outcome.
Bid prices up, not down
Question: What’s the easiest way to get less than what you want at sale time? Answer: Put a price on it.
Since the second half of 2022, the Reserve Bank and economists have been doing enough to talk down property prices in capital cities and the regions. Why would agents want to join the narrative by nominating a price alongside a listing?
When a property has an advertised price, one of two things invariably happens.
If the nominated price is above market expectations, then the listing will sit untouched, developing a stigma as each month goes by.
If the property is fairly priced, buyers still want to pick up a bargain, especially as prices have softened. Buyers will try to negotiate, bidding down the asking price with the offer of better terms, such as waiving the finance clause. (As everyone knows, finance clauses are removed from auctions — another benefit of the process.)
By going to auction, agents are helping to bid up the value of their clients’ properties, fostering competition and urgency amongst buyers.
David Holmes is an auctioneer and the director of holmes.
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