Vendors trade auctions for private treaty

According to the latest data from Domain, three in five properties that began as an auction have converted into private treaty sales nationally.

The data marked a significant shift in how vendors approach the market.

Domain chief economist Nicola Powell said the shift pointed to a change in market dynamics, with buyers gaining greater negotiating power.

“Conversion rates are now at their highest level since the 2022–23 housing downturn, indicating that sellers are becoming more responsive to changing market conditions,” Powell said.

Domain analysis found that Sydney was the market most impacted by the shift, with auctions converting to private treaty sales up 126.1 per cent, with 56.3 per cent making the switch in strategy.

In addition to the increase in converted sales, the percentage of home sales that forewent the auction process entirely in favour of private treaty sales rose to 83.1 per cent.

Sydney’s eastern suburbs saw the largest increase in properties that converted sale strategies, with an uplift of more than 300 per cent.

Brisbane saw the largest conversion rate at 67.6 per cent, with more than two-thirds of auctions switching to a private treaty sale

Additionally, the river city saw the largest proportion of listings that started directly as a private treaty sale, at 92.1 per cent.

Powell said the results were consistent across the capitals, marking a broad change in sentiment rather than an isolated change.

“More than half of auction-launched listings across Sydney, Melbourne, Adelaide, Brisbane and Canberra are now converting to private treaty. We’re also seeing a growing number of vendors choose private treaty from the outset,” she said.

She said that with clearance rates holding lower than in previous years, many vendors had seen fewer results coming through auctions.

According to Powell, the emerging trends had seen the auction market shrink from both ends, with fewer sellers entering the system altogether.

“Auctions tend to perform best when there are multiple buyers competing for the same property. As buyers gain more choice and competition eases, creating that auction-day momentum becomes more difficult,” Powell said.

She said that while auction volumes have been in decline, it was important to note that sellers hadn’t completely left the market, but had simply adjusted their strategies.

“Private treaty offers greater flexibility around price and negotiations, making it an attractive alternative when buyer demand is more measured.”

“What we’re seeing is a market recalibrating. Buyers are gaining more negotiating power, and sellers are responding by choosing sales methods that better reflect current conditions.”