Over the past financial year, 25.6% of all properties advertised for sale were taken to auction across Australia’s capital cities, with Melbourne still the clear leader in auctions.
Over the past financial year, 25.6% of all properties advertised for sale were taken to auction across Australia’s capital cities, with Melbourne, Sydney and Canberra showing more than one third of all listings being taken to auction.
There were approximately 380,000 dwellings advertised for sale across Australia’s capital cities over the 2014/15 financial year, of which roughly 84,000 (26%) were advertised as auction sales. The proportion of auction sales has broadly been rising since the 2008/09 financial year when auctions comprised a much lower 16% of all dwellings listed for sale. The rise in the proportion of residential properties taken to auction should come as no surprise, considering how hot housing market conditions are in the auction centric cities of Melbourne and Sydney.
While housing market conditions remain strong, particularly in Sydney and Melbourne, it is likely that auctions will continue to be a popular way of selling a residential property. When market demand is high and buyers are highly competitive, the auction process is likely to provide the best possible price on a property transaction. The opposite is true when housing market conditions are weak, auctions aren’t as popular due to fact that there is less urgency amongst buyers and the competitive bidding environment isn’t likely to be as conducive to finding the best possible price on a home.
Melbourne, Sydney and Canberra have a well established auction culture with this sale method well accepted by vendors and buyers. The other capital cities still list the vast majority of homes for sale via private treaty.
Across the capital cities, Melbourne is still the city where auctions are the most popular method of selling a home. 39% of all Melbourne's residential property listings over the past financial year were taken to auction, with Sydney and Canberra not far behind at 38% and 36% respectively. Interestingly, when we examine the proportion of listings taken to auction across product types, Canberra and Sydney are both showing a larger proportion of auction listings for houses than Melbourne.
The remaining capital cities are all showing auctions to be a far less popular method for selling a home. 16% of Adelaide listings were taken to auction over the past financial year, while 11% were taken to auction in Brisbane and Darwin and less than 5% of listings in Perth and Hobart were auctions. It is generally the more expensive or unique dwellings in these cities that are taken to auction.
With auction clearance rates remaining in the high 70% range across Sydney and Melbourne, as well as values continuing to show a strong rate of appreciation, we can expect the high proportion of auction listings to remain in these cities.
Looking across the suburbs, there were five suburbs, all in Sydney, where more than 95% of all house listings were taken to auction. The Waverley suburb of Queens Park tops the list with 59 out of 60 house listings (98.3%) being taken to auction. Across the unit market two suburbs of Melbourne topped the list for auction listings with Kew East recording 33 out of 34 unit listings (97.1%) as being advertised for auction.
Article by Tim Lawless, CoreLogic RP Data research director.
In compiling this publication, CoreLogic has relied upon information supplied by a number of external sources and CoreLogic does not warrant its accuracy or completeness. To the full extent allowed by law CoreLogic excludes all liability for any loss or damage suffered by any person or body corporate arising from or in connection with the supply or use of any part of the information in this publication. CoreLogic recommends that individuals undertake their own research and seek independent financial advice before making any decisions. © 2014 CoreLogic.