Auction markets vary substantially across geographic regions, product types and price points.
With the recent slowdown in auction clearance rates, it’s a good time to dig a bit deeper to see which types of properties generally sell via an auction method of sale. The location of the property, the value of the property and the type of dwelling all play a role in whether a home is likely to be auctioned or not.
For starters, over the past twelve months (to the end of September this year) homes that sold at auction accounted for 19.2% of all dwelling sales; the vast majority of homes sell via private treaty rather than auction. The trend towards more auction sales has been gathering pace since mid-2012, which coincides with the commencement of the current growth phase. As market conditions heat up, more real estate agents and vendors will choose to auction a property due to the increased level of buyer competition which generally improves the chances for a home to sell at auction and obtain the highest possible price. Prior to the current growth phase, only 8.9% of dwellings were sold at auction.
Auction sales as a proportion of all dwelling sales, combined capital city regions
The type of housing also plays a role in whether agents choose to sell a dwelling at auction or not. Over the 12 month period, 20.4% of houses were sold at auction while only 16.5% of units were sold at auction. Houses are more likely to sell at auction than units.