AS the market returns to normal, many Ray White agents are still turning to auction as their preferred sales method.
Lockdowns and border restrictions may be a thing of the past but an increase in auctions is one of the many things leftover from the COVID-19 pandemic and how it affected the property market.
This year, Ray White’s auction listing share is currently at 35 per cent. That means 35 per cent of the group’s listings have been scheduled for auction while the rest have been sold through a private treaty sale. The number of Ray White auction listings versus private treaty has continued to grow since 2018, where it was just 22 per cent. There was a slight dip in 2020 as the market wobbled with the onset of the pandemic but just seven months into 2022, the group has already scheduled nearly as many auctions as the whole of 2019. Auction results hit their peak in 2021 and Ray White scheduled more than 10,000 extra auctions compared with 2018.
The rise in auction popularity as a sales method likely comes down to the fact that those who sold under the hammer this year on average achieved an extra 11 per cent on their sale price than if they had sold prior (essentially private treaty). This number is higher than the national average when looking at Adelaide where it sits at just under 13 per cent.
Adelaide has not traditionally been seen as an auction market like Sydney or Melbourne but the city’s share of Ray White auction listings has risen dramatically in the last few years. It’s now at over 56 per cent which is impressive considering in 2018 that number was only 21 per cent. Brisbane has also embraced auctions, in 2018 only 16 per cent of Ray White listings were scheduled for auction while in 2022 that number has seen a huge jump to almost 30 per cent.
Ray White national director of special programs Bianca Denham said the auction method worked well for sellers for a few reasons.
“A great auction agent knows they need to build competition and gather as many bidders as possible - this allows magic to happen on auction day,” she said.
“Auction has always been regarded as the truest measure of market value and given the results we're seeing at auction day, 11 per cent above highest offers prior to auction, our sellers are being rewarded.
“Keeping the property in the market for three to four weeks, allows all active buyers to see the property and maximises the competition on auction day.
“We very rarely hear vendors who sell by auction lamenting whether they could have got more, it gives great peace of mind that you have extracted the best money the market will pay.”
Ms Denham added for buyers, while auction day can be a very nerve wracking experience, it also has its benefits.
“We often receive feedback from unsuccessful purchasers during private sales (not auction) that they would have paid more if they'd have known what the highest offer was,” she said.
“Auction provides transparency for bidders and confidence to understand that if they do increase their offer under competitive bidding, they are not overpaying as the evidence of value is supported by the underbidder.”
