There's a lot to consider when thinking about selling your home at auction, and it's not just about the reserve price! With the auctioning realm being a capricious beast, it is always a good idea to consider the market before sending your property up to the block.
Are auctions common in your area?
The trend towards greater auction sales has been developing since mid-2012.
Before even thinking about whether it's time to sell, you have to consider whether or not auctions are common in your area. All across Australia and New Zealand, there are different proportions of properties that are sold as a result of auction versus private treaty. According to CoreLogic RP Data, the trend towards greater auction sales has been developing since mid-2012, as vendors choose to auction their property due to increased buyer competition.
In real terms, the CoreLogic research found that Melbourne was overwhelmingly the most popular place to sell at auction. The ratio of houses sold by auction in November reached 32 per cent for houses and 28 per cent for units. In comparison, in the same time period, the remaining capital cities were unlikely to reach even 8 per cent.
So, you may find that auctions are common in your area. If this is the case, you could discover the market is particularly apt for that style of selling. If it is uncommon, you may find that you have disappointing auction results.
Is it in your best interest at the moment?
Auctioning is all about getting the most for your property, so make sure the local conditions are suited to this endeavour.
Property sales exist in cycles. They peak and trough throughout the year. It is important to ensure that you are selling at a high rather than a low; these sometimes exist within mere months of each other.
For example, just before July in 2015, the markets for real estate in Sydney and Melbourne troughed, dropping below CoreLogic's property index level of 900 and 700 respectively. However, a few months later, both these cities swiftly regained and surpassed their previous high value.
According to the Commonwealth Bank, cities such as Sydney and Melbourne exist in extreme seller's markets, providing lots of opportunity for owners to get the most of their asset. However, Brisbane, Hobart and Darwin exist in buyer's markets, meaning sellers would do better to sell another time.
Auctioning is all about getting the most for your property, so make sure the local conditions are suited to this endeavour.
For more information and advice for selling at auction, contact Ray White for expert advice in Australia and New Zealand.
