Property auctions are enjoying a resurgence in popularity in 2013, new analysis of capital city sales data suggests.
Not only have the number of properties going to auction increased this year, but clearance rates have also been up on the two previous years, according to RP Data.
In a media release published earlier this month, RP Data researcher Cameron Kusher compared auction sales figures for the first six months of 2013 with those of 2011 and 2012.
What he found was that there has been a clear boost in both property auction activity and success in the year to date.
“We’ve seen a significant improvement in auction clearance rates across the combined capital cities over this year; combined capital city auction clearance rates have been recorded at an average of 63.3 per cent over the year,” said Mr Kusher.
This is a healthy increase on clearance rates of 47.2 per cent and 50.2 per cent in 2011 and 2012.
During those years, capital city home values fell by -3.8 per cent (2011) and -0.4 per cent (2012), yet the first six months of 2013 have seen these too bounce back, with a three per cent improvement.
To round out the good news for property auctions in 2013, there have been more of them this year than in both 2011 and 2012.
Comparing each year on a week-to-week basis, there have been 1,445 auctions a week this year. The average for 2011 was 1,384; for 2012 it was 1,334.
“Overall, this represents a turnaround in fortunes for the housing market over the past six months,” Mr Kusher said.
“Obviously if auctions are proving to be more successful, vendors will be more inclined to sell their homes by this method.”
Thinking of selling at auction?
If you are thinking of selling your house at auction this year, it may be the perfect time to take advantage of the growing popularity of this selling method.
There are many great benefits to selling at auction.
It can give you certainty about selling – you get to set the reserve price, the date of the auction and other terms to your liking.
You also have more than one opportunity to sell. You may attract offers before the auction, could sell to the highest bidder during it, or may be able to negotiate a sale afterwards if your reserve isn’t met.
Perhaps the biggest anxiety-saver is that all bids are unconditional and once the final call is made, your property has been sold.
Thinking of buying at auction?
With more and more homes selling under the auctioneer’s gavel, home buyers out there won’t want to miss out on the action.
If you’ve never bid at an auction before, this can be slightly intimidating.
However, whether you are hunting for your first home, are upgrading or looking to invest, it is a good idea to be open to the possibility of bidding at a property auction.
Preparation is key when it comes to auctions and that starts with your finance.
If you plan to borrow to buy a house, you’ll need to have your loan pre-approved just to be able to make bids, as these are unconditional.
And because when the hammer falls the next step is to sign the contract, you’ll want to be sure that properties you bid on are all that they appear to be.
Learn as much as you can about prospective properties by visiting them, talking to the agent or owner, and having a professional inspection carried out if necessary.
As for the auction itself, it may be helpful to sit in on another auction beforehand just to see how everything works – look to see how the auctioneer runs things and how bidders show their interest.
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