Based on Reported Auction Results*

Market Bubbles Away Despite Good Volume For Sale

As measured by auction success rates, a remarkably consistent last three months has been observed in the property market. Very strong, but not “unsustainable”, might best describe it.

The actual rate of success as seen in the above figures, clearly represents general price increases… probably in the order of 10 to 15% per annum.

Areas and types of properties however are seeing different outcomes… For instance, currently houses on land appear to be performing better than apartments, due to the more limited supply of one and the constant new supply of the other. Inner areas generally perform better than outer, though pockets in the “middle” eastern and south eastern suburbs demand is also very strong.

In markets with this level of strength, buyers need to be alert and prepared for the unexpected. “Predictable” results – say selling within 5% of expectations, will be interspersed with results of sales bringing 20% and more over an anticipated price outcome. What also makes picking a likely result even harder, can be vendors’ reserves…

… When a property is announced “on the market” during an auction, this indicates a likely close point to where the vendor has their expectations. It may surprise buyers to hear that some vendors have their reserves set lower than buyers anticipate – perhaps in reality, too low. This can create an impression the eventual sale price was too high, when in fact it was probably consistent with the market at the time. Sad to say for buyers, reserves that are too low are in the minority!

An advocate is better placed to read the market and provide guidance to their buyer client. But as selling agents often themselves experience, with generally good results providing constant variation, it’s a matter of trying to get close to the bullseye, not on it.

Contact Renowden Buyers Advocates for your next purchase.