Based on Reported Auction Results*

Auction Buyer Participation Bounces Post Election

A noticeable improvement to the overall auction success rate has occurred since the last Federal Election. General confidence amongst buyers is up and banks appear to be a little more prepared to lend money. It’s not surprising therefore to see these welcome higher numbers. Readers may recall that previously, the success rate was at a lowly 50’s per cent level: a moribond market in comparison to recent years.

The higher success rate figures do not extend to the number of properties going up for auction however. The winter numbers are low – lower than normal for this time of year. Given the so-so auction success rates earlier in the year, more properties were being put to the market as private sales, not auctions, according to a leading inner suburbs agent. This trend will likely change now that buyers are returning to the market.

Some might argue that lower numbers of properties put up for auction are likely to “logically” produce a higher success rate. But contrary to this seemingly obvious outcome, such is not the case in our experience. If a market is travelling well, high volumes will also see high success rates. If markets are travelling poorly, low volumes will not compensate and success will also be low. So what will be the outcome of greater numbers of buyers at auctions and more properties selling? The answer must mean higher prices. Real estate price movements are difficult to track with any precision. This is because every property and the timing and circumstance of its sale is different to every other property. Nonetheless, although the election was only a few months ago, with recent signs emerging, a short term bottom may well have been reached in Melbourne.

Call us to discuss helping you better buy your next property.

Bruce Renowden