Social Proof

I called three auctions on Saturday. All sold.

One had two bidders, one had four bidders and one had five bidders. 

And yet they all started exactly the same way, after a very energetic yet concise pre-amble…

“Who’d like to kick things off with an opening bid?”

Crickets. 

Why does no one ever want to open the bidding? Why does everyone wait for someone else to make the first move?

It’s a bit like a formal dinner when entrées are served and everyone is darting their eyes around waiting for someone else to pick up their cutlery and take the first bite.

Whether you call it politeness, caution, fear, not wanting to stand out, or ‘social proof’, it all boils down to this – not wanting to go against the heard. 

Fortunately, buyers tend to get over it if they want the property enough, and more often than not, as soon as you get that first bid, more bids tend to follow. 

The bids were free flowing at 9 Hawksburn Close, South Yarra on Saturday, which quickly sailed past reserve and then continued on and on to sell for $2,300,000 with five bidders. 

Over in Malvern East, our auction at 98 Paxton Street was brought forward a week as several buyers were trying to buy it before auction. Four bidders vied for this fully renovated family home on 650sqm, which eclipsed all price expectations in front of a big crowd. 

Clearance rates were once again 80 percent across Jellis Craig and the REIV. 

As predicted, the media has turned off the doom and gloom tap, and we are awash with positive news stories about the market having bottomed out, prices increasing across the country, record immigration, lack of supply and how the banks are tripping over each other to revise their house price forecasts upwards. Funny that. 

But, to return to the social proof, not all properties are flying off the shelf. 

A period family home in Boroondara is not a modern townhouse in Prahran is not a high rise apartment in the Docklands. 

The market is not strong across the board. It never is. 

There is still not much social proof of buyers competing hard for small, unrenovated single fronted homes or apartments in the inner city, unless they are a bit special or priced very, very attractively. 

Many auctions are still passing in with no bids. 

There are plenty of properties up for private sale in Stonnington that have been languishing on the market for more than 90 days… even some trophy homes in Toorak. 

FOMO has not returned in full force just yet.

Yet the market has improved drastically, on very low volume. 

In this competitive market, an A+ property, appropriately priced, will see multiple bidders and a premium result – like Paxton Street and Hawksburn Close. 

Even a compromised property, appropriately priced, will sell well in this market. 

But given that prices are only just starting to recover now, there is still some great value to be had. 

If you’re a buyer, don’t be put off by a property that has passed in at auction or been sitting on the market for a little while. 

If you’re prepared to go against the heard and make an acceptable offer, you will get a far better deal than if you had to compete with three or four other buyers.