Last Saturday was ‘Super Saturday’, traditionally the busiest auction day of the year with campaigns bookended between the Grand Final and Melbourne Cup long weekends.
There were over 1900 auctions scheduled across Victoria, although many of them didn’t make it to auction.
The reported clearance rate ranged between 59 percent (REA) and 76% (REIV).
What’s with the huge discrepancy?
Looking further into the REIV numbers a whopping 787 scheduled auctions weren’t reported!
Of those reported, only 492 sold at auction, 324 passed in, 219 sold before auction, 74 were postponed and 44 were withdrawn.
So if you consider what actually transpired on Saturday, and exclude those that sold before or didn’t proceed to auction, the true clearance rate on Saturday was 60 percent.
For those familiar with Mal James’ Market News email – of the 44 auctions that he reported on in Stonnington, Boroondara and Bayside, only three sold under the hammer… That’s just seven percent!
One of those was our sale at 4 Jordan Street, Malvern, which sold in front of a large crowd with two strong bidders.
Team Fetter/Sciola had a clean sweep of five out of five auctions.
Two sold before auction, two passed in and sold directly after, and Jordan Street was the outlier, which sold out on the street.
Many pundits will use the lack of ‘under the hammer’ auctions as a cut and dry reason not to go to auction, and instead recommend a private sale or Expressions of Interest (EOI) campaign.
I disagree.
If you add in the sold before auction results (between 20 and 25 percent of all of Jellis Craig’s scheduled auctions in recent weeks have sold before auction), and the properties that sold in the 24-72 hours post auction, which don’t always get incorporated in the clearance statistics, auctions are still by far the most effective way to sell most properties in a timely fashion.
Even at a clearance rate of 70 percent, which is below what we have been averaging all year at Jellis Craig, this means that seven out of 10 properties are selling within four weeks.
I don’t have the data at hand, but the average days on market for an EOI campaign in Stonnington would be double that. And the number of EOI’s withdrawn from sale would also be double that of auctions.
Granted, Stonnington is not the ‘average’ market, with median prices some three to five times the Melbourne average.
So, we are certainly more geared towards EOI campaigns – which suit the upper end of town – where buyers and vendors often prefer discretion and control over transparency.
But if you have a one-to-three million dollar home, more often that not, with a few exceptions for unique properties or auction-averse vendors, an auction is still the best method, even in a “softer” market.
Today we sold a townhouse in Stonnington via a Zoom auction, which was converted from an EOI after we received three very similar offers upon EOI closing – surprise, surprise – at the bottom end of the range.
Buyers have a habit of offering the minimum required to get a seat at the table via EOI.
To get those three buyers to put their best foot forward we needed the transparency of the auction.
We were fortunate to have three offers from three genuinely interested and motivated buyers.
If we just had the one offer, we may still have been able to piece together a sale today, but the property certainly wouldn’t have sold for the competitive price above reserve that we were able to achieve via auction.
One of the benefits of EOI is that you can pivot to an auction if the ingredients for competition are there.
We will continue to use both sales methods, depending on the property and individual needs of our clients.
But you don’t need to throw the gavel out with the bath water!
Just because not every house is selling under the hammer with multiple bidders does not mean auctions don’t work.
The vast majority of auction properties are still selling at or before auction.
And as much as we love competition and knocking down a house on the street to rounds of applause, the old saying is true… you only need one buyer.
David Sciola 