The number of listed Auctions for this time of year doesn’t seem to be overwhelming, however we are definitely getting the feeling there is more to come in the short term.
I read an article this morning in the Financial Review regarding vendors hiking their reserve prices on the day of the auction or just before the auction commences in the hope of getting more money from the auction.
Firstly, competitive bidding after the reserve is met – bringing the property ‘on the market’ – is normally what assists a good agent and a good auctioneer in achieving a higher price at auction.
Secondly, the 4 or 5 weeks prior to the auction is the period in which the vendor should be considering their auction reserve in order to give the agent time to prepare buyers for the auction and work around price.
This is a dangerous strategy and will result in a lot of passed in property, in fact, may be accounting for a lot of passed in property of late.
A local broker I was talking to recently commented on the smaller banks struggling with the increased costs of doing business lately based on the wholesale rates going up, in response to this the big banks have been competing quite aggressively.
There were originally 582 auctions scheduled to go up with 332 reported to have taken place and 234 reportedly sold under the hammer.
The median sale price at Auction was $1,270,000 and the clearance rate was 57%
Thomas Merriman 