Perth Real Estate Agents Are Predicting An increase In The Popularity Of Auctions Over Traditional Offer-acceptance Sales In Western Australia, Saying Auctions Could Help Fuel The State’s Dull Property Market.

Auctions are not typical in Perth and only represent about 3% of the market, but agents and auctioneers say that is changing, with a growing number of vendors favouring auctions over private treaty sales.

CoreLogic data shows the number of auctions in Perth is on the rise, with 1964 held last year, compared to 1692 in 2015. So far this year, there have been 404 auctions in Perth.

First National Druitt & Shead Doubleview principal and auctioneer Rob Druitt says auctions have become more popular because it heralds speedier sales in a slow market.

Druitt says auctions enable the vendor to get a quicker understanding of where their property sits on the market, with the intensive marketing campaign usually spanning 30 days.

“The other important phenomenon is that in this market, the ‘no price marketing’ clearly isn’t working… because the market is driven by price. If your price is right then the market will see value and you’ll get offers.

“Price is the driver in this market. Buyers are looking for value.

“In inner-city Melbourne… 80-90 % of properties sell by auction. In Perth, you’re only talking about 2-3 % of total transactions. It’s a smaller number but it is rising and there’s a number of prominent firms around Perth who are embracing it more and realising the benefits for both the buyer and seller,” he says.

 Acton chief executive officer Travis Coleman says the number of auctions in Perth has been on the rise for the past three or four years.“A lot of people are doing it because we’re moving from a market where there are extended days on market and we’re trying to shorten that and bring the price discussion to a head in a shorter time.

“Auctions are not just limited to the upper end of the market. [Acton Coogee agent] David Bombara is doing it down in Spearwood, the mortgage belt areas, with great success and actually selling quite a few properties prior to auction,” Coleman says.

He says auctions are a transparent property sales technique and generally mean quicker turnaround times, rather than having a property sit on the market for four to five months, or in some areas even longer.

Realmark Western Suburbs director Adam Gilbert says the increased take-up of auctions across Perth was due to the competitive market and shortage of supply.

“What the market wants is transparency. In a market where there isn’t a real understanding as to what is a real price, what is a market price and what is an agent price – the market is saying just give me an opportunity to have a go.

“Auctions are very transparent, very honest, aligned with what the market wants and they do bring urgency not only for the buyer but the seller… to make the best decision in a shorter period of time.

“I think agents in WA need to get in tune with the current market. The market is evolving, the landscape is changing, technology is assisting buyers to gain information in a much shorter period of time so I think we give our sellers the option to consider auctions,” Gilbert says.

But CoreLogic head of research Cameron Kusher says with declining values in Perth it is unlikely that auctions will become more popular in the short-term.

“Auction volumes were a little higher last year than they were in 2015 for Perth, however, auction sales still represent a very small proportion of the overall market.

“Although selling by private sale in Perth is tough, a lot of vendors probably feel as if it is not worth the additional expense to sell at auction, particularly when the success rates have typically been well below 50% this year,” Kusher says.


Follow: Subscribe to this post's comments