Expert Advice: Understanding the Winter Real Estate Auction Market
Ricky Briggs - Director LJ Hooker Auction Services share his insights
The Heat is on in the Colder Months
Usually, winter is a time when the auction market slows down a bit. It's colder, so less people are interested in spending their weekends out and about at open homes, not to mention that winter is when most houses tend to look their worst as well.
However, with the positive overflow we've seen in the last six months and economic drivers like the low interest rate opening up the market to more and more people, the trend is being bucked. Auction numbers and clearance rates are at improbable highs, especially around Sydney and Melbourne. So what does this world of winter auctions mean for you as a buyer or seller?
We spoke to Ricky Briggs, Director at LJ Hooker Auction Services, about how you can navigate the winter auction market when it's much busier than usual, and he had some real gems on offer.
"While there are auction highs, there is a relative shortage of stock, which means buyers typically have to compete a bit harder," he stated.
With demand outstripping supply, it's definitely a market that works in favour of the sellers. This heightened auction activity is also spreading - where central Sydney has been the centre of the heat for some time, sales are also increasing north and south, from Woollongong to Newcastle. Even the cheaper western suburbs are picking up significantly.
So What Do You Do?
Ricky noted that as many as 40 per cent of auction sales some weeks aren't actually happening at auction - people are buying with offers before the bidding opens. Many people are finding that it takes at least half a year to get the home they want, as the strength of competition means their first four or five preferred homes will be snapped up by others at auction.
Being proactive with the selling agent, letting them know you absolutely want to buy a property and making a respectable offer ahead of the auction could see you avoid the drama and heartache that comes with so many bidding wars!
You might have to pay a premium, but for many the price is worth avoiding the hassle of dealing with so many auctions.
What if you Can't Afford the Premium
Of course, with rising prices, not everyone can afford to make their mark on the property market with a premium pre-auction offer, and they have no choice but to go to the bidding phase. Ricky Briggs has some recommendations for people in this situation as well - be confident.
He noted that a lot of the time, people like to sit on their hands and wait until competing bidders have knocked each other out, before swooping in at the end with a winning bid. However, this is competing on other people's terms, and can often lead to you extending yourself beyond your budget.
By bidding early, boldly and within your means, you may be able to knock out the competition and settle on a price on your own terms. Ricky says that most of the time, the person who starts the auction will be the one who finishes it. Make sure that's you!
This winter is busier than most, but some basic principles still apply - namely, that there's less on the ground than in the traditional months for real estate activity. But don't let this put you off. With the right attitude, clear budgeting, confidence and the right agent by your side, the world of winter auctions could hold some incredible deals for you.