Auctions heat up residential property market
Buying a property at auction is becoming a more popular form of house purchasing, as recent information from RP Data suggests.
Researcher and blogger Cameron Kusher posted an article on the RP Data website after studying recent auction trends, where he found that the numbers of residential properties going under the hammer is significantly up on the same period last year.
On a week-to-week basis, 1,445 auctions have been held for properties around Australia. Compare this figure to 2012 when the weekly average was just 1,334 auctions and in 2011 when there were 1,384 auctions per week and the recent surge is apparent.
While the number of auctions has risen recently, Mr Kusher also found that the likelihood of selling a house by auction has also gone up, with a 60:40 chance currently when it used to be a 50:50 chance.
This news might interest those looking to buy and those looking to sell, as "obviously if auctions are proving to be more successful, vendors will be more inclined to sell their homes by this method", explained Mr Kusher.
Melbourne and Sydney had the most substantial markets for auctions of all the capital cities, as during the first quarter of 2013 Melbourne saw 25.2 per cent of successful sales driven by auction. This number is up from just 15.8 per cent in the March quarter in 2012.
Figures from Sydney show that the proportion of auction-driven successful sales in the city was up to 16.1 per cent from 13.4 per cent in that same quarter in 2012.
A report from the Australian Property Monitors (APM) recently showed that the success rate for auctions in Sydney from the weekend July 13-14 was an impressive 81 per cent, which was followed one week later with a weekend auction success rate of 81.4 per cent.
APM placed the credit for such high numbers partially with investor activity in the market, highlighting the recent data from the Australian Bureau of Statistics which reported an all-time monthly record of $3.9 billion in loans for residential property investment in New South Wales over May.
"With a rising auction clearance rate it is interesting to look at the proportion of successful auction sales across the combined capital cities, compared to sales by private treaty", explained Kusher, "over the first quarter of the year, 14.3 per cent of all sales across the combined capital cities were transacted by auction."