The auction market has opened strongly in 2023. Homebuyers across Australia should prepare for increased competition as the number of active bidders at each auction continues to rise. The majority of auctions now record more than five active bidders, similar to the boom-time conditions of 2021.
There is some uncertainty about whether this trend will continue in the coming months. The answer will depend largely on whether the RBA raises the cash rate further and the impact of its previous rate hikes.
Australian Property Market: High Demand, Low Supply
There are several trends that are probably contributing to the auction market’s current strength.
Some possible factors are:
- Limited supply: The amount of housing stock is low, which has increased demand and auction prices. The COVID-19 pandemic has created a shortage of building materials and delayed new construction projects.
- Population growth: The easing of travel restrictions has allowed more immigrants to enter Australia, leading to an increase in population growth and demand for housing.
- Foreign investment: Buyers overseas have shown a strong interest in the Australian property market, particularly in major cities like Sydney and Melbourne, further driving up demand and prices.
Auction Activity And Clearance Rates
The real-estate market’s current surge was particularly evident during the post-Easter weekend auctions, where we saw an increase in the number of auctions and a higher rate of success (clearance rate) than usual.
|CITY||TOTAL AUCTIONS||SOLD PRIOR TO AUCTION||SOLD AT AUCTION||SOLD AFTER AUCTION||CLEARANCE RATE||CLEARED AUCTIONS|
Data from CoreLogic.
- The total number of auctions held across the capital cities of Australia during the post-Easter weekend was 1703, indicating a high level of activity in the housing market.
- Sydney and Melbourne had the highest number of auctions, with 680 and 706, respectively. This suggests that these cities continue to be popular destinations for property buyers and investors.
- The clearance rates for most cities were above 50%, indicating that the majority of properties listed for auction were successfully sold. Melbourne, Sydney, Adelaide and
Perth had particularly impressive clearance rates, of 72.4%, 72.0%, 70.4% and 66.7%, respectively.
Off-Market Sales: An Alternative Solution
Otto Dargan, the founder of Home Loan Experts, says a possible solution for buyers looking to enter the market but being outpriced at auctions is to look for off-market sales. This refers to properties that are not publicly listed, but are available for sale through private channels.
Off-market sales can offer better value because there is often less competition from other buyers. This can lead to better pricing and terms, as the seller may be more willing to negotiate. Off-market sales can also give buyers access to properties that may not be available on the open market.
To find off-market sales, buyers can work with real estate agents who have access to exclusive listings or check online listings in private channels or social media networks.
Experience The Joy Of Homeownership
Looking to purchase a property at an auction? Despite the signs of stabilisation and optimism in the market, it’s still unpredictable.
That’s where we come in – our team of experts can help guide you through the process and provide you with the support you need to keep up with the twists and turns of the market and make a good decision.
Call us on 1300 889 743 or fill in our free online assessment form today!