How buyers can use auction results to be better buyers

Key facts

  • Attendence at auctions important for buyer research
  • Clearance Rates – in 2014 these fell to 68.4%
  • Auctions increased to take advantage of rising market

In many respects the Melbourne auction market last year was better than in 2013. Auction volumes rose 19.7 per cent compared to last year, however the clearance rate fell a small degree from 69.2 per cent to 68.4 per cent.

While there is a great degree of interest in data associated with the auction market, what exactly should buyers be looking at to help inform their judgement?

Firstly, when undertaking market analysis it is important to get as much information as possible and understand the data in context, after all the sale of a new home means something different to the sale of an established one.

Auctions can provide a rich source of information, even if you are not bidding.

Auctions account for around one in five sales in capital cities and nearly one third in Melbourne.

With that in mind there are three important things for buyers to look at from auctions;

Number of Buyers:
The number of active buyers is a slice of the people you are competing against in a given area. If you go to enough open houses and auctions you will get a feel about how strong demand is in an area and that will affect the price you need to pay..

Sale Price (or passed in amount):
Buyers will be able to compare the sale prices with their expectations of price, even if it is passed in. This information will help you make informed judgments about the market when bidding on the home you want. You can then see this data the day after, however it’s far better to turn up and see it live.

Local Auction Conduct:
Auctions can be a high-pressure event, as a result the more you attend the more used to the process you will get which in turn will help you stick to your budget and strategy. Attending auctions in the area you aim to buy in will allow you to become acquainted with the styles of different auctioneers and the level of competition in the area.

Robert Larocca
CoreLogic RP Data Victoria Housing Market Specialist

About Robert Larocca

Robert Larocca has built a profile over the past eight years as an expert on the Victorian residential property market. He worked for the REIV both directly and as a consultant over 8 years acting as a spokesperson, managing its research department and public policy. He has been a media and government relations consultant and spent a decade working across the three levels of government including as a Councillor and Mayor in the City of Moreland. He has well developed leadership skills in the not for profit sector and has been the Chairperson of CERES Community Environment Park for 9 years.

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