Auctions this week: Buyers are back

According to CoreLogic, the first week of July 2019 saw a combined capital clearance rate above 60 per cent for the fourth consecutive week. With the Federal Election now an almost distant memory, Elite Agent spoke to some of Australia and NZ’s top auctioneers to see if buyers are really back, and what the lead-up to Spring Selling Season is looking like in different markets.

Gavin Croft (NSW, NZ)
BresicWhitney’s in-house auctioneer, Gavin Croft, believes there has been a big shift in the number of buyers and the overarching theme of fear that has occurred in the last six months has somewhat disappeared.

“It is so noticeable in the last two weeks – there’s less fear and more confidence in the bidding,” says Croft.

In April and May, Croft says that most auctions were averaging 1 – 1.5 bidders per auction in Sydney’s inner west and Eastern suburbs but in the last two to three weeks this has climbed to between four and five bidders.

Having conducted more than 400 auctions this year with an average clearance rate of 77 per cent, Croft says that the clearance rate in the last two weeks in his core area has been 80 – 87 per cent.

“The last six or 12 months agents have been saying it’s some of the toughest conditions we’ve seen in Sydney.

“Seventy per cent clearance rates are still particularly strong,” he notes.

Justin Nickerson (QLD, NZ)
Two-time Australasian Auctioneer Of The Year winner Justin Nickerson of Apollo Auctions says Brisbane has been inconsistent – depending on the property either “everyone wants it, or no one wants it.”

And it has been this way for most of the year.

“We’re having a lot of properties that are selling prior to auction because people are snapping them up prior to the day,” says Nickerson.

So while volumes in general are down, auction volumes are also generally down.

“A lot of people hold off selling in an election year. Post election auction numbers have come back a bit, but not to the same extent as what they were.”

Nickerson says that, with less listings about, agents are more inclined to revert to what is safe, and private treaty is usually seen as the safer option.

“There is still a hesitancy for buyers up here.”

Nickerson says the Gold Coast has probably outperformed Brisbane this year in terms of clearance rates.

“The Gold Coast is always stimulated by the tourism sector. Living by the beach there’s always the desirability sector and it will always hold its own,“ says Nickerson.

Over in NZ, where Nickerson regularly auctions, it’s not quite as strong as it was 18 months ago, but still strong compared to Australia.

“We had a couple of commercial auctions over there during the week and had more than 10 registered bidders for both of them. Both sold for prices the sellers were happy with.

“It’s very rare at the moment here for auctions to roll over the top of the natural reserve, but it happened over there twice this week, so that’s a strong market.”

Andy Reid (VIC)
Sold By Director and auctioneer Andy Reid said there were way more shoes at the front doors at his auctions this weekend, and this presents an opportunity for agents to encourage bidders to make a move.

“I honestly don’t feel with the conditions that we’ve got as they are, there are really no excuses for not getting any bids,” says Reid.

“There should be action at every auction right now.”

However, he also says that vendors might be feeling a bit battered with what has gone on in the last few months – but if you’re collaborating well with both sides of the transaction you should have something to negotiate with.

“There is so much data right now to support why vendors really need to not wait until spring,” says Reid.

Stu Benson (NSW)
The go-to auctioneer for the Hills district of Sydney says that auctions were kind of light this past weekend, but that is a reflection of the six weeks prior when market conditions were still a bit uncertain.

“Of the six auctions I had scheduled, three of them were sold prior – and they were very good offers,” says Benson.

“I sold two of the remaining three under the hammer, and the other one was postponed due to lower initial numbers.”

Benson also says that in the seven Saturdays since the election his clearance rate is just a sliver under 80 per cent. But he also noted buyers who are out don’t have a lot to choose from.

“Because of that we are seeing registrations up, bids on the floor up and for the first time in a long time we’re going over reserve.

“We’re not talking hundreds of thousands of dollars – but the market is getting it there organically.

“So it’s really encouraging.”

Benson also agrees that the time is now to get vendors on the market to avoid the influx of similar properties in the traditional spring selling season.

“Some sellers might not be doing themselves a favour by not taking advantage of low stock and high demand,” he reflects.

The other factor for sellers is that they can’t purchase where they would like to due to low stock and Benson says that leads to a bit of ‘chicken and egg’.

“Sellers are saying they want more choice in their purchasing journey right now.

“I think there are some people who’d love to take advantage of the market but are waiting until spring because it satisfies their purchasing needs,” says Benson.

Luke Banitsiotis (VIC)
Woodards Blackburn Real Estate auctioneer and sales agent Luke Banitsiotis is also seeing more confidence in bidders post election.

Banitsiotis is also the REIV Auctioneer of the Year and will be a finalist at the Australasian Auctioneering Championships to be held later in the year.

“The weekend was good. I had two scheduled, one was sold prior.

“I called one on the weekend – an honest four bedroom family home – it didn’t go massively over the reserve price but was a good competitive auction. It felt like there was a renewed confidence with three bidders fighting it out.”

In Victoria there tends to be more of a dual agent/auctioneer role, with Banitsiotis saying that there is less of jumping in the car every hour and ‘scooting off to another auction’, and so has noticed that open for inspection numbers have lifted and that there is confidence back in the market, provided the property is priced correctly.

“If you go to market too high, the market is not engaging at all.

“But if you rewind three months, it is chalk and cheese.”

Alec Brown (ACT)
Alec Brown from Ray White Canberra says that things are still a little quiet in the nation’s capital.

“There’s been a bit of a slowdown in volume ever since the announcement of the election. It was always anticipated and very common for our marketplace to go through that,” says Brown.

Brown notes volumes are still well down from this time last year and the market, while recovering, has been a little slower than expected.

Again several properties scheduled for auction were sold prior, so there is still good demand.

“There was only 50 reported auctions in the ACT over the weekend with a recorded clearance rate of 40 per cent. Notably out of those sales, six were sold prior which makes about 30 per cent of the clearance rate.”

Interestingly, Brown says that there are impacts of the Banking Royal Commission still being felt which increase the period between the initial offer and going unconditional.

“It’s not uncommon for a property to be sitting there for three or four weeks while finances are still being sorted out,” says Brown.

And even for the properties that are passed in, there is still plenty of opportunity to capitalise on the prior campaign to negotiate a deal pretty swiftly after the fact.

“Those agents that are out there – that are structured in their process and disciplined in their follow-ups – end up in a better position overall.”

Because of the slower uptick in expected volumes, Brown says it is looking more like a very busy spring season with properties launching mid to late August, particularly with the recent changes to stamp duty in the ACT for first home buyers.

“Instead of there being a lump sum, the Territory Government has removed stamp duty from the purchase process.

“So it has the potential to really have some good upward pressure in the lower segment of the market which in turn is hopefully going to stimulate the next level up.”

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Samantha McLean

Samantha McLean is the Co-Founder and Managing Editor of Elite Agent and Host of the Elevate Podcast.