INDUSTRY NEWSNationalReal Estate News

Sales by auction have doubled in the last decade

The popularity of auctions continues to grow, with the number of homes sold via the auction sale method doubling in the past decade.

The latest Domain In Focus Auctions Series found Canberra and Adelaide had the largest shift, with the proportion of auction sales five and four times higher respectively, compared to a decade ago. 

Canberra has now overtaken Melbourne as the most auction-centric market, with the highest proportion of sales by auctions in 2021.

In Brisbane, the proportion of sales by auction has tripled, while in Sydney and Melbourne it has almost doubled – a significant increase for well established auction markets.

Last year saw the highest ever volume of homes transacted by auction on record, with every capital city achieving a higher median price at auction compared to private treaty.

Brisbane led the way in 2021 for those going to auction with a price difference of 66 per cent for houses and 42 per cent for units, followed by Sydney with 63 per cent for houses and 41 per cent for units.

The report also found higher priced houses are typically sold at weekend auctions rather than midweek, with the opposite holding true for units.

Midweek auctions appear to becoming more mainstream with the price difference between midweek and weekend auctions decreasing from 32 per cent in 2018-19 to 10 per cent in 2021, while units auctioned on weekends were roughly 9 per cent lower than midweek, down from 24 per cent in 2017-18. 

Around the country, Sydney saw houses selling 11 per cent lower at the weekend compared to midweek in 2021, with all other cities having higher prices on the weekend.

Melbourne is the only city to see a sustained decline in the difference in median auction price for houses at a weekend compared to midweek, this dropped to 3 per cent in 2021 from 43 per cent in 2017.

At 3 per cent, it suggests there is no real difference between the median auction price at a weekend compared to midweek.

Canberra saw the most consistent difference between weekend and midweek median auction prices, seeing no real change in recent years, at 10 per cent in 2021.

Houses in Brisbane saw the price difference narrow, while Adelaide is the only city to have widened year-on-year.

Domain’s Chief of Research & Economics, Dr Nicola Powell said the trend towards homes selling by auction will likely continue.

“We can expect to see a growing number of auction hammers to be falling in the years to come,” Dr Powell said.

“And this trend is not isolated to just one city, we’re seeing it across Australia and spreading from the higher-priced suburbs into the middle and outer suburbs. 

Dr Powell said the auction process has a number of benefits compared to private treaty.

“Buyers and sellers are embracing the transparency and efficiency that auctions can often provide, and the fact that all cities have a higher median price at auction compared to private treaty. 

“As auction volumes continue to rise, the power of understanding the type of property and location of the property you’re buying or selling is key to unlocking better results. 

“For instance, location plays a notable part in when the best day of the week is to sell, with the auction-centric market of Sydney reporting houses to be selling 11 per cent lower on the weekend compared to midweek auctions in 2021.” 

Domain’s Chief Revenue Officer, John Foong said there are benefits to the auction process for both buyers and sellers.

“With sales by auction having almost doubled over the past 10 years, agents have an opportunity to use this popularity to get the strongest results possible for sellers,” Mr Foong said.

“Australians love auctions thanks to the transparency and efficiency they can often offer – now with a virtual option!

“Greater peace of mind for sellers can be achieved by having a reserve price, providing the opportunity for an early sale, and the safety of post-auction negotiations if a property passes in.” 

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.