Drifting in a sea of listings, it’s harder for agents holding onto the four-week campaign life-raft to be rescued come auction day.
CoreLogic data from the four weeks to 28 October showed the volume of listings in Sydney (30,397 listings) was 18.6 per cent higher than the same period in 2017. In Melbourne (36,526) the figure was 19.5 per cent higher. Other cities have not fared as badly, with Adelaide (-4.1 per cent) and Hobart (-4.3 per cent) hosting less stock than this time last year. The spring selling season has also lifted listings in Brisbane and Perth (3.7 per cent and 2.5 per cent higher, respectively) with these markets in need of something to motivate buyers who have become complacent in the low-interest rate environment.
But with so much choice across Australia’s two largest cities, there’s no need for buyer urgency. Subsequently, it requires an inordinate amount of time and tactics for agents to hold on to bidders through a four-week auction campaign, creating serious pressure on productivity. Auctioneers have reported a surge in properties selling the week prior as the prospect of auction-day competition wanes.
To this end, I believe the two- to three-week auction campaign should no longer be considered an experiment for offbeat or challenged listings; it would bring back urgency to an over-supplied market. Time is money in the current marketplace and a punchy, intensive campaign that demands bidder attention will potentially save, and earn, the vendor cash.
Listing a property on a Monday, you could host up to six open-for-inspections – three mid-week and three-weekend viewings – by the time the auction comes around. Any seller would agree that this schedule makes the property accessible to interested groups.
Summer will be here before long, with the warmer months making mid-week viewings more appealing. When summer arrives buyers find it harder to attend weekend OFIs, with Saturdays already crammed with school and club sport, round-the-clock traffic, children’s birthday parties, groceries, an afternoon swim and a host of other commitments.
Having recently conducted a series of auctioneer training sessions in New Zealand, it’s clear how inflexible and headstrong the Australian real estate industry has become around the four-week auction campaign – and for little reason.
In NZ, a two- to three-week campaign is no issue at all. And, if interest after the first two weeks is still red hot, there’s no perceived obstacle to pushing back the auction date, amplifying on-the-day competition. All it involves is a couple of hours of phone calls, adjusting a date in the back end of the CRM and an EDM update to the database.
‘But what about the banks?’ I hear you say. It is true that APRA’s restrictions have resulted in a reduction of investors in the marketplace. And, once Commissioner Kenneth Hayne AC QC hands down his final report into the Royal Commission in February, assessments on owner-occupiers will be more stringent to tighten up serviceability of loans.
But these issues shouldn’t affect those whom you want raising the paddles on auction day – cash unconditional buyers.
And a two- to three-week auction campaign shouldn’t be an opportunity to lessen the marketing spend for vendors. Agents should simply consolidate the four-week spend into the two-three-week window. This would result in a short, highly intensive advertising spree reinforcing the call to action.
Flushing out these unconditional buyers is paramount if sellers are to avoid a lengthy time on over-supplied markets.
So, in the sea of competition, the two- to three-week auction campaign is set to become the flare that signals the attention of the right buyers.