With the increase in buyer competition in Perth’s property market, some sellers are turning to auctions in a bid to get the maximum value from their home.
Realmark North Coastal Auctioneer and Director Jeanette Bates said she had noticed an uptick in this sale method.
“We have experienced a 30 per cent increase in the number of auctions each year,” she said.
“In addition, there has been a significant increase in the number of bidders per property – an average of seven bidders over the past 57 auctions.
“The most treasured items across the world are placed to auction. This ensures every buyer has time to become part of the sale process and obtain the best result, and it gives the seller an opportunity to receive the best outcome and premium price.”
Ms Bates said buyer competition was primarily due to a shortage of stock.
“In the current market, supply of homes is down by 28 per cent and demand up by 60 per cent on a long-term, five-year average, according to CoreLogic,” she said. “This leads to an incredible shortage of homes for sale.”
A fear among sellers is the risk of underselling their home, with Ms Bates saying that an auction removes the obstacle of pre-conceived ideas of property value to ensure underselling is not an option.
Realmark North Coastal Sales Representative Ian Masterson said with the demand for houses so high, it paid to give competition a bit of time to bubble away.
“It is important to market homes over a period of time so that sellers have the benefit of every buyer in the market having the opportunity to compete and purchase the property and not just those who have the ability to act in the first week of sale,” he said.
“With an auction process over three or four weeks, it allows buyers to organise their finances and take part in the auction process.”
Ms Bates said the marketing time of three or four weeks before an auction was a win-win for both the buyers and the sellers, allowing both parties to assess the level of competition and make an informed decision on value.
“It gives buyers plenty of time to get prepared and assess the property,” she said. “The seller also wins by having multiple buyers competing for their home without the added challenge of having conditions on the sale.
“Over the past number of auctions, we have seen an average of $82,500 achieved over the reserve price – the price that the owners were happy to sell their property for.”
Mr Masterson said auctions appealed to a broad segment of the property market.
“We have found that every price range in the market has performed well, attracting buyers and sellers ranging from first homebuyers to established top-end markets and right through to retirees,” he said.