The big question is will spring auction listings swamp the market and quell the gathering momentum?

The big question is will spring auction listings swamp the market and quell the gathering momentum?
The big question is will spring auction listings swamp the market and quell the gathering momentum?

The Sydney auction clearance rate has certainly been improving in recent weeks.

The calendar interruptions of early 2019, along with the seasonal winter slowdown, has meant volumes have been below average. Saturday's offering were down 25 percent in Sydney and 32 percent in Melbourne.

Given renewed buyer interest, this means there's been often stronger competition that any agent expected for their offerings. Auctioneer Damien Cooley saw four bidders register at his 214 auction last month as against the two bidders at his 346 auctions last June.

The big question remains whether the forthcoming spring selling season will see a sizeable boost in listings, and with the choice will there be a levelling off in the competitive prices being paid especially for houses.

Earlier this month there was a $700,000 over the reserve price achieved when $3.3 million was paid in Surry Hills. There were 14 registered parties.

There had been a $3.05 million sale further along Bourke Street last year, so I was interested whether it was an emotional two horse race in then end to secure the five bedroom corner terrace.

Its selling agent advised there were still four of the eight involved in the bidding with $150,000 to go. There is some comfort for buyers that they aren't the only one who saw the higher value.

While I am a great believer in going that extra little bit, especially if you are weary from having looked for ages, I do think setting a limit before auction is a wise strategy.

Some buyers get just too emotional in the excitement, and then have regret for a decade after while neighbouring prices catchup.

Hopefully you have viewed to a few recent auctions in the lead up as that way buyers can be more comfortable in the high stakes environment. 

Of course research is king by checking the recent sales results so as a buyer you have an up to date estimation of your desired property and type.

It could well be that your research convinces you that the market is on the move, so getting in that Saturday means you seize a limited opportunity at that level of pricing.

I think it wise to check what the property last sold for, plus the cost of recent improvements, to work out the price growth since it last sold.

Also check its recent on-the-market history as it helps to know if it had been previously marketed.

It's also a good idea to find out what you can about the vendor's circumstances.

Just pop the query into conversation with the listing agent or even a savvy rival agent who knows what is happening in your neighbourhood. That knowledge might prompt a pre-auction offer whereby you avoid the auction angst.

I'm of the view that you think about three price points you would be willing to meet. The first is the price you would love to pay! Then a price you would be prepared to pay, and then a stretch price which is the most you are prepared to offer. Of course consider adding $1,000 or $2,000 to that as sometimes an odd number gets you the home.

Earlier this month in Adelaide a couple of buyers were minded to do just that as the nation's cheapest offering came in at $273,102 which saw the final bids get down to $1 bids at the Ray White auction of a Parafield Gardens 1960s, three bedroom home.

There were 18 registered parties, which shows Sydney's not the only place where house buyer numbers are a bonanza for sellers.

This article was first published in the Saturday Daily Telegraph.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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