Melbourne auction homes selling 11% over advertised price

Melbourne auction properties are selling for well above their advertised price estimates in the lead-up to the spring auction season.

A Property Observer analysis of 68 auction sales since the end of the July school holidays found more than 90% have sold for above the advertised price guidance bracket.

Those 62 auctions sold, on average, for 11% above the published upper price guidance leading into the auction.

This figure is higher than previous analyses by Property Observer. In April this year, Property Observer noted homes were selling at 9.55% above the upper advertised price bracket.

In October last year it was 8.7%. In September it was 6.5% and in July it was 5%.

Of the recent 68 auctions researched between July 20 to August 3, 25 sold for more than 10% over the upper bracket of the advertised price range leaving many intending buyers with futile costly time, money and emotional commitments in their wake.

The most extreme example was a five bedroom house in Doncaster East at 45 Beverley Street (pictured below) which sold for $1.22 million after being advertised at $800,000 to $880,000 – a discrepancy of almost 40%.

A three bedroom house in Glen Iris at 51 Maitland Street (pictured below) sold for $1.55 million after being advertised for sale at $1.05 and $1.15 million – 35% above the upper bracket.

The next biggest divergence was a two bedroom unit in Surrey Hills at 2/16 Kent Road which sold for $692,000 after being advertised at $500,000 to $550,000 – a 26% discrepancy.

Homes selling for more than $1 million were the most likely to sell above the advertised price range – of the 13 auction sales analysed none fell between the advertised range.

On average, homes in that price bracket went for 13% over.

For the 30 properties under $600,000, 26 sold above the advertised price bracket, selling for an average of 10% over the upper price bracket.

For the 25 properties in the $600,000 to $1 million price bracket, 23 sold above the advertised price range – going for an average of 10.5% above the advertised price.

Of the 68 auction results analysed, none sold for beneath the advertised price bracket.

The properties analysed come from auctions attended and reported on by the Melbourne buyers advocacy group National Property Buyers. They represent properties identified as sound investments or cream of the crop properties.

The price quotes are received as close as possible to the auction date to avoid step quoting practices, the buyers agency notes.

Meanwhile a survey in Sydney found 12% of auctions there are selling above price guides.