It is believed that the auction market is set to open strongly in 2023. Homebuyers in Australia must be prepared for increased demand as the number of active bidders at every auction is rising. Most auctions currently contain more than five active bidders as compared to the boom-time scenario of 2021.
There’s some uncertainty as to the likelihood of this trend continuing in the upcoming months. The answer will largely depend on whether or not the RBA increases the cash rate even more and the effects of its earlier rate increase.
Australian Property Market: High Demand, Low Supply
Many factors may be in the current market strength of auctions.
The possible causes are:
- Limited availability: The housing stock is limited, and this has led to increased demand and prices at auction. The COVID-19 pandemic has caused shortages of building materials as well as delayed construction projects.
- Growth in population: The easing of travel restrictions has enabled more immigrants to come into Australia, which has led to an increase in the number of people and the demand for housing.
- Investment from abroad: International buyers have expressed a keen desire to invest in the Australian market for property, especially in the major cities of Sydney and Melbourne, which are driving up prices and demand.
Auction Activity And Clearance Rates
The recent surge in real estate prices was especially evident in the auctions held after Easter weekend, in which we witnessed an increase in auctions and a higher percentage of successful (clearance rates) than normal.
- The auctions that were held in the capital cities of Australia in the period after Easter weekend was 1703, which suggests an active market in the market for housing.
- Sydney and Melbourne have the highest percentage of auctions, having the highest number of auctions being 680 and 706, respectively. This indicates that these cities will continue to be a popular destination for investors and property buyers.
- The clearance rates of the major cities were higher than 50%, meaning an overwhelming majority of homes offered for auction were successfully sold. Melbourne, Sydney, Adelaide and
Perth has particularly impressive clearance rates of 72.4 percent, 72.0%, 70.4 percent, and 66.7 percent, respectively.
Off-Market Sales: An Alternative Solution
Otto Dargan, the founder of Home Loan Experts, says one option for buyers who are looking to enter the market but are being priced out by auctions is to search to find sale prices that fall outside the market. These are properties that are not listed, but they are available to be purchased via private auctions.
Off-market sales are often more valuable value due to less competition from buyers. This can result in higher prices and better terms since the seller might be more receptive to negotiation. Off-market sales also offer purchasers access to homes that might not be provided on the market.
To locate sales that are not on the market, buyers may work with real estate agents who have an exclusive listing or look up listings online through private channels or on social media platforms.
Experience The Joy Of Homeownership
Want to buy a home via auction? Despite signs of stability and optimism in markets, they are uncertain.
This is where we can help. Our experts will help you through the procedure and provide the assistance you require to keep track of the shifting and turnings of the market and help you make an informed decision.
