More property owners are shifting away from auctions to private sales in order to get a better deal, experts say, as the number of listings continues to lag behind last year’s numbers.
The property market recorded another tepid weekend, with clearance rates consistent with the past several weeks, although they remain lower than last year. The number of listings are also lower, indicating the bottom of the market has not yet been reached.
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“There was a bit of a concern we noted at this time last year when we saw prices falling,” SQM managing director Louis Christopher told SmartCompany this morning.
“We’ve got the same clearance rate here, which implies prices may have not yet stopped falling.”
According to the Real Estate Institute of Victoria, Melbourne recorded a clearance rate of 60%, compared with 58% last weekend and 65% at this time last year. There were 645 reported auctions, down from the 918 listed last year.
In Sydney, the city recorded a 58.1% clearance rate, with 448 listings, down from the 518 last year, while Adelaide and Brisbane recorded rates of 42% and 38% respectively.
Christopher says more of these auctions are in private sales, as buyers believe they can get a better outcome.
“When we look at total stock levels, there is some evidence that stock for sale was peaking and that may be the case. But they rose by a significant amount in Sydney, and to a lesser extent in Melbourne.”
“There are just as many private sales as there are auctions, and in my opinion sellers are moving their properties over.”
Christopher says the perception of operating in a soft market will always move auctions towards private sales. “They think they’re more likely to get a better outcome,” he says.
And while Christopher says more auction listings may be a sign of a recovery, he suggests that’s some way off.
“That’s something you see when the market is generally in a recovery stage, and I wouldn’t expect that to happen any time soon.”
However, there is some indication listings are increasing. In Melbourne, 800 properties are set to go to market next week, and then 1,000 in two weeks’ time.