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A realistic reserve price and an “appropriate marketing campaign” are essential components of a successful auction in a market where clearance rates remain 30 per cent below their 2009 peak, RP Data has said.
A research blog issued by RP Data has highlighted the weak auction clearance results of the past 12 months, with clearance rates across the major capital cities hovering around 50 per cent mark since late 2010.
During the height of the market back in 2009, as many as 80 per cent of auctions were clearing, RP Data said.
The company said the lowest clearance rate recorded during the year so far has been 43 per cent in late April, only just above the worst result recorded during the GFC, when rates fell as low as 42 per cent across the combined capital cities.
RP Data’s blog was issued not long before three of the four houses being auctioned on the reality TV show The Block failed to sell, which one real estate agent suggested to Real Estate Business was the result of unrealistic reserve prices being set.
“Auction volumes have also fallen away during year; over the past four weeks we have recorded 4,607 auctions across Australia’s capitals compared with 5,245 auctions over the same period last year,” RP Data said.
“With the housing market in the doldrums and only half of the auctions being held clearing, it is logical to assume that fewer vendors are selling their home via an auction campaign.
“Based on rough calculations, around 24 per cent of homes being sold in June were taken to auction while during the same period one year prior the figure was up around 30 per cent.
“The key to a successful auction in this depressed market comes back to ensuring an appropriate marketing campaign is in place and the reserve price is set realistically.”
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