Weekend auctions preview

Via Westpac:

Given the intense focus on Australia’s housing markets at the moment and in light of our recent commentary around the best way to interpret auction market results (seehere) we will start putting out short previews each Friday and summary updates the following Monday setting out how results should be viewed.

Key points heading into the March 23-24 weekend –

Last weekend (March 16-17):

  • final ‘unadjusted’ clearance rates: Sydney 54.2%; Melbourne 52.1%
  • slippage between preliminary and final estimates: Sydney -8.9pts; Melbourne -1.6pts
  • ‘withdrawal rates’: Sydney 15.3%; Melbourne 4.5%
  • estimated seasonally adjusted clearance rates: Sydney 52.2%; Melbourne 49.8%
  • estimated ‘withdrawal adjusted’ clearance rates: Sydney 51%; Melbourne 48.1%

This weekend (March 23-24), based on historical averages:

  • assumed slippage between prelimimary and final estimates: Sydney -5.5pts; Melbourne -1.5pts
  • seasonal adjustment: Sydney -2ppts; Melbourne -2.3ppts
  • ‘withdrawal rate’ adjustment, deduct difference between observed withdrawal rate and: Sydney 14%; Melbourne 3%

Also, note that the NSW state election to be held on March 23 is likely to see significantly lower auction market activity this weekend.

All figures are based on preliminary and final auction results provided by CoreLogic.

Comments

    • A bull market climbs a wall of worry and a bear market slides down a slope of hope, and all.

  1. Agents are employing more and more dodgy tactics to try and get higher bids on properties:

    https://www.afr.com/real-estate/sellers-secretly-dropping-prices-to-lure-bidders-20190321-h1cn1l

    As public auction clearance rates continue to fall, boardroom auctions, round robins and ‘best and brightest’ are becoming more popular.

    Boardroom auctions involve competing buyers meeting in a room, typically an agent’s boardroom, and bidding against each other.

    Meeting face-to-face limits the risk of bluffing over the number of other bidders or their intentions. “I like them because they are transparent. Vendors still get the benefit of stimulated action,” says Bakos.

    But it is important to check any terms and conditions. For example, cooling-off periods might not be available. Sellers might also not accept conditional offers that make the bid subject to finance or the buyer selling their existing property.

    Round robins are usually by phone, or by an agent communicating between bidders. The assumption is the winning bidder will sign the sale contract. But the successful bidder is not legally bound until the deal is signed. Buyers are usually relying on the integrity of the agent in being the go-between. “This can create distrust,” says Bakos.

    She says it is important for bidders to remember the selling agents are acting on behalf of the vendor to get them the highest price. A ‘best and brightest’ sales approach involves a secret ballot where buyers are set the same deadline to submit their “best and highest” offer.

    But there’s an inherent lack of transparency in that method, and buyers – who do not like guessing prices in the first place – may end up offering too much.

    • there’s an inherent lack of transparency in that method, and buyers – who do not like guessing prices in the first place – may end up offering too much.

      Sure feature rather than bug.

    • I tend to call BS when agents tell me of other offers. So far though I’ve missed out as a result. I just don’t trust agents to be honest.

    • billygoatMEMBER

      ‘Re Lying on the integrity of the agent’
      There’s the problem.
      Lying, integrity & agent …. make a sentence using these 3 words.

  2. Buyers are relying on the integrity of the agent. And RE agents are renowned for their integrity, eh. FMD.

    It all sounds vile and dishonorable and unpleasant. Buying a house is gut wrenching enough without this nonsense being added in.

    • In a normal market, adding “vile and dishonorable and unpleasant nonsense” to the buy side would dampen demands and lower prices.

      In an Aussie residential real estate market on the other hand….

  3. We’ll know we’ve nearly hit bottom when the only auctions are on the courthouse steps.

    And by the way, volumes and prices matter much more than percentage of successful auctions.

  4. JamesTheBearMEMBER

    sod all that, the house market here is never going to get back to anything like normal until sellers realise there isn’t a huge pool of mugs wanting to pay more to buy their sh*thole. The sooner RE estate agents are told to take a hike by buyers the better – this is my offer, take it or leave it, should be your default position (or maybe the default should be don’t buy now)

    • Definitely looks promising – 2.5 acre property in suburban Brisbane with separate cottage, for not much more than the price of a 3-bedroom unit in Sydney.