WA auction action going, going, going
While they account for only a small percentage of overall sales in Perth, agents are reporting large increases in auction numbers.
Auctions within the Acton Group increased by 56 per cent between 2012-13 and 2013-14 and are on track to grow more in 2015, according to Acton managing director Travis Coleman.
Abel McGrath principal and auctioneer Barry Litten noted an increase in the company’s auction numbers in the past 12 months, its target of 250 auctions for 2015 up from a record 121 auctions conducted last year.
Mr Litten said while private treaty had always been the most popular method of sale in WA, auctions were definitely enjoying a growth in popularity.
“Auctions have some key advantages over private treaty, most notably less than half the days on market, ” he said.
REIWA statistics have shown that while auctions account for only about one to 2 per cent of sales in Perth, the average number of days on the market achieved through auctions versus private treaty was definitively lower.
The average days on market for homes sold via auction during the December 2014 quarter was 37 compared with 57 through private treaty and 35 compared with 59 in the September quarter, according to the REIWA figures.
Mr Coleman said auctions were a valuable tool.
“In a slower market they succeed in attracting buyer attention and calling them to action, in a fast market they ensure the seller has the best opportunity to achieve the best price from the market, ” he said.
He said the key was in understanding that an auction was not a one-day event but a process.
“It’s an intense marketing campaign designed to attract maximum attention for a property; the auction date encourages buyers to act and the auction itself is transparent so that all buyers can see what others are prepared to offer (bid) and can increase their offer if they wish.”
First National Real Estate Druitt & Shead principal and auctioneer Rob Druitt said auctions could be used to sell any type of property, particularly since the terms of auctions had become more flexible.
“Historically, an auction would be cash, 30-day settlement and a 10 per cent deposit, ” Mr Druitt said.
“Today, we have more flexible terms with a fixed deposit amount (depending on the value of the property, perhaps even as low as $10,000) and longer and more flexible settlement terms.”
Mr Druitt said he expected the use of auctions to continue to grow in WA, particularly if standardised contracts are introduced nationwide.
“If real estate contracts across Australia are harmonised we are likely to see a cooling-off period come into private treaty sales in WA, ” he said. “This would immediately increase the popularity of auctions with sellers as there is no cooling-off period on an auction contract.”
© The West Australian