Somebody, somewhere has to put up a balanced view to the incessant chatter in the property press that there is no other real alternative to the auction process, and this is the page. The auction process is as old as Methuselah, is very well respected as a significant player in a sale process, but is not the be all to end all in every market. Struggling very much so in the art world mid 2011, with strong similarities to real estate unfortunately.
Much of the spruiking, of course, is by vested interests. We have a huge industry supporting the process, not least from auctioneers themselves, but also the press to assist in countering the pervasive shift to IT marketing as the major media player. The constant press chatter is actually an advertising campaign promoted by the press and the beneficiaries to change opinions.
It doesn`t really matter what the vested interests may say, unless the actual players, that is, buyers and sellers are convinced, it won`t work well. We have certain areas committed such as Melbourne and Sydney, everybody understands the process, the clearance rates are very high to the order of 60-70%, but what about the Sunshine Coast? And what are clearance rates anyway, and how do we know auctions clear quicker on balance?
Let us examine actual Sunshine Coast auction property results versus private treaty sale. A good starter is reporting by domain.com.au as to auction clearance. rates.
The above report from domain.com.au re sales and auction clearances over the 12 months to September 2011 shows house auction clearances for the Sunshine Coast at 19.4%, Coolum Beach 13.3%. This analysis by APM includes prior auction sales and sales under the hammer.
The main value is after auction when bids suggest a market value to then list at a price. This all assumes real buyer bids are in fact made, not opportunistic bargain hunter offerings or passed in on a vendor bid. The alternative, listing at a price, when well run by an agent with extensive local knowledge, working with realistic vendors, will set this market price early, achieve feedback & similar time on market results.
The key ingredient to the Private Treaty process is a realistic vendor and an experienced agent. You have this combination, you have a successful result, you do not need people wandering through your place from preliminary expensive advertiisng giving views on what they would pay to buy to establish feedback, but this is the auction mantra!
These numbers clearly show that the Sunshine Coast has not accepted auctions as the premier method of selling, despite the chattering classes trying their very best. The above only refers to percentages - historically the Sunshine Coast has between 40 to 50 auctions each week (check the Sunshine Coast Daily for reports) so a clearance rate of 25% for houses and apartments equals say 12 properties per week at tops, say 600 odd for a year - RP DATA reports over 7,000 single dwellings (Houses) and Building Units were sold during calendar year 2010 in the Sunshine Coast North, South and Central Regions - less than 10% sold by auction according to these numbers.
A recent survey by the Sunday Mail showed distrust of the process throughout Queensland, with 79% of respondents saying they would prefer to sell by Private Treaty and 83% of buyers preferring to steer clear of auctions.Newsroom
However, it is whatever feels best for the participants - the message is, as always, do your homework on whom you are talking to and ask to be convinced.
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