Is the Magic of Public Auctions Losing it’s Spell?

Is the Magic of Public Auctions Losing it’s Spell?

Brisbane’s real estate market has long been defined by the excitement and competition of public auctions. However, recent trends indicate a significant shift in buyer behaviour. Auction clearance rates have been falling in market that is short on stock and plentiful with buyers. Prompting a critical question for those home sellers thinking of selling “Is a Public Auction the best way to sell in this buoyant market?” 

In May and June 2024, Brisbane’s auction clearance rates averaged just 44%, a sharp decline from the 57% average during the same period in 2023. This 13% drop suggests one thing, that fewer properties are successfully selling under the hammer. Making public auctions less attractive to buyers and therefore making it a less attractive option for sellers.  
Auction clearance rates are often used by media outlets and commentators as a yard stick into the health of the Real Estate market. This measure is misleading!  

For example. Clark Real Estate is an independent Real estate office which services the inner norther suburbs of Brisbane. Its calendar year to date list to sell ratio or clearance rate is 84.4%!   

So which clearance rate best represents the health of the market? The answer is neither. What this number represent is the competency and skill of the agency or agencies and the systems the advice their clients on the not only sell but sell for the highest price in the market  

For home sellers, this means they should explore alternative sales strategies. A true competitive negotiation process offers several advantages over public auctions: 

  • Buyer Comfort: Private negotiations provide a less pressured environment, making it more appealing to a broader range of buyers. 
  • Price Maximization: Skilled negotiators can leverage buyer interest to drive up the price, ensuring that sellers achieve the highest possible sale price. Remembering, just because a home is sold above reserve at public auction, doesn’t mean it was at the buyer’s maximum price.  
  • Seller Control: Sellers have more control over individual negotiations with buyers and their terms. This flexibility allows them to maximize the sale price by leveraging different aspects of the property that may appeal to individual buyers. 

The declining auction clearance rates in Brisbane indicate a waning interest among buyers in purchasing homes through auctions. This trend presents an opportunity for home sellers to reassess their sales approach. Instead of relying on the unpredictable nature of auctions, where some agents insist it’s the sole method to achieve top dollar, sellers can benefit from exploring agents (like Clark Real Estate) who offer a private competitive negotiation process. This alternative can offer a more reliable path to securing the highest possible price for their property. For more on the power of a competitive negotiation process, have you read our most recent newsletter article? As buyer preferences evolve, adapting to these shifts will be crucial for maximizing results in the real estate market.