By Paul Millett - Cooley Auctions
Cooley Auctions Auctioneer Paul Millett discusses clearance rates during the colder months.
Winter is a great time for vendors to sell. Although there are fewer properties on the market, we still saw auction results improve through June and the clearance rate increased to 74 per cent for the Sydney metropolitan area.
We expect to see this trend continue throughout August, as auction clearance rates have remained above 70 per cent for every month in 2014.
When looking at the market statistics for June, what really stands out is the percentage of property sold over reserve. This figure has leaped ahead from 62 per cent in May to 72 per cent in June. An incredible 10 per cent increase from one month to the other is based on less property on the market.
The same amount of purchasers were competing for fewer properties, which has then resulted in the auction clearance rate and percentage of property selling over reserve increasing. By using auction as a method of sale, purchasers are placed in a competitive environment and the best result is achieved on the day.
Prior to the fourth quarter, vendors’ expectations had risen with the strong market. Many vendors have seen the market is not as strong as it was in the third quarter of the financial year and have been more realistic about prices.
The market is still very competitive despite the low stock; vendors have simply noted the market feedback and set reserves appropriately.
Vendors will be looking to beat the spring rush by coming on to the market earlier this year. With this in mind, and interest rates remaining at all-time low figures, we expect the strong auction results to continue right throughout the winter period and into spring.