Auction rates at Perth have been pushed to a near 15-year high as real estate agents attempt to lower vendor price expectations and sell homes despite its high supply. But unlike Sydney and Melbourne, where home prices and the number of homes being sold at auction are rising, Perth auction rates are still rising despite the fall in housing prices.
"It's absolutely counter-intuitive," said Andrew Wilson, senior economist at Domain Group. "You are allowing the market to set the price. It can be less fruitful because you can end up at square one after paying all the auction expenses."
Still, Perth agents are using auctions as a way to make vendors become more realistic about their sale prices. Auctions represent only three per cent of the Perth market, but things are gradually changing, and there are signs that the worse may be over for Perth's property market.
According to the Real Estate Industry of Western Australia (REIWA), auction rates hit a 15-year high in December at 3.1 per cent and sat at 2.9 per cent in March. Auctioneers attribute this rise in auction sales to television programs like "Hot Property," which are making people think about the possibility of buying from auctions.
"Auctions are becoming more familiar to West Australians, and Perth sellers are increasingly more open to this selling method," said REIWA president Hayden Groves.
However, there are still not enough homes sold under auction to generate a significant clearance rate.
"Most homes sell two weeks after the auction and the seller meets the market," said agent and auctioneer Rob Druitt.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now