Strong demand is driving up property prices at auctions in Victoria according to the Real Estate Institute of Victoria (REIV).
Figures from REIV show median house prices at auction were up 5% between December 2006 and March 2007 from $505,000 to $530,000. The increase was 14.7% between March 2006 and March 2007 from $462,000 to $505,000.
This compares to far lower increases in private home sales, as prices were up just 1.5% between March 2006 and March 2007 and were down -1.5% between December 2006 and March 2007.
Adrian Jones, president of REIV, said the community understands that demand drives sale prices at auction.
He said: "The recent debate about auctions has ignored the fact that they are a transparent and efficient method to sell property. The eventual selling price is determined by the level of demand for the property and not by factors such as advertising or quote ranges."
In a recent REIV survey of 1000 people, 77% agreed with the statement that the price of a property sold at auction depends on the level of demand for that property on the day. Only 7% disagreed.
Jones added: "The demand is also confirmed by the high clearance rates being achieved each weekend. Since the start of the auction season all but two weekends have achieved above 80% clearance rates."
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